I find it amusing that people are rediscovering the age-old concept of running business that directly charges a customer for a product or service that nets a profit.
This post strikes me as a "gee whiz" rediscovery of that fact through the conflation of:
1. Web 2.0 companies that "won" were really media companies. To win you need lots of eye balls.
2. A person can charge more for a product than it costs and get profit, which can be reinvested back into the product.
3. Instead of waiting for "profit" in said point above (which is risk to you and your company), you can instead reallocate that risk on future customers (and gauge interest at the same time).
I believe that the people running Web2.0 companies publicly and privately refuse to admit they are running media companies. ie "Twitter CEO Dick Costolo: We’re Not a Media Company" (source: http://allthingsd.com/20120130/live-at-dive-twitters-dick-co... )
Your quote is unfairly taken out of context. Here is the full quote:
Costolo: We’re not a media company. We’re in the media business. We distribute traffic. We’re one of the largest drivers of traffic to all sorts of other media property.
Dick Costolo seems to understand that driving traffic - perhaps from ads - is where Twitter makes money
What's wrong with just saying "We are a media company" if you are a media company. The definition of a media company is fairly well understood, right? Why insist that you occupy some slightly semantically different space?
Context man! He was speaking at a media conference filled with traditional media co's, such as The New Yorker, Viacom, and ESPN. It was even run by WSJ. To that audience, his statement highlights the nuance of traffic referral vs. accumulating page views, which is why Twitter is potentially poised for greater monetization than a "traditional" media company.
It feels unfair to pull that quote out of context. The point you are making is very different than the point that Costolo was making when he said it.
Do you say you are a media company? Because - by your definition - you are! There are plenty of media companies that don't sell advertising (eg, book publishers).
Twitter isn't a media company because they say they aren't! They see their goal as microblogging/self expression/communication (or whatever it is), and selling ads is just a means to that end. Google is that same - they see themselves as a engineering company organizing all the worlds information, and selling ads is just how they pay for it.
Compare that to something like News Ltd or NYT. They seem themselves as a media companies, and so when they run into technology problems they don't adapt well.
This post strikes me as a "gee whiz" rediscovery of that fact through the conflation of:
1. Web 2.0 companies that "won" were really media companies. To win you need lots of eye balls.
2. A person can charge more for a product than it costs and get profit, which can be reinvested back into the product.
3. Instead of waiting for "profit" in said point above (which is risk to you and your company), you can instead reallocate that risk on future customers (and gauge interest at the same time).
That said, I do admire Dalton's efforts.