I think a large part of it was that back in the .com craze it was:
a) Extraordinarily hard to actually charge money. The user experience sucked and people were being told that these strange new cyberpredators could drain their bank accounts on a whim if they ever even exposed their credit card digits near a monitor.
b) The main product offered was textual content, which has always been an extraordinarily hit-driven business in which the misses do not monetize in any sort of scaleable fashion.
c) There was a whole lot of stupid money, and if you've got stupid money burning a hole in your pocket, then who needs to charge customers when that is just going to depress the metrics that get you more stupid money?
d) There's also a problem that the web is relentlessly youth-focused. People who came of age in that brief no-money twilight expect everything to be free. People who have not hit that age yet have some transactional difficulties in paying money. (Though they clearly pay money for things that people assume are unmonetizable -- I know more than a few people who spend no money on "music" but several hundred a year on iPods.)
It surprises people every time I mention it, but there is an entire world of users out there who are perfectly on board with the notion of paying money for value. They have money, they have payment instruments which are easy to use online, they have problems which they currently treat with expensive and ineffective non-digital solutions. As an industry we need to focus on these folks in addition to the 21 year old unemployed WoW player who seems to attract about 85% of our efforts. [And though I mock overfocus on that market segment, you certainly see, e.g., Blizzard and Apple making a killing out of that guy.]
As an example of the markets you are talking about, imagine 3 people aged 25-35, starting a new business. I am that market, and I have made at least a dozen purchases. Each time it was like this:
* hit some roadblock on the way to accomplish X
* find 3-6 solutions, pick the one most valued/recommended/easiest/etc
* slap down the debit card
* never think about that roadblock again
My lower bound is probably 5:1. If you can save me five hours of work per year for the price of one hour's income, I'll take it. A good example is DNS hosting, or a SkypeIn number.
If everyone's out digging for gold, start selling shovels.
a) Extraordinarily hard to actually charge money. The user experience sucked and people were being told that these strange new cyberpredators could drain their bank accounts on a whim if they ever even exposed their credit card digits near a monitor.
b) The main product offered was textual content, which has always been an extraordinarily hit-driven business in which the misses do not monetize in any sort of scaleable fashion.
c) There was a whole lot of stupid money, and if you've got stupid money burning a hole in your pocket, then who needs to charge customers when that is just going to depress the metrics that get you more stupid money?
d) There's also a problem that the web is relentlessly youth-focused. People who came of age in that brief no-money twilight expect everything to be free. People who have not hit that age yet have some transactional difficulties in paying money. (Though they clearly pay money for things that people assume are unmonetizable -- I know more than a few people who spend no money on "music" but several hundred a year on iPods.)
It surprises people every time I mention it, but there is an entire world of users out there who are perfectly on board with the notion of paying money for value. They have money, they have payment instruments which are easy to use online, they have problems which they currently treat with expensive and ineffective non-digital solutions. As an industry we need to focus on these folks in addition to the 21 year old unemployed WoW player who seems to attract about 85% of our efforts. [And though I mock overfocus on that market segment, you certainly see, e.g., Blizzard and Apple making a killing out of that guy.]