Wednesday, June 10, 2009

How do they do it?

Google, Hulu, YouTube, Facebook.

How much do you think it costs to keep those websites running and growing every day? A lot. When was the last time you paid your Google, Hulu, YouTube, or Facebook bill? Never? Hm. That's odd. How do they stay in business?

Advertising, of course. Google gets paid a few pennies by the advertiser whenever an ad gets clicked. You knew that already. You scoffed at my pathetic, pretentious rehetorical questions. But think about it for a minute. How often do you click on internet ads? Even if you have clicked some, how much stuff have you actually bought as a result of clicking on them?

For me, the answers to these questions are: "almost never", and "nothing I'm aware of", but apparently someone must be clicking. Google continues to make money, so advertisers must be paying them. My question is: Who is clicking? Are there really that many people in the world that are dumb enough to click on ads for sketchy internet companies? That's crazy.

Maybe the sketchy companies aren't the main money makers. Maybe, like with television ads, it's the Coca-Colas and the FedExes of the world that really drop the big bucks. In that case, I ask: How the heck do those ads bring in any business for the massive corporations that place them? Who on earth thinks, "Oh, Coca-Cola. I've never tried that before. Looks pretty neat, maybe I should buy some." How can the millions of dollars that these companies spend on ads every year be paying off when they already own their markets?

I am not a marketing or business major. I do not know how this stuff works. Apparently people that study this stuff think that it works, but my gut feeling is that it doesn't. I think we're in an advertising bubble. In a few years, companies will realize that their internet ads are not worth nearly what they've been paying for them and they'll pull the plug, and Google, Hulu, YouTube, NewYorkTimes.com, and Facebook will all fold or become subscription or fee-based sites. That's my crazy, uninformed, wildly speculative prediction: Ten years from now, far fewer things will be free on the internet.

Either that, or people are just really, really stupid and can be talked into buying anything. I hope this is the case, because that would mean that all the stupid people in the world are paying for the vast majority of my favorite websites, and will continue to do so. If this is what is happening, then I say: Thank you, gullible American consumers. I owe you one.

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