Doc Searls is always great for simplying complex concepts, and coining terms for them. A year ago he wrote a post about ‘The Because Effect’, which is a fantastic way to explain how you make money in blogging (and many, many other things).
I’m especially interested in exploring what I’ve been calling the because effect. This is what you get when your new business isn’t just about inventing and controlling technologies and standards, but about taking advantage of the new opportunities opened up by fresh new technologies and standards. For example, making money because of blogging, or RSS, or desktop Linux, or whatever Ã¢â‚¬â€ rather than just with those things…
Prime example, because of search, Google and Yahoo make money with advertising. Another: because of Rivendell, Salem Communications saves money with its core buisness, which is broadcasting. Because of his blogging, Thomas Mahon makes more money with his tailoring business.
I must remember to mention this at the talk I’m giving tomorrow, as it’s a real graceful illustration of how blogging works. It’s not just the Google AdSense revenue–that’s a pittance for most people. The real juice is in a blog’s network effect.