Monetizing Meneame... tell the users and sell the software!! (ok and some online ads as well)

Many of you might have visited www.meneame.net before or www.digg.com, or maybe you have seen the little elephant in the bottom of some news pages such as www.elcomercio.com or www.elpais.com  . Both Digg and Meneame bring enormous quantities of traffic to their sites as people go there to check the latest “news” or just plain interesting articles on the web as voted by other internauts (people that browse the internet)

So why am I talking about these pages? … first because one of the assignments for my “Web 2.0 and Customer Driven Innovation” is to talk about how could we come up with a business model that will make the page owners some money, so yes…I am obliged to do it because it is mandatory for my class, but I have decided to post it in my blog because I believe the meneame case represents a problem that many other Internet Portals are having nowadays…lots of traffic, lots of popularity but little money. Some examples of this are twitter, diigo and would even go out and say Facebook (For the amount of active users they have, they should be swimming in money) 

So let’s talk about meneame, just for you to know, this was a page that was developed by Ricardo Galli because he wanted to practice his programming skills. He did most of it in 10 days and the purpose of the page is to allow registered users to find interesting news or articles in the internet and publish the title of the story with some comments in the meneame page. Once the story is in the meneame page, other meneame users (you don’t need to be registered to do this) can vote for their favorite stories, the more votes a story gets the closer it gets to the homepage and to the top. The more votes a story gets, the more “Karma” (yes…that is how they call it!) the person that published the story gets…becoming a more respected “meneador” (This word…I did made up).

Today the page is getting around 200000 visits a day…however those impressive numbers are not translating into $$$$ for the founder. If you go to the page you will see that there are some Google advertisements (Using Adsense- Refer to my previous post about Adsense), so some of you might be thinking why a page with such high traffic does not get advertisers directly instead of doing it through Google, well it is because it is hard for a brand to say yes…I want to advertise and then having stories about sex, violence or complaints in the page (remember the users are the ones who vote what news go on the page and that cannot and should not be controlled) and potentially associating the brand to those stories. 

So how do we make this page profitable?? First there needs to be a focus on CPM and not CPC. (For those of you who don’t know CPM is what online advertisers call Cost per Impression, meaning how much does the page charge for just exposing the brand in the page, While CPC means how much does the page charge per click each user makes on the advertisement- Cost per Click). Why CPM? Because the user does not spend much time in the page, it just uses the page to find interesting links…and then go to the page that hosts the story, making it very difficult to have people enough time to read the advertisement and then click on an interesting one. Meneame should focus on a brand that stays away from the mainstream and allows users to create or choose themselves, Linux pops to my mind, since it is a brand that is basically created and maintained by the users (just like meneame is) and since the users are choosing the stories in meneame I don’t think that Linux will have such an issue about being associated with what users voted on, since Linux always tries to position its brand exactly like that.

The next action meneame should take is tell the Meneadores the problem, tell all the users that meneame is not making money, communities are very strong for some brands and should not be underestimated, the only reason why Linux is alive today is because the Linux community has invested time and effort (Ok…IBM  has donated lots of money as well) to keep the brand alive, just think about all the donations that were given to Wikipedia(My friend Tamer made a very good comment about this, so please check the comments below). So meneame users should know that it takes money to develop and host the site that they use so much. Maybe a program in which users get more Karma if they get other people to donate money should be implemented, by doing so you meneame will stay true to the concept that users give the value to the page, it is just that the users will bring money instead of news.

My last suggestion has nothing to do with online marketing but more about selling the software (selling licenses or maybe provide the software as a service). More and more companies are beginning to use Web 2.0 tools to promote innovation, customer care or just stay ahead of its competition by pretending to be techie. Besides high web traffic, Meneame has another big asset, its software and experience managing the tool, this could be very useful for a corporation which wants to promote innovation by asking its employees worldwide to vote on interesting upcoming technologies that the corporation should look into (for example). By establishing a personalized “meneame” tool in the corporation’s intranet employees would be able to “publish” articles on specific topics or simply vote on what other peers have “published”, then the Karma that each employee has could be transmitted into…let’s say a bonus or some other incentive.

The concept can be applied to any industry (even in universities), and could be very useful for a company that wants to set up a process to hear what their employees are saying, both encouraging employee participation as well as potentially identifying trends or opportunities for the firm.