Online Hybrid Business Models Succeed

I mentioned in yesterday’s post that teens appearing to be tiring of pure social networking sites. This new trend has led a few savvy entrepreneurs to figure out how to benefit from Facebook exhaustion. Consumers who want to move past the novelty of social networking are being offered new and rewarding ways to enjoy their online experience.

The latest online business models combine a number of activities and are generating buzz from both users and investors.   For the most part, these businesses reward consumers for watching videos (ads) with discounts or coupons. These sites may also include games, editorial content, purchase opportunities and plenty of encouragement to get users to sign up their friends.
Writing for the Wall Street Journal, Geoffrey Fowler and Jessica Vascellaro outline how these sites, think Lockerz and Groupon, overlap the traditional space between media and e‑commerce. The content on these sites is similar to the information that consumers might have once accessed via a fashion magazine. The retail component is similar to what users might find on a store website. These new businesses are combining that content and online shopping experience along with a chance to earn discounts and to be entertained. Often traditional media companies and retailers are joining forces to launch these new businesses.

Fowler and Vascellaro say, “[m]edia companies are embracing e‑commerce as a supplement to online advertising, whose growth has slowed and which is being spread across a widening number of sites.” As technology continues to make new business models viable, venture capital and media companies are investing in these opportunities. Over 16 million users have registered with Lockerz. These consumers appear eager to earn discounts on items they can purchase at the site. Nobody knows whether consumers will want to continue to participate in the advertising process but, for now, operators like Groupon “seek to replace a local advertising market once dominated by city magazines.”
[Source: Media and Retail Firms Meld Business Models Online. Fowler, Geoffrey, A. and Vascellaro, Jessica, E. Wall Street Journal. 6 Jul. 2010. Web. 23 Jul. 2010] 

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.