The Secret About Marketplaces. Shhh.
Here's a riddle for you. If 500 word articles written by people on Rent A Coder cost $5 each, how much money would you have to spend to generate as much content as About.com?
Answer: A little over $350M (based on about 71M about.com web pages listed in Google). That's not including all the cost associated with coming up with the topics, proofing the content, and posting it to your web site.
It has always been a challenge to come up with good, fresh content. Auto-generators are one answer. Auto-generators, however, are best for attracting the spiders (e.g. Google, Yahoo, and MSN), since the content they produce is not yet good enough for humans. RSS feeds are a form of machine-generated content, but unlike the articles they syndicate, RSS feeds are not original content. That makes them good for attracting humans, but ironically, bad for attracting the spiders.
Wikipedia generates content through the participation of users. So does TripAdvisor, with its millions of user-generated travel reviews. Craig's List. Judy's Book. Or any popular old-fashioned forum on the net, from SearchEngineWorld to the multitude of shopping and discount coupon forums.
But the value of user-generated content is no secret. Seed a forum of any form with a topic people are interested in, and users will start to generate content. That creates value for users and for the site owner. The resulting content can create revenue opportunities through advertising or lead generation.
What is a secret is that marketplaces are a wonderful form of user-generated content. Traditional user generated content has an ulterior motive (as TV networks do with TV shows), that is, to sell advertising. In a marketplace, the user generated content is what is monetized.
The items on a marketplace have some inherent value. Unlike banner ads, these items do not suffer from downward price pressure the way advertisements do. Publishers everywhere say that their CPM rates for banner ads and the like are getting pushed lower and lower. Marketplace items do not suffer the same fate.
eBay of course is the largest example of a successful online marketplace. Many new marketplaces are coming online across a variety of categories, from leads to loans.
In the past, such marketplaces have not been possible due to the overwhelming strength of large players or a lack of standards.
But competition is heating up. Marketplaces are the secret new user generated content and they are going to spread like wildfire across every category where there are buyers and sellers. With marketplaces, there is no ulterior motive. Marketplaces are about money. Plain and simple.
Answer: A little over $350M (based on about 71M about.com web pages listed in Google). That's not including all the cost associated with coming up with the topics, proofing the content, and posting it to your web site.
It has always been a challenge to come up with good, fresh content. Auto-generators are one answer. Auto-generators, however, are best for attracting the spiders (e.g. Google, Yahoo, and MSN), since the content they produce is not yet good enough for humans. RSS feeds are a form of machine-generated content, but unlike the articles they syndicate, RSS feeds are not original content. That makes them good for attracting humans, but ironically, bad for attracting the spiders.
Wikipedia generates content through the participation of users. So does TripAdvisor, with its millions of user-generated travel reviews. Craig's List. Judy's Book. Or any popular old-fashioned forum on the net, from SearchEngineWorld to the multitude of shopping and discount coupon forums.
But the value of user-generated content is no secret. Seed a forum of any form with a topic people are interested in, and users will start to generate content. That creates value for users and for the site owner. The resulting content can create revenue opportunities through advertising or lead generation.
What is a secret is that marketplaces are a wonderful form of user-generated content. Traditional user generated content has an ulterior motive (as TV networks do with TV shows), that is, to sell advertising. In a marketplace, the user generated content is what is monetized.
The items on a marketplace have some inherent value. Unlike banner ads, these items do not suffer from downward price pressure the way advertisements do. Publishers everywhere say that their CPM rates for banner ads and the like are getting pushed lower and lower. Marketplace items do not suffer the same fate.
eBay of course is the largest example of a successful online marketplace. Many new marketplaces are coming online across a variety of categories, from leads to loans.
In the past, such marketplaces have not been possible due to the overwhelming strength of large players or a lack of standards.
But competition is heating up. Marketplaces are the secret new user generated content and they are going to spread like wildfire across every category where there are buyers and sellers. With marketplaces, there is no ulterior motive. Marketplaces are about money. Plain and simple.
posted by David at 9:10 PM
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