For example, estate agents (realtors?) really serve 2 people - sellers, and buyers. They give their services for free to one party (buyers), and charge the other. They're pretty similar to ad supported websites.
Employment agencies commonly do a lot of work to get you a job, whilst charging you nothing in return. They instead charge the company that hires you.
Free papers are routinely given away, and instead make money from advertising. TV stations the same.
Banking is also free for individual customers (in the UK), and the banks make that money back on average, from business accounts and overdrafts etc.
Credit cards are another example. Usually free to consumers (If you pay balance in full), and the seller pays the fees. Of course they also make money if customers don't pay the balance off.
Receiving telephone calls, SMS etc is also completely free most of the time (The sender pays). [At least in UK]
There are countless other examples of real world profitable big businesses that give stuff away to customers for free.
Trying to pretend that every business on the planet, and the only types of viable businesses are ones that charge customers money directly, is plain silly.
We get that you hate/don't understand/have had bad luck with advertising in the past, but that doesn't mean it's not viable and very lucrative if done properly.
I don't think he said anything about absolutely needing to charge customers directly?
"They make a product or offer a service and their customers pay them for it."
In all your scenarios, there is an entity that is paying the company for a product or service rendered. They may not be a simple definition of the word "customer" but they are a customer none-the-less.
I think the issue is more about smart business. No one is going to knock ning (and there would be no reason for their new strategy) if they figured out how to make money on their freemium model. But they didn't! And that's not good business.
Obligatory google example: It's free. Yay, search all you want. Google's customers are the advertisers that pay for ad positioning. Yes the users are the customers too, but that does not mean that the advertisers aren't.
The issue with ning was they took a stupid amount of investment IMHO. If they hadn't they'd be profitable.
'Ad revenue' > 'Cost of serving a few dumb HTTP requests' => profit.
That equation is simple, and holds pretty well. If you're spending more money serving HTTP requests than you can make from advertising, you're doing it wrong.
For example, estate agents (realtors?) really serve 2 people - sellers, and buyers. They give their services for free to one party (buyers), and charge the other. They're pretty similar to ad supported websites.
Employment agencies commonly do a lot of work to get you a job, whilst charging you nothing in return. They instead charge the company that hires you.
Free papers are routinely given away, and instead make money from advertising. TV stations the same.
Banking is also free for individual customers (in the UK), and the banks make that money back on average, from business accounts and overdrafts etc.
Credit cards are another example. Usually free to consumers (If you pay balance in full), and the seller pays the fees. Of course they also make money if customers don't pay the balance off.
Receiving telephone calls, SMS etc is also completely free most of the time (The sender pays). [At least in UK]
There are countless other examples of real world profitable big businesses that give stuff away to customers for free.
Trying to pretend that every business on the planet, and the only types of viable businesses are ones that charge customers money directly, is plain silly.
We get that you hate/don't understand/have had bad luck with advertising in the past, but that doesn't mean it's not viable and very lucrative if done properly.