Jul 25

Written by: Audacious Inquiry Team
Friday, July 25, 2008 3:30 PM

While Americans bought almost $130 billion worth of goods and services from online retailers like Amazon, that figure still comprises only about four percent of the nation's retail sales. 

A number of innovators, however, are finding other compelling ways to monetize internet ventures, so Knowledge@Wharton reported from Supernova, an annual technology conference held in San Francisco and organized by the Wharton School. 

We were struck when reading about the presentations by Gaia and Adobe, who are, we think, pursuing long-term strategies similar to those we've recommended for a number of client projects:

At Gaia Online, more than 300,000 users participate each day in massively multiplayer role-playing games, creating their own avatars and interacting within the virtual world of Gaia. They pay nothing to participate, but buy nearly $1 million a month in virtual goods. Adobe, a long-time leader in software and technologies that allow content to be displayed on a variety of digital devices, just introduced Photoshop Express, an online tool for uploading, sorting and editing digital photos as well as sending them to friends or embedding them on blogs. The price? Zero. The potential payoff? A mass of first-time Adobe users, a percentage of whom will decide to buy other Adobe software or services. As with these examples, the most effective online business models "tend to be longer-term, more about developing a two-way relationship than a single transaction," said Clemons. "They provide high information content, and seek to alter the user's perceptions."

Click here to read the full report.

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