Is It PC To Call It Tribble Traffic?

"More and more Web 2.0 start-ups are running into a surprising problem: too many customers." So starts an article in last Friday's San Jose Mercury News. The article goes on to focus on the problem of sites that are popular with people in countries advertisers are not interested in. Their traffic clogs the site and thus adds costs. It is also discounted when valuing the company because advertisers want to pay only for desirable segments.

These companies do not like to talk about this problem. As the article asks, "who wants to suggest some users are less valuable than others--even though it may be true?" It seems it is not politically correct to call undesirable web traffic Tribble Traffic. Tribble Traffic is web traffic that grows like crazy and consumes huge amounts of infrastructure resources, but is maddeningly hard to monetize.

When the entrepreneurs who build these companies finally figure out how to monetize their ideas, they discover that they can build a viable business model around only a subset of their users. The problem is that they cannot segment the valued traffic without alienating most all of their users. They similarly cannot capture enough demographic information to segment their traffic for advertisers without user rebellion. The Tribble Traffic is increasingly costly to serve due to diseconomies of scale.

The web places no physical barriers to who comes into your store. You are open to the world. Worse, one man's tribble is another man's target customer. In dealing with this and being shy about discussing it, the online industry shows its immaturity.

Copyright © 2007 Philip Bookman

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