The other day, I barged (late of course) into a lunch conversation with two friends ( I am sure in hindsight they wished I did not) and they were clearly engaged in a two person conversation. Needless to say after I arrived, I made it a three person conversation, and we began talking about this, that and the other, no real direction or purpose to the conversation, just chatting about various things.

Somewhere during the conversation, we started discussing more serious matters and that morphed into a philosophical / biblical conversation. I must admit up front, my knowledge of the Bible is limited at best, I have done some light reading of it from time to time and have read books that discuss it, but I am by no means a scholar. Fortunately (or perhaps unfortunately for him) one of the other two in the conversation was much more versed in the Bible and it’s teachings. Partly out of my curiosity, my need to understand, I put forth some very tough questions on why things were the way they were according to the Bible and I took some stances that did not jive with all of it. The conversation lasted a lot longer than I am sure that any of us wanted, and at the end we (at least two of us) were mentally exhausted, but I got some answers I was looking for, and am still waiting for others.

It is amazing how conversations (intellectual ones at least, well I guess they do not have to be that intellectual, considering that this one did not start out that way) resolve to either a discussion on religion or politics (are those two even that much different, after all one seems to lead into the other eventually). I always thought that the rule was that when in mixed company, the two subject matters that you are supposed to avoid at all costs were religion and politics. Luckily for me, I was not in mixed company, I was amongst friends. Nonetheless, it amazes me at how conversations can meander along and then without any warning, progress to a new level and get deep and philosophical, even when that was not the original intent of the conversation.

Whether the conversation is about religion, politics or anything else for that matter, it is good to sometimes step outside of your box, ask those questions that you have wanted to ask but have been afraid to, take a stance on a topic that you feel strongly about, challenge yourself and those around you and grow from it. I did and I feel enlightened and better that I have gained more knowledge, after all, knowledge is power.

Thanks guys for bearing with me as we drained our brains!

Or better yet, is relying on online advertising as your sole revenue model a sustainable, scalable business model? In this day and age, there are certain types of commodities (let’s call them that for a lack of a better term) that are expected to be free. Social Networks, for example are expected to be free and make sense to be free, after all, who wants to pay to hang out online with their friends, right? So if this, and a lot of other commodities (how about services, that sounds better) on the web are free, then in order for the company behind them to make any money (I am sure the founders of said companies did not start them out of the kindness of their hearts, because if they did, they would be non profit orgs and not have INC. or LLC after their names), they need to rely on online advertising as their revenue source. Problem is, so does every other free service on the web. Seems like a lot of competition for a finite sized pie (the pie that is eyeballs that translates into PVs which translates in to actual dollars that advertisers are willing to pay to the companies to run their ads).

SAI had a good article on how “free” is killing us, and they raise a good point that VCs are pouring money into start ups at an alarming pace that have nothing more to their business model than we are going to make money off of online advertising. Sounds great, but even at a decent CPM, you are going to need A LOT OF PVs to even make a dent in your projections (which after all is what you sold to the VCs so they would fund you in the first place). So why are the VCs pouring their money into these types of businesses with this model? I guess they are not too concerned on how the company will make money because if they build a large enough audience, some other, larger, company will see this as an opportunity to make money off of and they will figure it out once you have sold out to them (VCs are happy, they just sold a company, made money and now it is someone else’s headache to figure out how to truly monetize the thing).  Problem is , that if one of the major players (aka big boys, which there are a few of) have already purchased a company like yours, your odds are getting smaller by the minute that you will be purchased.

Now obviously I am painting with a very broad brush when I say what I am saying, there are lots of companies that have other revenue models that are getting funding, it just seems like for everyone of those, there are 10 that are relying just on advertising to get by. To play the other side, television and radio have been around a long time and have proven that the product can be given away for free and the money can be made off the advertisers, but the biggest difference that stands out to me right of the bat is that at least with TV, there are a lot less companies vying for the eyeballs that translate into dollars than there are on the internet. Last I checked, there are 4 major free channels that are in competition with each other, I do not think that someone like Facebook can say that they only have 3 other competitors (even though they are the big fish, they still have to compete with the countless other social networks on the web, not to mention other sites in general that are stealing eyeballs away from them), so the game is much harder, but that is not to say that it cannot be won. It just cannot be won by everyone, many will have to fail for the few to succeed, it seems to be a simple matter of the law of economics and scale.

As always, these are just my 2 cents, I am sure I could be proven wrong, and I hope that I am, time will tell.