The profit or income of the membership sites is the result of the use of resources called Intangible Assets. An emerging economic trend for business ownership shows that owning a tangible asset is less likely to provide as great a financial return as owning intangible assets.
The basis of the study provides a clear insight into the underlying reason why Google, as a company based on intangible assets, has surpassed Microsoft not only in profits, but also in web users. Marissa Mayer, director of consumer web products at Google, said that “Google’s goal is to organize information and make it universally accessible, and that goes well beyond search engines.”
Google has far exceeded its stated mission and, as a result, has eclipsed Microsoft’s efforts in its ability to benefit from the new economic model. Although Microsoft is a multibillion-dollar giant with its computer-based software products, licenses, and other tangible business ventures, the undisputed leader in the competition to earn revenue from intangible assets is Google.
Microsoft derived its fortune from creating the infrastructure for the dissemination of information. But Google eclipsed the success of Microsoft by focusing on an intangible asset, which is the realm of web content. Google’s ability to provide access to vast amounts of information to the consumer quickly and efficiently provided a clear competitive advantage over Microsoft.
The proof of success is always seen in the balance sheets of corporations. Considering that Google was incorporated as Google Inc. in 1998 in Menlo Park, California and Microsoft was incorporated in June 1991 in Bellevue, Washington, the competitive position of each corporation can be shown on their earnings reports.
In the first quarter of fiscal 2007, which ended on September 30, Microsoft, the software giant, generated $10.81 billion in total revenue and enjoyed net income of $3.48 billion, while the
Google’s worldwide gross revenue will reach $11.8 billion in 2007, according to a new report from Internet research firm eMarketer.
While both earnings reports are impressive, it’s interesting and important to know that Google is responsible for taking advantage of the new information age by capitalizing on this knowledge-based economy that powers the Internet.
Many marketing analysts view the Internet as a global marketplace filled with huge shopping malls. These global shopping centers offer a wide variety of products and represent a stable source of income for various small and large retail conglomerates.
But it is access to information that provides the highest and most stable income from the Internet. Providing content is the most stable and prolific income generator on the internet. The information age began in earnest in 1992 when the computer became the most accessible to the general public.
Membership sites seek their income by providing access to specific information based on niches. The benefit of a membership site is convenience and accessibility. In some corporate environments, it is the information that contributes to the bottom line.
Because membership sites are so specific in their acquisition and dissemination of data, they can become an incredibly valuable resource for their members. The types of membership sites being developed online range from membership for dog owners to sites for individuals who consider themselves to be chocoholics.
Membership site owners will provide content and a sense of camaraderie to their members. Online consumers, just like people offline, have an innate need to belong. Membership sites offer not only information but also familiarization to their members. Members are linked both demographically and socially in their desire for a specific type of information.
Some people have a voracious appetite for information and join several diverse categories of sites to keep abreast of information on various topics. The Internet is full of information junkies who have a voracious “need to know.” Membership sites offer these people access to a lot of valuable content for their own use.
Knowledge is power and is therefore a valuable commodity both online and offline. Being “in the know” is a highly prized attribute among certain segments of the population. This desire for knowledge from these consumers will form the basis of revenue generated by companies that can provide relevant content to information-hungry Internet consumers.
This consumer “need to know” drives the fortunes and profits of large corporations, as well as individuals who choose to capitalize on these intangible assets. Content is the main asset that many internet entrepreneurs use to boost their AdSense revenue, ezine and article marketing campaign.
Content is the king of the internet and will continue its reign from now until perpetuity (whenever).
