Hardik Thakkar on Web Development, Internet Economics and other unrelated things

In this post, I am going to talk about factors that slow the pace of the ‘Equilibrium Effect’ I wrote about in my last post.

* Geotargetting

An arguable point would be that Indian webmasters would have content that would mostly attract Indian audience and hence would be subject to different ads altogether because of Geotargetting.
There’s a strong counter point to that: Globalization. Indian webmasters can always make sites targetting wester audience. Technologically Indian students have long since proved their powress. And also with the fashion of simulatenous worldwide release of most new movies and music albums, Indians have access to information needed to make related sites on.

* Parallel Growth of Publishers and Advertisers

In the previous write up, I assumed that there will not be any growth in the number of advertisers vis-a-vis publishers. This was a slightly over-the-top assumption. Firstly, Google is aggressively vouching for new advertisers on its AdWords program; this has especially been increased in the past few months to gain an advantage over Yahoo and MSN when they open to public their ad-programs.
Even in India, Google opened a marketing centre in February and since then webmasters having typically Indian content have witness many ads exclusively geotargetted for India from Indian biggies like Shaadi.com, Naukri.com, Monster.com, EBay.in, etc.
In conclusion, growth in the Advertisers is going to slow down the equilibrium effect significantly.

* Entry Barriers

Just as I mentioned that $1000 is a big amount for Indian middle class, the cost of setting up a new website; let’s say $200 is also quite big for them when compared to say someone in the US. So effectively there is a harsher entry barrier for Indians to start a website and may deter several potential publishers simply because of cash flow problems.

* Growing Indian Economy

With the growth rate of about 9%, those average $1000 will tend to slowly be not enough for Indians to give up their current vocations for it. Frankly, this is a little far-fetched assumption but still in a very long term may gain importance.

Hope you enjoyed the series. Your comments, as always, are most welcome here.