Constant Sun

There has been a lot of buzz about kiko, a popular calendaring program selling their code on ebay. According to the winning bid they system was worth $258,100. What’s nice is they included their site stats on the ebay listing:

So they have about 2,500 page views a day with about 33% visitors that return every day.

Here is a glimpse of editthis.info’s stats (I just set up analytics last week):

So we have them beat on both page views, unique visitors, and % of returning visitors. Pretty sweet. Really it is not the code that makes the site though, it is the content.
This gets me to thinking, what is the value of a site? Is kiko worth what it fetched? Surely the program that they wrote was excellent, and I would guess that it would be worth the price if it adds that much value to the buyer’s organization. But then again, there are alternatives that are much cheaper.
I think the main problem with numsum, google spreadsheet, google calendar, and kiko is it is difficult to monitize them with ads. Really they are applications with sparse repetive content that would be hard to target with advertising. gmail ads work because your emails are meaninful and have keywords to latch onto. Editthis also does ok (has a little profit) only because the advertising can match the content. If the audience was larger it would be great (as anyone with a popular blog would know).
So if a web app isn’t going to be successful in advertising, should it sell services? If you get more than one company offering the same service, and their margin cost (the cost of adding each additional customer) is next to zero, then economic theory says eventually the price of the service will also be zero regardless of how much the initial investment is. If 3 or more players make a spreadsheet system then all three will have to charge zero unless there is some real advantage to using one over the other (some clever, hard to duplicate feature that consumers are willing to pay for).

So if it is free, they are still stuck with ads, and if they have no real content, then the ads are untargeted. This situation is similar to myspace. No real content, so the ads are stuck as being general interest stuff (big movies, dating sites, etc). This means that the revenue per page view (and each view costs money because of processor power and bandwidth) is way lower.

In the end, is content king? When it comes to general sites that don’t offer something that can’t be offered elsewhere, it is because in the end content is the only revenue stream.

When is content not king? When you can provide a service not offered elsewhere, or your service is hands down the best around. Photoshop was once just another image editor that according to the above theories should be sold for slightly above the price of a CD. It currently sells for over $500. The reason being… you won’t find a better photo editor.