Famous Last Words : Getting PaidMay 2012 By Denny Hatch
Jay Leno once described his personal business model in six words: "Write joke. Tell joke. Get check."
The two key words: "Get check."
When Peggy and I ran the WHO'S MAILING WHAT! newsletter and archive service, we had a paid circulation, plus paid services such as consulting, selling folding dummies of successful direct mail packages, as well as ancillary income from books—The Directory of Major Mailers (still being published 25 years later) and Who's Charging What (a directory of freelancers and what they charge). A teeny extra bit of income came from occasional ads in the newsletter.
Our business model was a variation of Jay Leno's.
When Target Marketing bought our little business and we moved to Philadelphia, the corporate business model was basically advertising- driven. Trade magazines were published and sent to qualified readers whom advertisers wanted to reach, and so paid for ads to reach them.
I was never really comfortable with this system. If a trade magazine is covering an industry that hits a rough patch, the first thing that is cut back is advertising and you are hurt. This is despite the fact that you are cranking out content for readers to help them prosper in an economic downturn.
In other words, you have no control of your business. Your advertisers have tough times and you go broke, even though your readers need you.
About six years ago, I dropped AOL for Yahoo! AOL used to hit my credit card automatically for $23.90 a month ($286.80 per year) for its services.
In the past seven years, I have never paid Yahoo! a nickel. I not only get elegant email capabilities, but all 17,708 emails that I have sent since Nov. 12, 2005 are archived—all in a searchable database.
I should be paying Yahoo! for this service, and I frankly do not understand the business model.
Nor, it seems, does Yahoo! With revenue down, CEO Carol Bartz was canned for poor stock performance in late 2011. CFO Tim Morse took over as temporary CEO, only to be replaced by PayPal's Scott Thompson. And to top it all off, former CEO and co-founder Jerry Yang resigned in January 2012. That's four CEOs in five years. And the latest one, Thompson, wants to rejigger the business model. In the words of The Wall Street Journal's Amir Efrati, Scott Thompson, who "has no online-ad experience, faces an enormous task in trying to make Yahoo! relevant again." The New York Times said that the feebleness of the board of directors "is about to leave Yahoo to the wolves."