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Web Profits in the Gutter
The New York Times has an article about the web's one true growth industry: spam, fraud and porn. Societal meltdown or flourishing ecosystem? The talking heads debate.
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"My bullshit web company didn't succeed because it was bullshit, and the only new or good thing about it was its .com address! God, come from heaven and save me!"
How about retooling your business plan to provide services and products that people want. Saying that the only successful businesses that use the web are web-only companies (such as porn) is like saying that the only successful businesses that use the highway are truck stops, motels, and Cracker Barrels.
Spam becomes less successful daily. The first successful spam was the Green Card Lawyer spam and it's all gone downhill radically from there.
As far as fraud goes, show me a commercial space that's free of fraud and I'll show you one that's pretty profitless, constrained, and empty of innovation in general.
What we call folk wisdom is often no more than a kind of expedient stupidity.-Edward Abbey
I'm sure the new york times makes a healthy profit selling people's information that they collect from mandatory registration to advertising firms.
GoatPigSheep, the 3 most important food groups
Porn helped drive the printing and video industries. Gutenberg's second book, after the Bible, was erotic stories.
Spam? Hell, if the U.S. Post Office stopped all "third class" mail (spam), they'd be broke and out of business tomorrow. I've always looked at online spam as an opportunity -- ISPs should do more research into filtering spam and offer it as a premium service.
Fraud online is just like fraud offline. Snake-oil salesman that traveled from town to town during the 1800s comes to mind. Cavaet Emptor -- nothing new here. And with all due respect, anyone who believes some Nigerian ex-thugs that stole billions picked YOU to launder it (and apparantly all your friends, since they all got the same e-mail) DESERVES what they get.
Try as you might, you just can't legislate away greed, sloth and stupidity.
Learning HOW to think is more important than learning WHAT to think.
I really, really did not expect that many people out there to be buying the penis enlargment pills. I mean... think about it for a moment here:
It is really indicative of either
a) a lot of people are erm... sub-par intelligence-wise. or
b) porn / magazine / whatever has gotten a lot of men in a same gridlock as mannaquins has on women: except while you have the "our store sells clothes to 'real women' and we use 'natual models'", you won't ever find a "real-sized penis men's club"... when's the last time you really saw "size small" condoms on sale?
c) or both.
it is really worth worrying to a certain degree. as for the part that basically says "sex sells," well no kidding...
My life in the land of the rising sun.
I remember when the first talk of web-based shops were on the cards. They were saying it was the 'High Street' stores that would lose profits and business... and some chose to do the 'ostrich effect', while others went for the full madness effect (i.e. anyone remember EggHead stores - DUH!).
But it is those stores that have an existing infrastructure who then expand into using the web to generate extra revenue are the ones who will thrive. Just because web shopping came along doesn't mean people will all of a sudden stop going to the mall.
A lot of the porn industry has thrived because of the anonimity, as well as the breaking down of borders... hence laws governing porn.
"We will lose the Internet if we don't save it." and "civil society" has broken down online... probably not, it's just that people know that they can currently get away with doing stuff, and the net still being in its relavtive infancy, people know that they'll be able to do whatever they want until push comes to shove and the governments themselves catch up with technology.
Are you local? There's nothing for you here!
Ever been to a pr0n site? They made money off you from the advertisments. Suck it!
Why is anyone surprised by this? After all, practically none of the dot coms had a viable business model -- it was all "get customers now and make it up later (on volume!). The only thing that made it possible in the first place was the billions upon billions of dollars that venture captial threw into the pot...
As the article mentioned, the things that are working well on the web are the same things that work well (from a financial standpoint) in real life: selling pr0n and ripping people off. Only with the web, you can reach a MUCH wider audience (such as under-age boys [sub-18] with the pr0n -- all without fear of prosecution). After all, no one in their right mind would stand outside a middle school trying to sell copies of porno magazines -- he'd be arrested (and most likely hung) in quick fashion.
But with the web (and spam), these sleazeballs are allowed to advertise to a group that was previously off-limits. The rest is basic economics: increase the size of your target audience, increase your sales...
The same thing goes for ripping people off: you're able to reach a wider audience. Slap together a slick web page, and you give yourself an air of legitimacy -- all the better to draw in the stupid and gullible.
The internet is not making people more stupid, and isn't contributing to the demise of society... It is merely bringing the existing stupidity and lack of culture to the forefront of society, instead of letting it hide in dark corners... It is making depravity more visible, that's all.
That means that 500,000 people ordered penis enlargement pills!!! Five hundred thousand!!!.
If there are five hundred thousand people out there stupid enough to read their spam, then visit the web site and actually send the money... it shouldn't surprise people that the internet is full of garbage content. Oh wait, the surprised people are probably the same people who sent their $60.
The internet can't make stupid people less stupid, and frankly it can't make smart people smarter. All it can do is let smart people get at information they want faster, and stupid people get to the charlatans faster. Anyone who is really surprised by any of this, please send me $40 and I'll send you my left over penis enlargement pills.
I've been on the 'net since the days of Mosaic and before that, WAIS and Gopher. You know what I just realized? I've NEVER paid cash money for "online content". Maybe someday I will, but not yet. I don't use the internet as a "consumer". I use it for information, mostly, and maybe 10% of the time for entertainment. The non-pr0n kind. Big media wanted the internet to become another vehicle to the masses like television. It's not working and I say Thank Heaven. It doesn't surprise me at all that AOL has hit the wall. They have never really provided their customers with "the Internet". They basically provided their advertisers with their subscribers' eyeballs. AOL in trouble. What a beautiful thing.
Clueless congressional representatives, obeying their masters in Holywood, have taken up the cry that the reason highspeed broadband internet access hasn't really taken off is that there is no "online content" that will entice consumers into the arena. Then they use that excuse to say that Holywood won't provide this content until they can be "protected" from IP theft (which is a bogus concept, but that's another story). The bright spot in there is that the big communications giants have strung a ton of fiber around the U.S. and there's a glut of it. I have a cable modem and my satisfaction with speed on the internet as a whole is above 90%. Thank heaven (again) they built out this high-speed infrastructure before going into a tailspin.
Actually, the porn thing is the one that baffles me. We are talking about the same internet where people trade music all the time for free, but for some reason they don't get that concept with porn? (But then again, I have never even desired to be a member of a porn site, so maybe I am missing something about the motivations involved)
I can answer that one....it's because the pr0n-lords are smart enough to come up with a business model that adapts to the nature of the internet and the needs of the customers.
They charge a reasonable rate for access to their (and often times several partnering) websites...usually $10-$20 for a month's worth of unlimited downloading of pics, movies, etc. Then they keep rolling out new material to keep people coming back. They have different websites to cater to peoples' different tastes, be it asians, blacks, gay, fat chicks, or what have you.
If the RIAA, or better yet the individual artists, would open their eyes and follow a similar model, I think everyone would be a lot better off for it. Yeah there are a lot of charlatans out there, but many of the people running the pr0n companies are smart, smart businessmen. (and women)
This message brought to you by the Council of People Who Are Sick of Seeing More People.
These 3 succeed because they serve their customers. The others are basically doing a terrible job at understanding what the customer wants and providing it at a reasonable price, under reasonable terms.
This is quite obvious. The customer wants it. Someone has it. And the price seems to work out. And the terms are usually pretty good, too (e.g. we're in a different country than your law enforcement, so they can take a hike).
First, understand that the customer is not the one getting the mail. The customer is the one paying the spammer to send mass mail. The price is way cheaper than snail mail spam, so the spammers are succeeding and meeting what their customers want.
The customer in this case is the fraud perpetrator themselves. The victim is not the customer. So in a sense this works, too, when the perpetrator gets away with the booty.
Perhaps internet gambling should be included here, too. It's not as big as porn, but from what I hear, it's nearly as successful. Vice does tend to be a good business model. I'm sure once they have the technology to download matter replication (if there is some kind of digital rights management for it), there will be plenty of places to get marijuana and drugs online. They'd do it if they could, because this is a massive market. Also, knives, guns, bombs, and maybe even nuclear material might be sold this way. You can bet the government would have a fit if the technology allowed this to go on without them being able to trace it all.
now we need to go OSS in diesel cars
There are several reasons for the success of porn on the web.
In no particular order...
1) Porn on the web is easily accessible.
Of course there are other mediums you can use to access porn, but few offer you the satisfaction of porn-on-demand, which is what you can get on the web. For $20, you can get a monthly membership to porn sites that offer all kinds of different content. If you don't want to pay for porn, there are tons of sites out there that offer porn content for free, and then they make money off the ridiculous amounts of advertising pushed to customers through their websites. Compared to more conventional ways of accessing porn (adult video stores, Spice channel, Playboy channel, seedy corner stores) it requires almost no effort to find porn on the web.
2) Many people are willing to pay for porn.
Whether it be the 18 year old kid who's just got his first credit card, the 32 year old father of 4, or an old man in a retirement home, many people are willing to pay to satisfy their lascivious desires. Paying for porn is not a new thing, so people have become accustomed to it. In contrast, people aren't willing to pay for other things on the internet because they've never had to pay for it before (e-mail, information - many libraries allow you to read stuff for free, news articles - broadcast TV allows you to see news for free).
3) They've gotta be making a killing of advertising.
Almost every porn site has some kind of pop-up advertisement that shows up when you visit or exit the site. Since people are already willing to pay for porn, the likelihood of them clicking on an advertisement because the see a girl in the advertisement that's cute, or because they offer videos, or whatever, seems pretty high, as long as they don't open up four or five windows at a time. They've gotta be making lots of money off those click-throughs.
And before you all inundate me with your comments about "how would you know all of this unless you visit lots of porn sites", just know that your assumptions about my websurfing habits are probably right! I'm a nasty bastard who loves porn!
You missed an important reason why porn and fraud have done so well on the internet: anonimity. In the case of porn, it is anonymity form the buyer's point of view. You don't have to go to a video store and admit to a bitter store clerk that you need your porn fix, you just get it deliverd to your home from a faceless company. In the case of fraud, the scammers feel like (and generally are right) that it's easier not to get caught since it's more anonymous and law enforcement is still scrabbling to keep up.
People have been scrutinizing stories of alien landings at Roswell for quite a long time. Just because the "faithful" refuse to see logical counter arguments, doesn't make the fantasy more true.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
I've had my NYT registration for over 5 years now, and have seen no evidence that they've had anything to do with spam or evildoing of any sort. And the *only* email I've ever got from the NYT was when a human answered my complaint about the site having lost my login, and told me what page to go to and how to fix it there.
:)
I don't know why people whine about the NYT reg'n and cookie in particular.. after all, how the hell do they think Slashdot remembers who they are?? (I just looked, my Slashdot cookie is about a mile long. My NYT cookie is nothing but a login ID string. Paranoid conspiracy theorists are invited to explain that.
I actually USE my Netscape cookies.txt, to the point that I copy it to every machine I use. I see no reason why I should have to log into sites like slashdot or tv.yahoo.com, and reset my preferences all the time, when the cookie can do it for me.
~REZ~ #43301. Who'd fake being me anyway?