Advertising Platforms As A REAL Business Model?

So I read in the Wall Street Journal yesterday that 3 major technology companies get over 80% of their revenue from advertising:

These companies and their percentage of advertising revenue are:

Facebook - 98.3%
Twitter -- 86.4%
Alphabet (Google) -- 86%

It's a wonderful thing how advertising pays for the wonderful free Internet services. 

Looking back to when I was a kid, I guess that how we got all those marvelous TV shows without having to pay for a cable subscription. 

But what I always wonder in the back of my mind is whether collecting advertising dollars is a REAL business. 

Yeah, sure these companies are mammoth and have made themselves and their shareholders gazillions of dollars.  

But somewhere I keep telling myself this doesn't quite add up. 

If you make something of value then someone is willing to pay for it. 

If it doesn't have value then you have to give it away for free. 

If facebook or twitter actually charged money for their service, I can't imagine anyone would actually pay squat for it.  

Google is another story, but if they started to charge, you'd just go to a service like Explorer or Safari that doesn't.

So if the only way to provide the service is to shove advertising down your customer's throats, again I have to ask is that really a business. 

If I can't see how a company can sell something based on the VALUE they are providing, honestly it's not something that I can really get myself behind. 

Out of the three companies--Google is perhaps the only one that I can see as a real something. 

As for Facebook and Twitter, despite the Presidential tweets and Russian interference in our elections, I don't see the underlying greatness. 

Maybe I am way wrong, but if you don't want to pay for it then what the heck is it really worth! ;-)

(Source Photo: Andy Blumenthal)

Advertising Platforms As A REAL Business Model?

The Cloud Pays Off

So for those of you who thought the cloud only pays if your a consumer of technology who is looking for scalability and flexible pricing models, think again. 

Bloomberg has an interesting article on how Adobe is growing their revenue by billions switching their apps to to the cloud. 

Instead of customers paying a one time purchase price for Creative Suite or Acrobat, now customers must pay for Creative Cloud or Document Cloud subscription fees that may sound small in the beginning, but really add up over time. 

And more than that, Adobe doesn't have to worry about wowing customers with the next upgrade in order to get them to make another purchase, because as long as their products are competitive, the customers will keep paying their subscriptions fees money month after money month.

What's better than making a sale to a customer?  Selling to them in a cloud subscription model that keeps paying and paying and paying. 

No wonder it's better to have your head and technology in the cloud--it's a true rainmaker! ;-)

(Source Photo: Andy Blumenthal)

The Cloud Pays Off