Spotted two interesting links today.

In the first, The Guardian says that Facebook now has 350m users – and there’s no point in advertising to them.

The premise is that in spite of having a massive userbase, one that is now larger than the population of the USA, Facebook is struggling to extract financial value from their audience.

The second link is a Silicon Valley Insider interview with LinkedIn CEO Jeff Weiner, in which he claims that LinkedIn is still profitable with ad revenues up 50%.

LinkedIn has 3 main revenue streams, with online advertising being only one of them.

Weiner doesn’t give any breakdown, but implies that a significant portion of LinkedIn revenues are generated by their premium subscription business and corporate recruitment solutions.

I blogged this week with a throw-away thought that LinkedIn could possibly be built today as a Facebook application, but now I’m not so sure… it’s clear that LinkedIn have managed to build a profitable business quite different to the type of business that could be created inside Facebook’s ecosystem.

What do you think? Will Facebook become super-profitable?

Related posts:

1. What if LinkedIn was a Facebook app?
2. Farmville vs. LinkedIn

I’ve recently been on holiday in Australia and had a chat to a family member about the future of newspapers.

It was a conversation that may be familiar to many people, and has probably played out thousands of times all over the world.

His position was that he had no interest in reading his news on a screen, and that he preferred a newspaper and was prepared to continue buying and reading them.

My perspective was that newspapers were a terribly inefficient way to consume news – it makes no sense to me to spend time designing and laying out newspaper pages, printing them, driving the papers around in trucks, selling them in shops and in the street, and then reading them and throwing them away.
And for all this effort, the news is a day old when you get to read it.

It struck me that we were talking about very different things, simply because we were confusing the distribution mechanism with the consumption mechanism for our news.
When reading newspapers, they are connected simply because in order to read your content in a broadsheet, printed format, it’s necessary to print and distribute the paper.

When content is distributed digitally, it can be consumed on a laptop, in an internet café, on a mobile phone, or on a reader like the Kindle using an e-Ink display. The distribution mechanism is not linked to how the content is consumed in a digital world in the same way reading a newspaper dictates the distribution mechanism in traditional publishing.

So the crux of our argument was really about how he preferred a particular way of reading his news, while I preferred a particular way of my news being distributed. And I was prepared to put up with an inferior reading experience.

It’s particularly interesting to me that Amazon has released a Kindle reader for iPhone. What this says is that their distribution mechanism and content catalog is so compelling that people are willing to read long-form content on a tiny backlit screen. The cost saving (no Kindle reader to buy) and utility (read your books any time you have your phone with you) make it worth putting up with the limitations of the iPhone as a reading device.
It suggests to me that if the content is compelling, the price is fair, the quality of the reading experience improves, and the devices become cheaper we should see much greater take-up of digital distribution for content that is currently still on paper.

The other area in which the Kindle is succeeding is slightly counter-intuitive… I’ve picked up from numerous comments online that the Kindle is being used by old people with poor vision, and by people who suffer from arthritis.

They find that the Kindle is much easier to read for them than traditional books because of the light weight of the device, the fact that they don’t need to be held open, and because the text can be enlarged to a size that is comfortable for them to read.

If the young folk and the old folk are both prepared to give up paper when the benefits outweigh the drawbacks, we’re looking at a compelling shift in the chosen method of consumption and the associated distribution.

What are your thoughts on how this will play out? Can you see a day when you no longer read long-form material like books, newspapers and magazines on paper?

Related articles by Zemanta

• Newspaper Circulation May Be Worse Than It Looks (abcnews.go.com)
• Book View Cafe embraces the Kindle (kindleville.blogspot.com)
• Evidence points against online news pay walls (billbennett.co.nz)
• Amazon Kindle, first impressions (mathewpacker.com)

Related posts:

1. Amazon, Kindle, and the Apple Tablet
2. Shaping the Future of the Newspaper
3. My first week with a Kindle DX

“What we need is journalism”

I don’t usually simply link out to other blog posts, but in this case I feel compelled to link to Clay Shirky‘s extremely perceptive post entitled Newspapers and Thinking the Unthinkable.

He manages to post very well thought out explorations of unresolved questions and issues presented by the impact of the internet on old industries and models. If you haven’t seen his writing on micro-payments, it’s worth Googling.

Go read it for more choice quotes like this – “The expense of printing created an environment where Wal-Mart was willing to subsidize the Baghdad bureau.”

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