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Take another look at the viability of micropayments. 3/14 Web Dev Weekly hed: Surviving the Internet dek: Take another look at the viability of micropayments. by Garth

“They stopped trading Yahoo!” a colleague informed me last week. At the time, I had thought some larger company had finally acquired the portal and they were waiting to announce the deal. Instead, Yahoo!’s CEO stepped down in order to bring in someone with fresh ideas as to how Yahoo! can turn itself around. It seems that the premise of a ton of users viewing a ton of ads, thus generating revenue, was no longer a viable revenue model. It is 2001, nearly a year after the New Economy began its slide and even the giants are wondering where to find food.

Somewhere along the way Yahoo! ceased being a search engine and became a portal. True, you still went there to search for stuff, but you could also go to Yahoo! to check your e-mail, stocks, and even catch the news. Yahoo! had it all, but as we see now in 20-20 hindsight, it was not enough. Without other dot-com’s to buy the advertising, the revenue stream dried up.

The Internet advertising-based revenue model has been shaky for quite some time. With the exception of the large content sites, breaking even on advertising revenue is not easy, as summed up nicely in a recent CU article by Maggie Biggs.

While more targeted advertising, as proposed by Maggie, may indeed have a place in future revenue models, the tools to measure these campaign’s performances will be expensive and difficult to use. Most salespeople can’t get through a simple Web Trends report. The granular reporting of these campaigns will require a redoubling of effort in order to extract meaningful data. Even the ideal example scenario–delivering a banner ad for a new car to a visitor who is looking for a car–does not guarantee a click, or even a glance. Most Web users today are accustomed to completely ignoring banner ads.

Enter the age of micropayments.

I see a day, not too far off, in which Web users will have secure wallets attached to their browsers. Content sites charging $.01 to $.05 per page will begin to generate a steady revenue stream. Reliable and secure wallets will also resuscitate the sagging Web retail sector, as the current barriers to secure shopping will have been resolved. Finally, micropayments will help to develop the arena of local and regional Web sites. In the past these types of sites have been difficult to maintain due to relatively low traffic numbers. Micropayments will alleviate some of the revenue problems and allow the development of a truly personalized local site, where every server knows your name.

What do you think about paying for your Internet content above the cost of your Internet connection? Let me know at the e-mail address below.

Garth Gillespie is architect and chief technologist of ComputerUser.com.

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