- You're conflating a medium (the web) with an action (selling). An excess of crappy websites do not compete with a subscription to Dropbox for example, and there are not hundreds of Basecamp alternatives. A more accurate phrasing for your analogy would be "... made it pointless to charge for access to higher quality webpages". And I would say that yes, there are few examples of pay-walled webpages being sustainable businesses.
- Placing ads is great, providing that a) you can accurately target competitor products and b) the sales you gain are greater than your per-user cost of acquisition. If you have experience of making this work in the mobile space it'd be great if you would share.
I'm just talking from my bingo experience, where I've been told many, many, many times that the instant I have free competition means my lunch gets eaten. (I have free competitors, and they're essentially outsourced customer acquisition that work for peanuts.)
I don't have any experience with mobile. Anecdotally, the CPM rates I've heard for mobile make customer acquisition seem prohibitively expensive for cheap apps, but an explosion of CPM inventory from a wave of free applications lacking in quality means that prices must come down eventually. Increase in supply tends to decrease prices, just like Demand Media exerts a downward influence on my CPAs (while shifting more of my spend away from quality sites and to Demand Media outlets).
- You're conflating a medium (the web) with an action (selling). An excess of crappy websites do not compete with a subscription to Dropbox for example, and there are not hundreds of Basecamp alternatives. A more accurate phrasing for your analogy would be "... made it pointless to charge for access to higher quality webpages". And I would say that yes, there are few examples of pay-walled webpages being sustainable businesses.
- Placing ads is great, providing that a) you can accurately target competitor products and b) the sales you gain are greater than your per-user cost of acquisition. If you have experience of making this work in the mobile space it'd be great if you would share.