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Comment by pyvpx | Hacker News Reader

you are an extreme minority, statistically and financially.

Why? Paying for the products you used was the dominant way of doing business for the last 5000 - 15 years of human history.

Fortunately for businesses that existed those last 5000 - 15 years, copying a document wasn't free. Information couldn't be mass produced at a scale that renders the notion of supply meaningless.

Businesses now have to compete with open source or decentralized services that cut them out. When money enters the equation, people immediately start shopping, they start asking "Is this an expense that is necessary?"

That plus the amount of uncertainty john q public has on transmitting money online (a reticence I share to be honest), makes paying small fees a large barrier to entry.

Besides, if I've learned anything, I've learned that just because you paid a company money, doesn't mean they won't turn around and sell you up the river. The barriers of trust for a service that's free and non-free are exactly the same.

> Fortunately for businesses that existed those last 5000 - 15 years, copying a document wasn't free. Information couldn't be mass produced at a scale that renders the notion of supply meaningless.

Google and Facebook are not in the document copying business. They index, curate, store and generally make information easy to access. That's a real service which costs real money to offer, and is not going to be just spontaneously overtaken by some FOSS equivalent (whatever that even means). And they could charge real money for it, if they wanted. Personally I would welcome that opportunity if it meant they would treat me more like a customer and less like an ad demographic.

There are distributed social networking systems that have being experimented with. HN has stories showing off a few of them. Facebook has real competition from people who don't have data aggregation or advertisement agendas.

Barriers to entry for these tools are: the technical expertise to setup and run the programs (which is low low low, but still enough), and the obvious lack of users to give the system meaning.

I don't think copying documents is a good comparison, because on the scale of FB/Twitter, the cost of transmitting status messages and photos is certainly not 0 :) You can't get around bandwidth bills by using open source software.

Sorry. I realize the example was symplistic, I was trying to illustrate the way computers have changed and undermined an old information economy. I didn't mean to imply it was the only way it changed that information economy.

You can get around bandwidth bills through distribution. open source is very good at that.

> Paying for the products you used was the dominant way of doing business for the last 5000 - 15 years of human history.

Was? It still is. The number of companies that rely solely or primarily on advertising to generate revenue is pretty small compared to those that charge their customers.

I'm actually curious if you have any sources or statistics to back this up. I'm not saying it's wrong, but I'd love to see some data on this.

I suspect you're almost surely right when it comes to the number of companies, but I'd be far more interested in seeing analysis on this broken down by volume of dollars / revenue.

For instance, most (all?) professional and even college sports, TV shows, numerous web companies, etc. -- tons of ad revenue, though perhaps relatively small number of companies, but is why I'd be curious to see data on this if you know of any?

> I'd be far more interested in seeing analysis on this broken down by volume of dollars / revenue.

We don't really need to filter companies that are solely or primarily dependent on advertising. We can compare the entire amount of money spent on advertising (which is a superset of what we're really looking for) versus everybody else (which is just total revenue minus advertising revenue) to see it's not even close.

One source[1] for global ad spending puts it at $467 billion (for 2010), I couldn't find more recent hard data but another[2] estimates it at $581 billion for this year. Let's assume the estimate was right and round up to $600 billion.

WalMart had revenue of $476.3 billion last year[3]. You can combine WalMart and any other company in the top 10 of Fortune's Global 500 and their combined revenue would exceed total advertising revenue[4]. The combined revenue of all 500 is $31.1 trillion[5], even if that included every penny of ad revenue it would still be a ratio of 50:1

[1] http://www.wpp.com/wpp/press/2011/dec/05/groupm-forecasts-gl...

[2] http://www.statista.com/statistics/237797/total-global-adver...

[3] https://en.wikipedia.org/wiki/Walmart

[4] https://en.wikipedia.org/wiki/Fortune_Global_500

[5] http://fortune.com/global500/wal-mart-stores-1/

Advertising dollars have to be less than what a company makes on the product advertised (at least over the long term, but probably in the short term as well). As such, it would be wholly unsustainable for advertising to be the dominant mechanism of revenue generation globally, since that would imply that companies are spending more on advertising than they could possibly receive from selling their goods and services.

Maybe I'm misunderstanding...perhaps you were referring only to businesses selling access to a web service?

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