Subscriptions are the New Black

Subscriptions are the New Black
500hats.typepad.com

Advertising has always been a way to make otherwise losing propositions profitable, and as long as there are companies marketing products there will be advertising. It would be wasteful not to tap in to those dollars.

As Patio11 elsewhere already pointed out adsense is a form of micropayments, and micropayments are the 'pay-as-you-go' of subscriptions.

The only problem with that is that adsense is not transparent and it doesn't allow you to set your own price. In fact, you don't even know how much your inventory is really worth.

So if your site does not have a very tight coupling between the users and the sites, one that you expect to last for many months or years advertising is actually a very good solution, but adsense in particular may not be the best you can do.

Another problem with adsense is the fact that clickfraud benefits both google and the fraudsters, so for advertisers it is very difficult to track whether they're spending their money correctly or not.

I wished someone would start to give google some serious competition in this space.

However, the problem with a one-time payment is that the vendor loses incentive to continue supporting the buyer after the transaction. The primary way to generate additional revenues from that customer is, as you say "sell new innovations and features".

This adding of new features can increase complexity which eventually impacts the ease of use and increases the learning curve. These two side effects can have a negative impact on new user signups.

I'm optimistic of the web app user model after having developed desktop software for the past 10 years. Each version has to "work just like the previous, but better". You can only do that for so many versions :)