Nada Collar

Revenue sharing in its true sense is about sharing the profits with the workers. It used to be profit sharing, and you, the grunt, got a small check from your employer when they made good profits for the year.

Enter the web, fast forward to what I like to call web 1.5, the Google Adsense phenomenon, and suddenly everyone is in the money. Revenue is here, sharing is on its way. Move to web 2.0 and suddenly its all about user generated content. Along the way some less (or maybe more?) greedy people realized that if the user is generating the content, why not give them some of the revenue.

From what I can tell, Digital point forums pioneered the revenue sharing forum concept and code. Digital point is a site for web masters and seems to focus on making money from your website. It would seem natural that such a site would see the potential of sharing the revenue. The basic idea is that for every thread that you comment in you have a chance that your Google affiliate ID is used when that page is viewed.

What is the potential of sharing? If you are reading this article you probably don’t need to be told. Making a user generated site (or indeed any site) successful can be hard work, and a successful site is required to make money. So why not offer an incentive to get users to make your site successful. After all, taking 50% of the revenue and giving away the other 50% is better than getting nothing.

Pay per blog (ie PayPerPost) is another revenue sharing idea, although it deservedly gets much negative attention for not being an obvious paid placement. Google understood the market when they started with paid search placement (they made it obvious to the user that the link was paid). To my thinking it would seem that paying people directly for writing articles of any kind is the wrong focus. On the other hand, paying people for results (ala Affiliates, or Cost Per Action) works. No doubt Google realized this also and felt that people who click on ads when they KNOW they are ads are more likely looking for something that might be found from an ad. After all Google is the master of targeted ads and maximizing revenue.

Michael Arrington of Techcrunch recently wrote “PayPerPost is now officially absurd” referring to a new initiative of PayPerPost about disclosure. It would seem PayPerPost is now advising their users to blatantly lie about their paid placements, all in the name of disclosure (as he puts it - a move reminiscent of big tobacco funding tobacco research). If the blogger is feeling particularly honest they also have an option for being upfront about being paid. Nice.

Social Shopping seems to be getting in on the revenue sharing also. Online shopping is where I see some big money and opportunities in revenue sharing. Right now the focus seems to be on social shopping, most likely because everyone is thinking about the success of myspace.com and want to cash in. MyPickList.com is one example.

Given the recent success of YouTube.com I expect to see some new ideas in the video space. At the moment video is what its all about. But video is hard to make ads for, and its expensive to host. But you can bet that google are working on perfecting the the art of contextual video or something similar. In the meantime, pay to make video has started: Revver, Metacafe, Google, Brightcove and it works for some.

Of course the flip side to all this is the argument that a lot of crap gets created when the goal is to make money. You just have to look at Hollywood. The starving artist model seems to work for original content. Hopefully in this case when the distribution network is controlled by the user (ratings etc) most of the crap will fall by the side and the real content will shine through. Google works hard to make sure of that with text, lets hope they can with video.