Revenue Model for Online Communities – #1

I’ve just been reading (again) James Old (Pricewaterhouse Coopers) presentation (from 2001) regarding how to make money outta Online Communties. I’ve split the blog report into bits to make it more manageable and bloggy-like. These are the points raised.

1. What is the relationship between community and revenue?

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  At its heart, the term ‘community’ implies a sense of belonging among members.

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  If people belong to something then we can derive value from them.

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  Community is one of the critical concepts underpinning Internet related value creation and business models. Yahoo’s purchase of Geocities for $46m and Lycos’ purchase of Tripod for $58m were both predicated largely on the value of community. (heh, this was written in 2001 – think of the circulation-hungry Google et al bidding on AoL today)

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  However, there is a very large distinction between VALUE and REVENUE.

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  Value consists of all the BENEFITS of an online community.

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  Revenue consists simply of the MONETARY INCOME that the community generates.

Ok, I understand so far. Everyone can see that hordes of people gathering online has potential and are wondering how to profit from it. Got it.