Re: "Bill makes all the important decisions here."

CobraBoy (
Sun, 18 Jan 1998 17:56:30 -0800

At 5:42 PM -0800 1/18/98, Mike Masnick wrote:

> Since this doesn't appear to have been FoRK'd, I'll take the liberty of
> doing so, with my comments.
> >The one, actually two exceptions are Porn and a economic model based on
> >Television. Television is a lot like the Internet. It's always on, it's
> >free for the most part, and you can waste many many hours and become pretty
> >addicted to it.
> This still doesn't go against what I said. In the case of both Television
> and the Internet, they are non-excludable and non-depletable, and the
> marginal cost to provide for an additional viewer is zero.

Why do you think I'm going against what you said? I'm not.

> >However the majority of businesses aren't in the business of broadcasting
> >and they don't think that way. Of course Television is a advertising based
> >model as you propose the Internet be. The problem comes down to who gets
> >the advertising $. Internet fee's are never going to equal Seinfield ($200
> >million profit per year) but they will get better. The key is going to be
> >to have a site that fits into a certain category and then advertising is
> >bought on that site per category. As an example health, consumer items,
> >news, etc.
> >
> >Also the example of the WSJ is a good one. Certain specialized sites will
> >make money.
> >
> >Do I really have to explain why porn sites make money to anyone here?
> >
> >Thought not....
> I think we basically agree here. The only thing is, that I see exactly how
> all this fits in with the simple economic model I described, and you,
> apparently, don't.

No I do. I'm backing up your argument.

> >From my perspective, this model is extremely helpful to get a basic
> understanding of what works and what doesn't on the internet. What it does
> is let you look at what the economic conditions are, and then to make
> decisions based on that. As far as I can tell, it works very well. It
> doesn't necessarily tell certain sites not to charge, it just suggests,
> that if they have competition that can serve up the same info, with the
> same MC=0, sooner or later, the cost will go to zero, and the ones that are
> expecting to survive by charging will get screwed.

Again I agree. And sites that start off by charging shouldn't even boot up
their servers.