Free vs. Paywall

Posted on October 2, 2010


Believe it or not, there are big-time social networking sites that are deemed by users to be valuable, but by the owners–unprofitable.  Such is said, by Dick Costolo, Chief Operating Officer (COO) of Twitter.

As of now, Promoted Tweets, which are posted by advertising partners for users, is what’s pumping in all their revenue.  Costolo says the reason behind for Twitter’s  unprofitability is because they are currently building up tweeters.  They’re trying to see what the future holds–how users adapt to the promoted tweets and their use of the different applications.
Recently, CNN has reported that online companies are switching on paywall because they were previously not profiting.  Companies like:

  • Scribd, online publishers of documents and other works for users to read
  • Skysa, a web application program
  • TeachStreet, where you can find local classes.

Can you imagine how users felt when they found out that they will not be using these profound tools unless they pay?

Now how would you feel if facebook or twitter decided to do the same? Maybe not now, but should we prepare for this?

We can’t always expect things to be free.  These social networks are essential to some businesses and to people like you and me.