Hosted Applications and the Future of Portals
Great piece by Eric over at his blog, Community in Context. He cites a recent deal between Yahoo and social network site Bebo, in which the mega-portal bought the right to place ad units on their pages. A novel strategy, but ultimately expensive and non-scalable, says Eric. Hosted applications, on the other hand, present a logical and cost-effective alternative for the portal looking to increase ad revenue beyond the confines of its domain name. Check out the below quote and read the whole thing after the jump.
Think of the way NBC earns the right to insert ads on 3rd party television stations by providing them television shows. Imagine if NBC provided only ads to television stations (e.g. no television shows). Clearly the “adsense model” would not work for television networks and it won’t work indefinitely on the Web. And so it won’t be long before Google (and others) begin to think about packaging hosted applications with their ad programs to earn publisher loyalty.
