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Do widgets ever generate revenue?

Jeremy Liew recently posted on the wave of posts (most notably Marc Andreesen and Seth Goldstein) about API power and how that works with Facebook.  I am working on my own post in this area, but obviously the part I gravitated toward was his mentions of the need for a social network advertising standard for widget vendors.  He cites this as the key to creating an environment for API developers to create revenue streams.

I am not so sure.  Before you have common standards for social network advertising, there has to be a demonstrated success of a mechanism that actually makes money (and probably competing incompatible standards that both appear to work).  I cannot think of a single widget (and maybe this is my lack of exposure) that is generating anything more than pennies in revenue.  Widgets are marketing expense.  They are part of a service/drive traffic to a service by adding some sort of value on other pages.  There have not been nearly enough good examples of a monetization model that works across widget genres.  For example, pre-roll ads would work in video widgets or slide widgets, but not in something like mybloglog.  Until some common ideas emerge for how to monetize these things, how can we drive to a standard?

Even his post on the need for a standard starts by citing a study where MySpace basically tries to sell that “friending brands works”.  Can a widget company survive on selling skins?  I have no idea.  Jeremy needs to be telling his portfolio companies to have Dynamic Logic run a branding study or something on the impact of widget skins.

7 Responses to “Do widgets ever generate revenue?”

  1. Jeremy Says:

    “I cannot think of a single widget (and maybe this is my lack of exposure) that is generating anything more than pennies in revenue.”

    how about google adsense. is it not a widget? you take a snippet of JS code, embed on your blog or website, and make money through targeted advertising.

    there are widgets that generate transactional revenue (i.e. amazon and ebay widgets.)

    bottom line, if a widget can get millions of views, it’s valuable in the eyes of advertisers… i think this has already been demonstrated. however, i agree that there needs to be standards.

  2. brent Says:

    Holy cow – Ad banners are widgets? OK, we have proven that widgets that are ads or affiliate-ish things make money. I don’t think that the widgets we are talking about here are things that people put up to show advertisements. If someone puts up a slide show, do they want ads to appear? Probably not. When people put up Google AdSense, they want text links to appear. The challenge in monetizing widgets is to serve the community that loves the widgets in a way that somehow makes money. One of two things must happen:

    1) We have to find a way to make people want ads
    2) We have to find a new format for ads that does not bother people

    My point is that #2 is probably the answer and we are probably still in the experimentation stage rather than full-blown standards-development.

  3. Jon Argles Says:

    Hi, I’ve just followed a link to this site searching for Google Organisational data. As most of the additions are from cogmapper – which I assume is your good self – can you tell me how confident you are about this data and where it came from? For a start, I always thought Sergey Brin was hands off when it came to management.

    In fact, having called yourself a ‘Wiki-orgchart’ that’s the saving grace of the Wales suite, that every source is expected to be cited and referenced, so people know if they’re on a sturdy bridge or a shaky rope-ladder, fact-wise. Admittedly, a lot of sources will be gleaned through personal offline knowledge, but then at least the confidence levels can be set accordingly.

  4. Jeremy Says:

    Brent, if you ever solve problem 1 and 2, give me a shout… can’t remember the last time i as a user said, wow, aren’t those ads in my mail client or social network great. or felt that they weren’t in the way…

  5. brent Says:

    Jeremy – I guess my point was that if widgets just means “containers for ads”, then that’s kinda lame. It would be better if widgets were able to find a unique monetization scheme representing the value they create.

    Jon – love the thoughtful comments. Obviously the challenge with this kind of data is that it is hard to cite because there are no publicly available references. If you look at many of the “cogmapper” edits, most of them are simply fixing bad edits from random spammers.

    We have been talking a lot about how to create a system where people can vote on map quality, the problem is you would want to have votes tied to specific versions of maps unless a change is very small or something. Would love to get ideas on how to better do this.

  6. Jon Argles Says:

    Well, the easiest way would be to have a reference line in the details tag. If there’s nothing there, it’s coloured red.

    If the quote is ticked as ‘personal knowledge’ then it’s yellow.

    If people want to quote a source, to save spamming, all searches are subject to name validation.

    So, example, I want to put some details in about Jonathan Rosenberg. I put that his job title is “cowboy ninja pirate,” and put in a web page. Your bot runs off and searches that web page and fails to find any reference to Jonathan Rosenberg or cowboy ninja pirate. Thus it does not let the link stand.

    If, however, i say he’s a Senior Vice President, product management, and quote this page: then that gives auditability. Admittedly, I could say he’s Chief Financial Officer, which is on the same page, so it’s not a flawless system, but anyone using these for serious purposes is going to want to check the sources for themselves anyway. Users could then rank the submissions and links made, as with Ebay’s merchant recommendations. A lot would have to be taken on trust, but as with Ebay and wikis, the wheat eventually squeezes out the chaff.

    Jonathan Rosenberg
    Senior VP, Product Management
    Found by: jon argles (Accuracy rating: Good)

    And the same thing for each link, too, which is the important thing, really – job titles are relatively public, but information about who line manages who – that’s the money stuff.

  7. Cogblog » Blog Archive » Do advertisers want widgets? Says:

    […] resist commenting on Jeremy’s widget monetization post.  This makes me think about the last post I did about Jeremy’s last post discussing facebook widget […]