FoxTrax Blog

There's a McDonald's commercial that shows a cable-repairman staring stupidly at a couple of wires. There's a tin can next to him. Someone reaches over and drops a few dollars into the can, and the cable man thanks them and connects the wires. And this, it seems, is very much like the internet.

Internet Business Model #2: The Tip Jar

Several websites make money solely on the basis of "If you love us, you won't let us go out of business." The most notorious of these is probably Wikipedia (although they may have other revenue streams I don't know about). But there are others: several internet radio stations keep themselves funded by soliciting donations PBS-style from their listeners, sometimes pairing this up with kickbacks and referrals.

Continuing the line of thought from yesterday, right now there's not really the infrastructure to allow people to pay small amounts of money. But what if there was a button on your browser that, when you clicked it, would give $.05 to the site? Would a lot of people donating a nickel net more revenue than a few people donating $100's?

What's most interesting about these sites is that they place valuation completely on the user. If you like the service, send us something to help keep the lights on. How much or how little is up to you, but every bit helps. Invariably, a lot of users donate nothing, and invariably several users donate substantial chunks of change. So, in the end, the same service that may absolutely taken for granted by one person is over-valued by someone else. And that's just a little bit fascinating to me.

Labels: technology