Archive for April, 2009

Still searching for the green

School is finally starting to calm down…which means finals are close! The sweltering heat has also made it excruciatingly difficult to do anything productive. I just might have to escape to the library for the free air conditioning…

Today’s Washington Post featured an interesting article on Facebook’s “Causes” application, which lets you donate directly to your cause of choice. The article mentions that despite a large non-profit presence on Facebook Causes, many organizations have experienced very small financial return.

This is a major concern surrounding internet-based ventures. Many supposedly lucrative companies–such as Twitter, Facebook, Youtube, and some argue even Google–have yet to actually produce real, sustainable profits, or at least profits that match the premium other companies/investors have put on it. Couple this with the “everything should be free” general attitude many internet users hold, and the popularity of open-source, non-profit profits. Donations can only go so far. To match those investors’ high expectations, you need a viable business model. How much is Google actually pulling in from advertisers (I should probably get around to looking at financial statements and annual reports sometime for this one)? Google gives out products like candy on Halloween.

Are there really cookies waiting for us in the jar, or were there never any to begin with?

Until a new or successful business model brings in real dollars–and soon–there are going to be some very angry investors out there.

Someone told me something pretty interesting last week: “Just because all this technology is out there doesn’t mean companies have to utilize it all.” A valid point. Do people really follow company twitters that extensively? How many blogs are out there that no one reads (maybe even this one?)? Causes is a good publicity mechanism, but it seems that for now, traditional fundraising remains dominant.

Worst case scenario for internet-based companies. Could you face and calm this angry mob?

Worst case scenario for internet-based companies. Could you face and calm this angry mob?

Or, if you’re like me and delete/ignore all requests (including Causes), perhaps the application isn’t such a great publicity tool after all. I ignore many because I feel that many people with Causes are just bandwagon supporters. For example, look towards Facebook Groups. Many Facebook users will go as far as joining a group for something believe in (think of all those “NO NEW FACEBOOK” groups, or “One Million Strong for __Your Name Here__), but usually will do nothing past that. In this way, Causes is reduced to a means of broadcasting empty, unsubstantiated support for “causes,” which can merely be collected like Boy Scout patches, stamps, or Pokemon cards.

I’m not a cynic–in fact, I’m an ardent user of web 2.0–but I do think one should cautiously consider whether or not a business is actually viable before jumping on the “Facebook is work $203498320498320 billion dollars” bandwagon. So show me the money! And I want real dollars, none of that huge, unsubstantiated P/E ratio bs.


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