A long list of Web business models


Chris Anderson, Fred Wilson and Dave McClure have created a great list of Web business models. The list includes:

  • E-commerce
  • CPM ads
  • CPC ads
  • CPT ads
  • Lead generation
  • Subscription revenues
  • Affiliate revenues (think: Amazon Associates)
  • Rental of subscriber lists
  • Sale of information (selling data about users-aggregate/statistical or individual)
  • Licensing of brand (people pay to use a media brand as implied endorsement)
  • Licensing of content (syndication)
  • Getting the users to create something of value for free and applying any of the above to monetize it. (Like Digg)
  • Upgraded service/content
  • Alternate output (print/print-on-demand, t-shirts, etc)
  • Custom services (installation, support services)
  • Live events
  • Souvenirs/”Merchandise”
  • Co-branded spinoff
  • Cost Per Install (popular with top Facebook apps)
  • Sponsorships
  • Listings
  • Paid Inclusion
  • Multimedia ads (video ads)
  • API Fees (charging third parties to access your API, like Alexa)
  • FeedSense
  • FeedSearch
  • FanPageApps

To this, I have a few more to add:

(i) Donations. Several sites that I visit frequently, do not charge for the services/software they provide, but rely on donations from the user base. Many of the torrent sites follow this model as well.

(ii) Domain name value appreciation. This is a modern version of Sears, where the operation of the company lost money but the real estate owned by company appreciated significantly. Example - spark.com; the site lay dormant for a long time but the domain name appreciated in value. Spark Networks, a collection of dating site, purchased it in 2004; I know because I negotiated the deal for the purchase of spark.com and worked with Spark Networks on the IP side of their re-branding strategy.

(iii) Ad exchange credits. I haven’t seen this used recently, but this method involves showing ads from an ad-exchange and accumulating reciprocal ad credits, which can be sold to third party.

(iv) Sale of traffic. Example - BlogOhBlog.com gave away free wordpress themes for about 6 months with very limited monetization. At the end of the 6 month period, it had 100k visitors/month and the domain name BlogOhBlog.com was sold for $10k.

I am sure there are others. Please leave a comment here or at Fred’s blog if you would like to add it to the growing list.

Green cars - top picks

Green cars are getting - well greener with the latest crop of electric and hybrid cars hitting the market with prices all the way up to a half of a million dollars!

Our top picks of the electric/ hybrid cars

image Most likely to impress: The Venturi Fetish wins this category. The fact that you were willing to drop $435k just to save the environment has to impress a few folks. So what if it sports less of a range and top speed than cars a tenth of its price? If you are worried about such mundane things, you might be looking at the wrong end of the spectrum!

 image Most likely to get rid of your date in a hurry: If you have an extra $108k, why not spend it on something really ugly - like the Commuter Cars Tango T600? With a face only a CEO could love (and a body to match!), this strange 3 wheel design electric could make a great getaway car with a top speed of 150 mph and the ability to squeeze between two traffic lanes!

 image The coolest: The most sexy car, by far, is still the Tesla roadster - although the car has had its share of growing pains recently. For those who have been salivating ever since they put down their $20,000 deposits on the car, we wish them the best and hope the wait is not too much longer.

 image Best "value": If you want the most range and top speed for the buck, and don’t particularly care that your car looks like a green bug flapping its wings, the Brazilian Obvio 828e is a good choice. Designed by the racing legend Anisio Campos, the all electric car will get you around town with a max range of 240 miles and top speed 120 mph for a price of $49k.

 image Funniest looking car: In this category, the Myers Motos NmG (No more Gas) rolls on its own. Reminiscent of the wiener mobile, this car makes up for its outlandish looks by not going very far (30 miles, tops)!


For a complete list of 27 electric car companies, see VentureBeat.

Tesla motors- growing pains, transitions & stealth bloodbath


A little background on Tesla: Tesla Motors is a silicon valley automobile startup company, and has promised an electric car that goes 0-60 in 4 seconds, gets 135 mpg equivalent, has a range of 200+Miles and has the top speed of 125 mph.

Total investment so far - about $105M. A prototype was unveiled in 2006 and production is expected start in the first part of 2008. The company has about 250 employees. As of August, there were 500+ roadster reserved, each paying anywhere from $5k to $100k to reserve the car.

The company was started by engineer Martin Eberhard and others in 2003, and Eberhard served as the CEO till very recently. Amid production delays, Eberhard was given a new title and in December 2007, Ze’ev Drori took over as the new CEO.

ImageTesla also announced that they were seeking $40M of additional funding and are experiencing transmission problems. A one speed transmission system, that will deliver max speed of 80 mph is available but since the expectation is to have the top speed of 125 mph, they are looking to get a two speed transmission. The company claims that it is a “logistical” problem and not a technology problem.

It is no secret that Eberhard was less then pleased with the way he was treated during the transition to the new CEO.

In his blog, Eberhard claims that there is a stealth bloodbath going on at Tesla and that 27 people that he knows of, have been let go, including some people in the transmission team, a few very knowledgeable engineers and several vice president.

Ze’ev Drori (CEO) and Elon Musk (Chairman of the board) sent an email to customers saying:

Tesla is a company of many extraordinary individuals. To succeed, we must continuously develop a top performing team. Since resources are very precious, this also means that we must make hard decisions where need be and part ways with those whose performance has not matched expectations. These actions were taken after careful analysis by the leadership team, and not by a shotgun approach.

At the same time, we continue to look for extraordinary people, with or without automotive experience, to join our team. If you know such people please send them our way.

I have no information about the inner workings of the Tesla Motors; but I do know that at times, you want to go in and you are so angry at the state of affairs at a company, you want to fire everybody who had any hand in getting to that stage.

When I moved to NoCalifornia during the tail end of the Internet boom, and join a business incubator, one of my first tasks was to close down two of the companies. Some of it was related to the general state of the investment and some of it had to do with the people involved. Sometimes, you need to let the whole team go, so that the new team is not contaminated with the old way of thinking that did not work and precipitated the need to get a new team! Yes, I have been there.

In 2006, when the prototype of Tesla motor was unveiled, the company was ahead by at least 2 years compared to other competitors in the field of electric vehicles. To lose that precious time and not having a car on the road even in the early part of 2008, is something that probably troubled the investors and possibly called for drastic measures.

The company is not in the start-up phase any more; right now the focus of the comp may is in getting the production effectuated and increased. The needs are different, the skill set required is different, and I am not surprised that the new CEO wants to start with a new team.

Tesla says that these are not layoffs, they are ‘firings’; the whole team was probably in some sort of funk and certain mode of thinking that was holding them back in getting the car on the road and having “logistical” transmission issues.

The new CEO has even taken the bold step of suggesting that in order to get the car on the road, he might consider putting in an “interim transmission” in the car that will be swapped out after a few months when the production for new transmission is moving at the full throttle.

Transitions are always difficult, this one seems even harder. But I do not see anything other than a “transition” here; for ex-CEO who was forced out, to suggest that there is a “blood bath”, and obliquely suggest that the project might not survive, is not in the best interest of the company.

Tesla motors has great plans, they want to produce an electric car that is further enhanced by solar power, they want to produce a sport sedan and they are ahead in terms of technology. Let us give the new CEO time and lee way to get the system in place to focus on production.

True, the layoff or the transition has not been handled in the best way, but at times, when the participants are reluctant, there is no good way to handle transitions.

Liberty Media buying bodybuilding.com for $100 million

image Debt crunch not withstanding, deal making at the sub-billion dollar level carries on at a decent clip. Liberty Media Corp. - parent of the publicly traded Liberty Interactive (which owns QVC) and Liberty Capital (which owns Starz) has announced that it will acquire a controlling stake in bodybuiding.com.

Liberty Media has been focusing on acquiring niche internet sites which actually have real revenues. Their past acquisitions include backcountry.com - an ecommerce site that sells outdoor sporting gear, and proflowers.com, an online flower delivery service.

Bodybuilding.com contains a lot of information on fitness and body building (18,000 pages according to them) and has an active community. The site is getting about 2 million visitors per month, has 100,000 users, and sells a whole range of health, fitness, muscle building and weight loss products.

Bodybuilding was self funded until 2007, when the private equity firm, Milestone Partners acquired a 60% stake in the company.

Bodybuiding.com’s revenues are expected to reach $120 million in 2008, up from $90 million in 2007. Given the numbers on the acquisition ($100 million for a controlling stake), Liberty Media seems to be getting a pretty good deal!

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