Financial Online Community brought to you by WSJ blog

Written by on October 29th, 2008
If a Facebook user is valued at $400 what would a WSJ online user be valued at?

With the announcement that second quarter print advertising revenue has dropped again, it’s good to see newspapers reaching out to embrace social media in an attempt to figure out how to monetize their online communities.

I like to remind those in traditional media industries that by developing an online community, they are in effect developing a new media franchise. Think about it. When Facebook received the $265 million dollars Wall streeet journalinvestment from Microsoft for .6 percent of the company, the value per user of the 60 million users (now over 100 million) was nearly $400 per user. That’s far below the value of a newspaper or cable subscriber, but it provides a benchmark for any organization interesting in creating an online community.

It appears that the Wall Street Journal is now starting to understand their Internet strategy could result in a whole new business unit with significant value. They recently upgraded their website and adopted some of the more successful interactive and engaging tools and services that other sites have been using for years to not only attract new users, gain data and information about them, but to keep the coming back.

The WSJ has added

  1. Discussion areas for each article
  2. Profiles individuals can use to brand themselves
  3. Tools to ask questions and answer questions that will lift the users social authority
  4. They even give subscribers the ability to email each other    

Perhaps they’ve watched the growing success of Linkedin.com that is growing by 1,000,000 users a month, with an average age of 41 and income of $104,000 and realized they could be networking and engaging their 1,000,000 members around the content they are developing. It’s a business strategy that if successful could make the content of secondary value to the community.

If the Facebook model worked here and 500,000 of their current subscribers and 500,000 new subscribers created profile pages the 1,000,000 online community members will have created a new media worth millions of dollars.

Exclusive or Open Community?

There are a hundred questions you need to ask yourself when you are creating an online community. One of which is, do we make it password protected and exclusive to only certain people or do we provide an open community, where anybody can participate?

An open community tends to attract more users that in most cases participate less frequently. A closed community could has the potential of encouraging niche interest groups to discuss and share information.

The WSJ decided to limit their community services to paid members only. The company wants to control who has access to these areas to known subscribers and they are hoping this will prevent irrelevant or spam type comments, thereby providing more sustenance to users.

To do this individuals commenting will be identified whether they like it or not. There are cases where someone could make a relevant comment or suggestion but they would prefer to be anonymous. It might be a comment by someone that works for the company or an investor. Public companies may prevent employees from making comments due to legal responsibilities, thus inhibiting open and free communication.

At any rate Kudo’s to the WSJ who may be coming to the party late, but none the less they are now exploring how to listen to and engage their customers.  It’s a whole new world for them.

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