Add On Business Models


Mozilla Add-ons

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The opening panel at Add On Con is made up of Kimbal Musk of OneRiot, Alec Jeong of CoolIris, Alex Iskold of AdaptiveBlue, Geoff Mack of Alexa James Joaquin of Foxmarks and Adam Boyden of Conduit. The participants had to introduce themselves with a haiku. That was pretty entertaining.

Alexa arguably has the first and most well known business based on an add-on. The Alexa toolbar was made popular by webmasters who promoted the toolbar as a way of elevating their rankings. This was a double edged sword since it also muddied their data for a while. Get people excited so that they promote the service.

Foxmarks synchronizes bookmarks across machines by keeping the bookmarks in the cloud. They have 9.5 million downloads and 2 million active users. The Mozilla add ons site (aka AMO) has been a key factor in that growth. A new kind of SEO: determine the qualities that make a "featured" add on. Also actively promote your add on on your Web site.

Conduit builds a toolset for others to create toolbars, so their distribution model is indirect. They have 40 million people use a toolbar based on their platform every month.

CoolIris has 1 million downloads to date with zero dollars spent on marketing. Five key distribution channels: download sites (AMO, etc.), use partners, upgrades from other add-ons, word of mouth--especially blogging, Twitter, etc., and their own home page.

Glue has a social component which leads to natural word-of-mouth distribution. They also offer services to websites that makes use of their add-on so the websites become partners in th distribution.

Should you require registration? Foxmarks is the only add-on in the top ten at AMO that requires registration. Registration introduces friction in the download process but aids in retention. People who go to the trouble to register are more committed to using the add-on.

Some add-ons (like Alexa) are passive--the user doesn't have to do anything for the add-on to work. For non-passive add-ons, active users is a better metric than downloads or installs. Good user experience is crucial to maintaining user participation.

Revenue is clearly the bottom line for any business model. Conduit makes money by enabling publishers to place interesting content on the toolbar. OneRiot is also making revenue by building toolbars for other people. This drives search traffic to OneRiot (where the primary revenue is made, though I can't tell how). Most business models don't earn revenue from the toolbar, but from the other business that the toolbar supports.

Some add-ons that provide an alternate experience (like CoolIris) have room to run ads right in the add-on. There's disagreement (as you'd expect) about how users react to this.

Here's one recipe:

  1. You have to create an insanely great product that people will want to install, use, and share.
  2. Use the unique position of being a piece of software running in the browser to drive traffic to your web property.
  3. Monitize the web property.

Audience asked a question about barriers to entry. People are very concerned about sharing their personal data. If your add-on requires a loud service, getting that right can be a barrier.

Audience asked a question on charging for the add-on. A common framework or platform for doing this would be a boon for the community. Most business models currently require a large install base and charging would hinder that.

Small, unobtrusive add-ons (like icons in the status bar) are unloaded much less frequently than large toolbar or sidebar style add-ons. The Alexa toolbar has 95% more churn than the smaller Alexa add-on.

As an aside, Jeremy Liew of Lightspeed was the moderator of this panel and he did a great job. He'd done his homework and asked good questions.