Has there ever been an Internet buzzword that has been more abused and confused than community?
Remember back in the naive ’90s, when theglobe.com’s stock rose 606 percent on its first day of trading-an IPO record at the time-because it supposedly was the hot place to chat? Or how about GeoCities, which offered free “homesteads” in online subdivisions, complete with street addresses, as if the first thing you’d do after creating your free homepage would be to hop over to the neighbors’ for a cup of digital coffee.
In a $4 billion deal, Yahoo!! paid more than $100 for every piddling dollar of revenue that GeoCities had from its inception in 1996 through the spring of 1999. But does anyone believe these “communities” would fetch any premium today?
Yet there really is something quite powerful and valuable behind the concept of online community, provided it is used to support a real business objective.
Mistakes were made
The mistake such startups made was in believing that community was a business model unto itself. Interactive tools that allow people with common interests to exchange information work as a revenue opportunity only when they are attached to an established business model. When that’s the case, communities can help a real business acquire and retain customers at a lower cost for a longer time.