In the Name of Efficiency

A NYT blog reported yesterday on Bebo’s, a popular British social network, decision to relinquish claim on advertsing revenue from ads embedded on its users videos.

Users can now post videos online with advertisement and stay with all the revenue. Now this would seem counterintuitive but the truth is that the reasoning behind it is very logical, unlike so many other money making schemes on the internet.

Ziv Navoth, vice president of marketing for Bebo, told the NYT the reason for the move was speed. I call it efficiency.

It is nice to think that someone is actually sitting down and thinking about whether their money making scheme works. Bebo discovered that they lose a lot of time negotiating deals and that it just isn’t working.

If you are not making money on something let someone else, who thinks they can make money, do the work.

Now this is were I got confused. Bebo will still be making money from ads placed on their pages. Ok that makes sense. But then it will also sell ads in the name of video producers and get a percentage.

At this point their new scheme seems a little convoluted. Is this their way of legalizing their share of ad revenues? They will still have to go through negotiations, which they claimed was what caused them to lose time (read: money), but will now have to do less of them. Maybe? If they have found the perfect number of deals they can make without lossing efficiency. Then the plan is excellent. If not then they are back to square one.

In conclusion it seems that Bebo is just turning freer, everyone is free to do whatever they want, including paying them to do the work.