Speculating About Business Models

One downside of a “free plus ad-supported” business model is that it could impact the quality of the content offerings. On one side, free encourages anyone to take part – quite often, spam results. Blogspot is an example – the growth in the popularity of blogging, the importance Google gives to blogs in general and Blogspot in particular, and the fact that anyone can set up a free blog on blogspot, has led to an explosion of splogs.

On the other side, the fact that it’s ad-supported irks serious content creators and providers; the view often expressed is “If you’re going to earn money from something I create, why don’t you pay me for it?” It’s the classic amateur versus professional distinction that comes into play; for example, you’re more likely to find professional bloggers on Typepad rather than on Blogspot, even though you need to pay for hosting your blog on Typepad.

The more serious or business-oriented the offering, the less attractive the Ad-supported model, for another reason – advertising is typically seen as consumer oriented, and may not be as sustainable for a business-oriented activity. Look at Krugle – a search tool for programmers and coders, many of whom prefer the do-it-yourself approach. The chances that they would respond to advertising is much lower, which makes it less attractive for an advertiser.

Krugle has me intrigued – I’m wondering what the business model is, since there are practically no clues from the site or the blog. The basic code search appears to be free, and the signup process just asks for a name and email, similar to other free services. The blog does have an entry talking in general about Open Source Business Models, without any other details. But there has to be one – you don’t get $6 million in venture funding without a business and revenue model.

I’m speculating here – could it be a membership / subscription style model? Without doubt, professionals would pay handsomely for a tool that is of value; fees in the hundreds to thousands of dollars range wouldn’t be out of place. Another possibility is for Certifaction – code blocks, as well as coders, for a fee. A cut for marketplace transactions, Elance style? Or even – with a significant part of the coding community participating, leveraging those capabilities to offer services to non-geek customers?

If anyone from Krugle does see this, feel free to add your comments; or use any of the ideas above.