Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Seriously? Ads?

blog.dinkevich.com

Post reply on HN
Print view View original

211–220 of 229 posts

Re: Seriously? Ads?

#211

Post by stickfigure »

InclinedPlane wrote: post #210
stickfigure wrote: post #185

Earlier quoted context omitted.

Facebook's potential advantage in this space is not that they have a billion users, it's that they arbitrate the identity of those users. And payment is inexorably linked with identity, especially WRT avoiding fraud. Certainly it is a difficult market to enter, but a few billion dollars can buy you a lot of expertise, relationships, and time to build experience. The reason Facebook should go into transactions is the…

The problem is that it isn't where the money is, not much more money than Facebook is already making anyway. Not unless facebook intends to commit theft. The money today is in selling digital goods which have a near zero transactional cost. Music, movies, games, books, etc. Not that it makes sense for facebook to get into that business either, necessarily.

I don't have the statistics in my hands, but I'm willing to bet that the transaction volume of nondigital goods is at least two orders of magnitude larger than the transaction volume of digital goods. A 1% cut of tens of trillions of dollars worldwide is worth quite a lot more than 30% of a few billions.

Granted, a worldwide payment scheme is a Very Hard Problem To Solve for many nontechnical reasons... but this is exactly the kind of problem that large, ambitious companies with lots of street cred should try to attack. If it was easy, everyone would be doing it.

Re: Seriously? Ads?

#212

Post by pessimizer »

sanswork wrote: post #107
pessimizer wrote: post #86

Earlier quoted context omitted.

Most people don't click on ads, but the minority that do can generate billions of dollars of revenue. The minority that do follow the ones that don't.

A recent report showed that the minority that click ads at facebook is pretty close to half. Not a bad minority to have using your site.

If you're talking about the report that batista referenced - I haven't seen it. 50% never clicking on an ad even once suggests that ad clickers are still a pretty extreme minority.

I'm pretty sure that I could have been counted as a clicker in that study - I'm sure I accidentally clicked on an ad at least once when I was on facebook.

Re: Seriously? Ads?

#213

Post by snowwrestler »

digitalsushi wrote: post #125
snowwrestler wrote: post #100

Earlier quoted context omitted.

Micropayments haven't taken off because people don't want to pay 3 to 5 cents for anything. The perception of value is so low that even a one-button form is too much friction in the user experience. If your article is only worth 3 cents, just show it to me for free and put an ad on the page.

If the transaction processing costs were 0, do you suppose this payment system would still continue to not exist?

I do. I believe the fundamental issue is one of user experience. I think if you force the user to make an affirmative decision to pay every time they want to read an article, a huge number will not bother, even if the cost is negligible. Especially since there will probably be 5 other news sources who are "summarizing" the same content for free, with ads.

Re: Seriously? Ads?

#214

Post by otterley »

Omnipresent wrote: post #44
jiggy2011 wrote: post #21

Are online payments such a big unsolved problem? It takes me all of 10 seconds to type my CC number and associated security codes. Sites that I use a lot tend to allow subsequent purchases without re-entering them anyway. If everyone's facebook account has CC details attached and a 1 click "pay now" button you are only 1 XSS vulnerability from fraud on an unprecedented scale.

I don't want to waste those 10 seconds which feel like eternity trying to fill all the fields. That's why amazons "1 click" checkout button is so successful. Make me, the user, do as less work as possible.

Have you tried 1Password? Its automatic form filler usually works quite well.

Re: Seriously? Ads?

#215

Post by snowwrestler »

drivebyacct2 wrote: post #197
Splines wrote: post #148

Earlier quoted context omitted.

There are very few things that are worth 5 cents that you'd get me to pay for that I couldn't just do without.

That wasn't the question; what percentage of the economy is from purchases that fall into the category of "I could do without"? The question is, the NYTimes article linked on HN with 120 comments... would you pay 5cents to read it?

The decision to buy can definitely be irrational, but that can cut both ways. Buyers might decide against purchasing even when the product is clearly affordable.

Consider the Facebook social reader apps like the Washington Post. If you click through from your Facebook news feed, you need to authorize the app to read the article. It's a one-button form, it's totally free, and you could revoke the app whenever you want. And yet, a huge percentage of people cancel out of it.

Would I pay 5 cents to read a NYTimes article from Hacker News? Maybe yes, maybe no, depends on the article. The point is that I would be forced into my "purchase mindset" every time.

Re: Seriously? Ads?

#216

Post by roc »

Splines wrote: post #151
roc wrote: post #13

Earlier quoted context omitted.

While I tend to agree, they could throw in an RSA fob or a smartphone-based two-factor equivalent. They probably should already.

I like two-factor authentication too, but casual users don't care about this sort of thing until it's too late.

There's a large and growing number of casual users who've dealt with or watched a friend or family member deal with fraudulent charges.

I think a sufficiently streamlined phone app and pitch could net quite a few. Say, demonstrating the feature by showing someone making an Amazon purchase and then getting a phone notification to approve the charge and approving with a simple PIN entry.[1]

[1] Said notification ideally showing merchant, amount, scan location, warnings if it's a card not present transaction, etc.

Re: Seriously? Ads?

#217

Post by InclinedPlane »

stickfigure wrote: post #211
InclinedPlane wrote: post #210

Earlier quoted context omitted.

The problem is that it isn't where the money is, not much more money than Facebook is already making anyway. Not unless facebook intends to commit theft. The money today is in selling digital goods which have a near zero transactional cost. Music, movies, games, books, etc. Not that it makes sense for facebook to get into that business either, necessarily.

I don't have the statistics in my hands, but I'm willing to bet that the transaction volume of nondigital goods is at least two orders of magnitude larger than the transaction volume of digital goods. A 1% cut of tens of trillions of dollars worldwide is worth quite a lot more than 30% of a few billions. Granted, a worldwide payment scheme is a Very Hard Problem To Solve for many nontechnical reasons... but this is e…

Real world examples don't bear those numbers out. Look at Visa. 2 billion cardholders, $4 trillion in transactions a year, 80 billion transactions a year. And their revenue is only about twice Facebook's. Unless facebook becomes a merchant bank and convinces millions of merchants to use them they aren't going to see much higher of a per transaction profit margin. The math just doesn't add up.

Re: Seriously? Ads?

#218

Post by stickfigure »

InclinedPlane wrote: post #217
stickfigure wrote: post #211

Earlier quoted context omitted.

I don't have the statistics in my hands, but I'm willing to bet that the transaction volume of nondigital goods is at least two orders of magnitude larger than the transaction volume of digital goods. A 1% cut of tens of trillions of dollars worldwide is worth quite a lot more than 30% of a few billions. Granted, a worldwide payment scheme is a Very Hard Problem To Solve for many nontechnical reasons... but this is e…

Real world examples don't bear those numbers out. Look at Visa. 2 billion cardholders, $4 trillion in transactions a year, 80 billion transactions a year. And their revenue is only about twice Facebook's. Unless facebook becomes a merchant bank and convinces millions of merchants to use them they aren't going to see much higher of a per transaction profit margin. The math just doesn't add up.

If the business proposition was simply "make another Visa" then sure, the proposition would be uninteresting.

On the other hand, 2-3% of that $4 trillion is being consumed by the payment processing chain. Only a portion of it goes to Visa; the rest presumably go to banks and other layers of the service. Facebook potentially could, by virtue of being a trusted holder of identity worldwide, subsume all layers of this chain.

Look at it from this perspective: It currently "costs" 2-3% of a transaction to make a CC purchase. That's a huge dead weight loss. Is Facebook capable of using its brand, reach, and identity database to create a more efficient system?

Re: Seriously? Ads?

#219

Post by InclinedPlane »

stickfigure wrote: post #218
InclinedPlane wrote: post #217

Earlier quoted context omitted.

Real world examples don't bear those numbers out. Look at Visa. 2 billion cardholders, $4 trillion in transactions a year, 80 billion transactions a year. And their revenue is only about twice Facebook's. Unless facebook becomes a merchant bank and convinces millions of merchants to use them they aren't going to see much higher of a per transaction profit margin. The math just doesn't add up.

If the business proposition was simply "make another Visa" then sure, the proposition would be uninteresting. On the other hand, 2-3% of that $4 trillion is being consumed by the payment processing chain. Only a portion of it goes to Visa; the rest presumably go to banks and other layers of the service. Facebook potentially could, by virtue of being a trusted holder of identity worldwide, subsume all layers of this c…

2-3% isn't a dead weight loss, it's paying for very valuable things, especially fraud protection. You can't just magic it away.

Also, as I said, if facebook wants to step into the payments middle man role (which they could) they could maybe make as much as Visa does. If they completely reinvented themselves and turned into a global merchant bank AND managed to convince at least a tenth of all merchant account holders on Earth to switch to them THEN they could make some serious money. But the likelihood of that is precisely zero plus or minus a teeny, tiny margin of error.

In answer to your last question: no, no they are not.

Re: Seriously? Ads?

#220

Post by dabent »

pg wrote: post #203

I'm surprised this got so many upvotes. Does the author really believe that Facebook hasn't thought about this? Or that the ways they make money now are the the only ways they ever will?

I wonder if votes are an expression of interest in the (payments) product.

That aside, I not only assumed Facebook had thought of the idea of payments, they might even be working on it. It seems like an extension of the "Like" button they already have on so many sites.

Certainly Facebook is certainly thinking about new ways to make money, but they did disclose that ads are a risk factor in their S-1, with special concern for increased mobile device use, where they don't currently display ads.

Post reply on HN