How Not to Think Strategically...Pt 1830032
So there's this kind of massive myth floating around the mediaverse today:
"I don't mind Beacon, because it lets Facebook make a buck, and stay in business".
Unfortunately, this isn't economically valid.
Facebook doesn't need
to make a buck - not really. To provide connected consumers with, well, Facebook - as it is today - doesn't require a lot of cash. Maybe a few million a year.
See the point yet?
Let me spell it out.
There's a set of dynamics at work that limit the returns to evil. If the costs of entry are so low, consumers will always have alternatives to evil players; players who are essentially competing by not
So the logic of the argument is backwards. It should be the other way around: "I don't mind Beacon, as long as it creates value for me, because it's letting Facebook make a few bucks. Otherwise, I'll defect to another network".
And that goes for both advertisers and consumers.
Hence indeed Craig, whose main competitive advantage seems to be a perfectly genuine indifference to the billions of dollars he could make from his site - I love his claim that "the only think I lack in my life is a humming bird feeder that actually attracts birds".
// Seamus McCauley // 4:02 PM
I would say probably closer to $10mm per year to maintain the codebase, pay for the sever costs, and do customer service. Point taken, though.
Umair, I read somewhere they had 300 staff, going up to 700 next year. Thats quite a cash burn. Also, if you take the transport costs of 50 million people times a claimed average of 1,000 page views per month that also adds up.