Bloglines Revenue Models – A fine line to walk

I missed this snippet of a post by Bloglines CEO Mark Fletcher late last year where he talks about the business model (income stream) for Bloglines in the future:

‘Eric was interested in the business model behind Bloglines. Not accepting my usual stock answer of “Volume!”, I detailed that we will integrating highly targetted contextual advertising into Bloglines next year, or “Adwords on Steroids” as Eric puts it (I like that description!). To reiterate what I told Eric, when we do start to roll out advertising, we will be very sensitive to user feedback, and we will be looking to our users to help guide us in this area.’

It will be very interesting to watch the rollout of such a system of ads for a number of reasons. Firstly I’ll be fascinated to see how their users (RSS subscribers) react to seeing ads appearing in or around their RSS feeds.

But secondly I’ll be interested to see how publishers react to it.

Some might argue that it is no different to Google putting contextual ads on the results of their search results – but I think it goes a step further. It depends completely upon the format and positioning of ads, but I suspect that they will have to be very careful and will probably get accused by some (many?) publishers for breaching copyright.

If a blog’s post is published on Bloglines in full and they slap a contextual advertisement do they breach creative commons copyright licenses (like the one on this site) that say that content cannot be used for commercial gain by anyone but the owner of the content? How will they get around this? Some possible approaches might include (none of which I could really see working):

– a revenue sharing agreement with publishers (this would be incredibly tricky and virtually impossible to implement due to the vast numbers of sites that they track)

– placing ads well away from the actual RSS feeds and not making them directly contextual to the feeds (this will cut down the profitability of the ads)

– running an RSS advertising service like Feedburner who are trialing putting ads in RSS feeds where they offer publishers a system of contextual ads in their feeds. Bloglines would take a cut of any revenues – in someways similar to the way Adsense works (again very complicated knowing number of publishers they would have to offer this service to).

Again – I do not know what Bloglines are proposing but I suspect they have a very fine line to walk with the introduction of ads. If they’d set a system in place from the beginning they would probably have more chance of success – but to bring in ads now could create problems. It will be an interesting one to watch.