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Delivering value instead of advertising - what a concept!

In a contrarian move, the family-focused Web hosting and social networking site Famster.com announced late last week it would dump advertising and move to a subscription-only business model. The move comes in response to “user feedback,” according to the press announcement.

“We find that families do not want to have their profiles cluttered with advertising,” says Famster CEO Wayne Naphtal.

Interestingly, Web businesses have yet to find whether families - or anyone else for that matter - want to pay for Web-based services, either.

Famster will continue to provide free accounts to current Famster members for “as long as these members wish to maintain their Famster accounts.” Effective immediately, all new members will pay $9.95 after a two-week free trial.

I've long been an advocate of asking consumers to pay for valuable services, so I should applaud Famster's decision to place a strong value on its business. Unfortunately, I don't think it's going to work. The problem here is twofold: First, too many other blog sites are happy to give away comparable services for less or no hard cost (to be clear, waiting for advertisements to load and giving them some mind is a form of payment). Second, Famster does a poor job of establishing a value proposition in the current iteration of its site.
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In the face of stiff competition, the second challenge is more daunting. Famster, or any other company choosing this path, must demonstrate the value for which they want to be paid. It's best to do that without asking for any commitment from the consumer. Let them see how others use the service. Let them try it for themselves. Show the customer all the ways your service is a bargain at $9.95 or whatever price you set.

Then, and only then, ask them for a credit card.

Never assume

Famster goes for the assumptive close. The messaging of the site is, effectively, “Trust us, you'll love us. And if you don't, that's okay, you can cancel at any time. Now, give us your credit card information.”

It feels like getting married on the first date with the assurance that you can always get divorced. Not many people are willing to do that, especially when they have the opportunity to date other, more forthcoming folks to figure out who they really want to spend their lives with.

Still, I applaud Famster's move. The site delivers a lot of value to families and close-knit groups that want to share information in private circles. I appreciate that the company listens to its customers and reacts to feedback, and I really do respect the business for asking customers to pay for the services they consume. But without a more inviting, value-demonstrating interface, I fear this site is dead in the water.

The good news is that they can fix this. I hope they do and it becomes a role model for user-paid Web services. The marketplace needs an alternative to advertising-supported Web businesses. Perhaps Famster can become that.

Recent articles by Chris Shipley

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Chris Shipley is the executive producer of NetworkWorld's DEMO Conferences, Editor of DEMO Letter, and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com.

Shipley has covered the personal technology business since 1984, and is regarded as one of the top analysts covering the technology industry today. She has worked as a writer and editor for a variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine, and Working Woman.

She has written two books on communications and Internet technology, she has won numerous awards for journalistic excellence, and was named the No. 1 newsletter editor by Marketing Computers two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.

This column was reprinted with permission of Network World, Inc. All registered trademarks are owned by IDG. More information can be found at http://www.idgef.com.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of the Wisconsin Technology Network, LLC.

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