Don Dodge on The Next Big Thing : I've got 400,000 users of my widget

Don Dodge on The Next Big Thing

I've got 400,000 users of my widget - Now what?

Whereivebeen Widgets are the coolest thing now. InsideFacebook has a story today about a guy who built a "Where I've Been" map widget that has attracted 400,000 Facebook users. Now he is struggling to pay for servers and bandwidth...with no revenue stream. he has basically built a free service layered on top of another free service, something I call The Remora Business Model. The remora is a type of fish that attaches itself to a larger fish like a shark or even a boat. It rides along with its host and feeds on whatever comes by. The remora can also detach from its host, swim on its own, and survive. Can widgets survive separate from their host?

What are widgets? I have several examples of widgets on my blog; things like Lijit (search), MyBlogLog (readers photos), Feedburner (subscriptions) , Sitemeter (traffic stats), and Criteo (blogroll). Other examples are things like stock tickers, news feeds, and of course, Google's AdSense widget which delivers ads to web sites and blogs.

MySpace and Facebook are huge social networking hosts that are attracting lots of widget builders. Some of the widgets are gaining hundreds of thousands of users. Great, but how do you convert those users to revenue? MySpace and Facebook will not allow the widget guys to put advertising in their widget. It is somewhat impractical anyway since widgets are typically small 2X2 applets with no room for an effective advertisement.

What is the business model for widgets? The Freemium model, upselling from free to premium services seems to be the best bet, at least for now. Many of the widgets provide a free service with options to buy premium services such as more detailed traffic statistics, more powerful services, enhanced customization, or higher levels of service.

What other business models make sense? If you can't do advertising, and you haven't figured out any premium services to upsell, what can you do? Clearspring takes a completely different approach. They are a widget network that allow content providers (video, image, text) to use the widget to distribute, control, and monetize their content. Clearspring makes money from content owners that want to use their widget, not end-users that want to play with it.

Do you have any other ideas on revenue models for widgets?

Filed under: Lijit

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Published Friday, June 22, 2007 12:59 PM by Don Dodge

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	amisare said: Accoding to Jeremy Liew of Lightspped Venture Partners in an interview with Inside FaceBook "The monetization path for widget companies is still evolving. The IAB is starting to address the issue of standards in widget advertising and social media advertising more broadly, and I think that this is one of the areas that will need to be resolved before we really see an explosion in widget advertising." See a "VC Perspectives on Facebook Platform: Lightspeed’s Jeremy Liew" at link: http://www.insidefacebook.com/2007/06/17/vc-perspectives-on-facebook-platform-lightspeeds-jeremy-liew/ See also Jeremy's blog "Social Media: Facebook commoditizing the social map" at lsvp webbolg http://lsvp.wordpress.com/2007/06/13/social-media-facebook-commoditizing-the-social-map/ "The first conference designed specifically for widget marketers" is to be held in NYC in 11 july 2007. Widgetcon 2007 was organised by Shervin Pishevar of Freemium. See link http://www.widgetcon.com/speakers.html June 23, 2007 5:29 AM
	amisare said: According to the author of an article “Myspace - the next Prodigy?” in New York Articles : “I’d estimate that over $250 million dollars has been invested in widget companies during the last 18 months. “ See http://nyarticles.com/?p=83 Surely no companies would spend such amount of money without seeing any monetizing potentials in widgets. June 25, 2007 9:35 AM
	amisare said: The proceedings of Widgetcon giving a good summary for the sessions are now available at Widgetcon Blog http://www.widgetcon.com/blog.htm July 12, 2007 8:14 AM

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About Don Dodge

I have been in the software business for more than 20 years. I started my software career with Digital Equipment Corp, aka DEC, in the database group. I worked with 5 software start-ups over the next 12 years. Forte Software was the first multiplatform object oriented development environment. AltaVista was the first search engine on the web. Napster was the first P2P file sharing network. Bowstreet was the first web services development environment. Groove Networks was the first secure P2P collaboration platform. Now I am at Microsoft...the biggest start-up in the world... working with VC's and start-ups in the greater Boston area. The goal is to help VC's and start-ups be successful with Microsoft, and together, provide great products for our customers.

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