Economics lesson on how the “fundamental law of supply and demand” makes Google the “ultimate money making machine,“ courtesy of Read/WriteWeb.
The lengthy presentation of the “fundamental law,” as translated by Alex Iskold, does not quite mesh with economic theory I was taught, at the New York University Stern Graduate School of Business Administration.
Paragraph after paragraph, reinforced by impressive charts and graphics, set-up for the forgone conclusion: “So one can't help but wonder: what model could possibly beat Google?…it is difficult to imagine what could possibly beat billions of links meeting millions of eyeballs daily.”
The back-up for the predictable assertion is not strong, however.
Case in point: “bounded online business” discussion of “a niche blog such as Read/WriteWeb.”
Our writers work around the clock to bring you fresh analysis posts about web technology, but the number of posts per day is limited - to say no more than ten. There is also a 'limited' amount of people that come to Read/WriteWeb.
Any blog has a maximum revenue that it can generate - dictated by the traffic and amount of advertising that it can present. So in terms of limitations on supply and demand, blogs are similar to mom and pop shops.
No, case in point, ZDNet which, like any blog or blog network, can grow exponentially, and with no finite bounds, by simply recruiting more bloggers, buying more servers, syndicating, etc.
There is also no preordained “’limited‘ amount of people that come to read” ZDNet and, subsequently, no theoretical limit on the amount of advertising that can be shown, and monetized.
paidContent, TechCrunch, GigaOm…are all growing according to diverse metrics and have therefore attracted investment interest to support and further develop their growth.
The Read/WriteWeb case also oddly posits that “despite Amazon's success, the very nature of its business model limits its potential revenue - because it is a web site,” though it also acknowledges that Google is indeed a Website, “one of the top three online destinations,” in fact.
Google proudly underscores that there is no obvious limit to growth in its monetization, but the leading money maker on the Web hardly represents the only “Website” to be able to scale profitably, and with no obvious ceiling.
Google has captured the brass ring online, but that doesn’t mean that Google will hold on to it indefinitely or that there are not more brass rings to be had.
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