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Thursday, November 17, 2005

Why Ad-Supported Business Software Won't Work

I think the hand-wringing over software companies searching for new business models is a bit over the top. Sure, we'll continue to see application that can be run as a hosted service continue to move online and proliferate.

But... business software supported by advertising? Not gonna happen!

Microsoft, in its typically greedy fashion, seems to be trying to find every way possible to get ads in your face, now that they've caught the pay-per-click advertising bug. I think this will inevitably turn out to be another case of vaporware or a scare tactic against competitors, and here's why.

Business applications are designed for specific business purposes that require concentration. And business managers tend to want their employees to focus on the task at hand. Advertising, when not in a helpful pull mode, is disruptive.

Pay-per-click -- and even content-targeting -- ads work because the user initiated the action that led to the ad being placed in front of his eyeballs. Those pesky text ads might be just what the user was looking for.

But if you 're working on a spreadsheet of your company's financials, the last thing you need to see is an ad for a CPA that will launch a web browser and take you away from your task. It's just distracting. If you are looking for help with a spreadsheet, you'll search the web, right?

So, it's a neat idea, but the idea of ad-supported business software is a non-starter.

But, I could easily see certain consumer applications, such as photo-editing software, being ad supported. What apps could you see thriving on this model?

Posted by Cory Kleinschmidt




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