Alec Saunders broke news about JAJAH partnering with European social networking sites that will feature the JAJAH service. In exchange for the service, JAJAH will recieve a revenue share with the social networking sites. As Alec points out, the ad funded model was bound to come around sometime, but will it work? Or better yet, has it ever worked for telephony services?
The problem with the ad funded model is that advertising, especially CPM advertising, is inherently annoying. People inherently hate to be annoyed. So if advertising is annoying, and people hate to be annoyed, people hate advertising, right?
Yes, and people would rather pay, then be annoyed (think of how much you pay everyday not to be annoyed). Even worse, this annoyance could lead to a less then pleasant user experience, which could degrade the value of the service in the eyes of many users. On a positive note, the ad funded model could act as a gateway for Jah-Jah to get more people to use a paid ad-free service a la NetZero.
JAJAH is an excellent service. I think it has a ton of potential, but I am not sure the ad funded model, especially one that also relies on the performance and abilities of a partner to bring in potential advertisers, is a model I would invest in.