Henry Blodget posted today about Yahoo’s acquisition of del.icio.us and posed the question whether del.icio.us exploited and then abandoned its users.

First a little background and a brief rant:

1) Del.icio.us is a social bookmarking service, which means it is a service that allows users like me and you to bookmark web sites and parts of web sites and add descriptive keywords, called tags, to describe the things we have bookmarked. Other users can then search for topics of interest by searching for related tags.

2) The discussion that Henry describes happened at some “industry think-tank.” I find the whole idea of think-tanks to be hugely pretentious. I’m surprised Ken Leebow wasn’t there so he could run home and post about how useless the rest of our blogs are, but I digress. Henry’s a smart guy and I enjoy his writing- even if he did participate in a think-tank.

Anyhow, the issue is that web sites like del.icio.us build a platform, rely on users to populate and expand it and then, sometimes, sell it for a fat profit. As Henry points out, that’s the same thing that happens with message boards, review and opinion sites and countless other platforms. It happens with blogs- commenting and interactivity are the best ways to increase page views, which increase value.

The theory behind del.icio.us is the same theory that drives the growth of message boards. People want to express their opinion (Henry did it and now I’m doing it) and they like to do it at a place where they can find an audience. When I developed ACCBoards.Com, it was just an bunch of code on a server. But it filled a need- the web was a smaller place back then there was no other web site where fans of all ACC schools could gather to talk about their shared passion for ACC sports. By share, of course, I mean not just to read, but also to write. Before long we were getting millions of page views a month. I didn’t sell ACCBoards.Com, but I was about to when the dot.com bust occurred (I still get that letter of intent out once in a while and weep over it).

Was I somehow taking advantage of my users? I don’t think so. It took a lot of money to pay for the servers that ran the original site, and the new features I wanted to add were going to require money and resources I didn’t have. The users’ needs would still have be met had the sale closed- maybe even met better. Yes, I would have made some money, but so do the developers of successful shopping malls, restaurants and golf courses- all of which rely on their customers to make them successful. And unlike most golf courses, you don’t have to pay to use del.icio.us.

It all boils down to service- if you provide a service to people, they will use it. If you create a sense of community, they will use it even more. If you do that and then make some money, that’s a good thing, not a bad thing. Sure the big dollars might be harder to come by in the future, but we thought the very same thing after the dot.com bust and there’s lots of money being made now- 5 or so years later. It’s a cyclical thing. There will always be new trends and new ideas driving those trends. In the mid-nineties, blogs (nee journals) were boring internet diaries. Now for all intents and purposes blogs are the internet. Things change and ideas are hatched. Money can be made, and lots of it on the frontiers- be in California in the 1890’s or the internet in the 1990’s.

Henry concludes, as I do, that del.icio.us did nothing wrong. Provide a good service, make a little money. That’s the way things ought to work.

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