I'm trying to wrap my head around the negative price distinction. A business can't be viable if the cost of user acquisition is lower than the lifetime value of a user.

Most software spend money on advertising, then they have to make that money back somehow. In a direct business model, they'll charge the users of the software directly. In an indirect business model, they'll charge a third party for access to the users or an asset that the user has. Facebook is more of an indirect business model, where they charge advertisers for access to the users' attention and data.

In my mind, the above is totally fine. I choose to pay with my attention and data as a user, and know that it will be sold to advertisers. Viewing this as "negatively priced" feels like a convoluted way to understand the business model however.

Some malware makes money by trying to hide the secondary market they're selling. For instance, by sneaking in a default browser search that sells your attention to advertisers, or selling your computers idle time to a botnet without your permission. This is egregious in my opinion, but it's not the indirect business model that is bad here, it's the hidden costs that they lie about or obfuscate.

Jimrandomh's Shortform

by jimrandomh 1 min read4th Jul 201964 comments

This post is a container for my short-form writing. See this post for meta-level discussion about shortform as an upcoming site feature.