May 17, 2007
Volume 12, Number 17
CHRIS SHIPLEY: DELIVER VALUE, NOT ADVERTISING
In a contrarian move, the family-focused Web hosting and social networking site Famster.com announced late last week it would dump advertising and move to a subscription-only business model. The move comes in response to "user feedback," according to the press announcement. "We find that families do not want to have their profiles cluttered with advertising," says Famster CEO Wayne Naphtal.
Interestingly, Web businesses have yet to find whether families - or anyone else for that matter - want to pay for Web-based services, either.
Famster will continue to provide free accounts to current Famster members for "as long as these members wish to maintain their Famster accounts." Effective immediately, all new members will pay $9.95 after a two-week free trial.
I've long been an advocate of asking consumers to pay for valuable services, so I should applaud Famster's decision to place a strong value on its business. Unfortunately, I don't think it's going to work. The problem here is twofold: 1) Too many other blog sites are happy to give away comparable services for less or no hard cost (to be clear, waiting for advertisements to load and giving them some mind is a form of payment). Second, Famster does a poor job of establishing a value proposition in the current iteration of its site.
Read more at:
http://www.demo.com/demoletter/delivering_value_instead_of_advertising.php
KEITH SHAW: GOODBYE, U3, AT LEAST FOR NOW
I have a soft spot for U3, which appeared at DEMOfall 2005. The group, a joint venture between SanDisk and m-Systems, developed smart USB drives that could run applications directly from the drive instead of needing to be installed on a PC. It greatly increased mobility for many users, who could carry applications and data around with them without having to be attached to a specific PC. After the U3 drive was removed, no trace (in theory) of the session would exist on the PC.
After SanDisk acquired m-systems in November 2006, the U3 LLC became a wholly owned subsidiary of SanDisk. Today, it appears that U3 will go away, or at least become part of a new venture that SanDisk created with Microsoft.
The two companies announced an agreement "to deliver a next-generation software and hardware solution" that places applications and personal customization on USB flash drives and flash memory cards. SanDisk says the new venture will expand on and replace its existing U3 Smart Technology.
Read more at:
http://www.demo.com/demoletter/goodbye_u3_at_least_for_now.php
DEMOTRACKER: The latest from DEMO alumni
* Jajah (DEMOfall 2006) raises $20 million in Series C funding, led by Intel Capital.
* BeInSync (DEMO 2004) launches Version 3 of its data synchronization and backup software for multiple systems.
The complete DEMOtracker archive is located at http://www.demo.com/demoletter/weather_report.php
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DEMOletter Weekly Edition is written by Chris Shipley <mailto:chris@cshipley.com> and Keith Shaw <mailto:kshaw@nww.com>
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