Kripy

Facebook Is Toast

Michael Wolff, on Technology Review:

In its Herculean efforts to maintain its overall growth, Facebook will continue to lower its per-user revenues, which, given its vast inventory, will force the rest of the ad-driven Web to lower its costs. The low-level panic the owners of every mass-traffic website feel about the ever-downward movement of the cost of a thousand ad impressions (or CPM) is turning to dread, as some big sites observed as much as a 25 percent decrease in the last quarter, following Facebook's own attempt to book more revenue.

You see where this is going. As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook - that putative transformer of worlds, which is, in reality, only an ad-driven site - will fall with everybody else.

Paywalls, and site subscriptions, are increasingly looking like a more sustainable option for generating revenue on the web.