Karela Fry

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Goody. A radical change in business models!

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Counting actual profit! What a rad new way of thinking! Tangential remarks from Business Week:

One of Demand [Media]’s primary selling points to investors is that in just a few years of existence it has already built a huge Web audience. Its prospectus promotes the fact that its sites attracted 105 million unique visitors in November 2010, according to ComScore (SCOR) data, making it the 17th-largest Web property in the U.S.

Raw traffic numbers tell only part of the story. Many analysts now say the best way to gauge a Web company’s financial hardiness is to look not at page views or monthly unique visitors but at how much money it can generate from each user. Matthew Shanahan, senior vice-president of strategy for Web consulting firm Scout Analytics, says thriving digital ventures typically have a high ARPU (average revenue per user). Amazon.com, for instance, makes on average $189 per unique user. Google takes in around $24. Web publishers, Shanahan says, tend to become reliably profitable at about $10 a user. Demand’s average revenue per user currently hovers around $1.60.

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Written by Arhopala Bazaloides

July 7, 2011 at 4:21 pm

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