
Andrew Chen: Forget advertising - will virtual goods be the killer revenue model for Web 2.0? - andrew_null
http://andrewchen.typepad.com/andrew_chens_blog/2007/05/forget_advertis.html
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Goladus
Personally I think virtual gifts is a dangerous business model. In some
scenarios it can work, but you need a really good reasons to create artificial
scarcity or else you'll piss people off and be very vunerable to competition.

Raise your hand if paying $2 to download a 200k ringtone makes you happy. How
fast would that business model disappear if people were able to upload
whatever they wanted from their PC or iPod?

Making money from virtual property is a great idea, but it can definitely "go
against the flow" just like ads. You have to be really careful to only charge
for things that people will buy because they want to pay for them.

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rms
Anyone have any idea how successful facebook is with gifts?

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BrandonM
I personally know no one who has bought one of these gifts. I can certainly
envision people doing so, but not really on a large enough scale to be highly
successful with it. Of course, this is all based on personal experience and
supposition :).

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rms
No one admits to buying gifts, but I have a lot of friends with multiple gifts
in their profiles. They didn't all come from the initial free one.

