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Del.icio.us Competitors Try Paying Users

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At least two Del.icio.us competitors, Simpy and RawSugar (profiles) have begun paying users to use and promote their services. While the companies have different payment models, both pay based on traffic generated at a particular users page containing the user’s bookmarks.

Simpy

Otis Gospodnetic’s Simpy is allowing users to enter their Google Adsense account number and ads will be shown on their bookmark page. See Otis’ Simpy page for an example.

Simpy is paying 100% of the proceeds from Google to the user for any ads on the page (in fact Google pays the user directly).

Raw Sugar

Raw Sugar is taking a more direct approach – they are paying the top twenty “directories” (user bookmark pages) between $25 and $500 per month. Directories are ranked on raw traffic, and the first payouts were made earlier this month.

RawSugar also plans to pay users a percentage of advertising revenue in a similar way as Simpy.

Is this a gimick to generate attention or is it a viable long term strategy to generate user adoption? Pete Cashmore thinks these promotions should make Yahoo (now owner of del.icio.us) take notice (see his further thoughts in the comments below). Maybe he’s right. And the markets for these products are still in the very early adopter stage.

But it is going to be hard for anyone to overcome the del.icio.us network effect (not to mention Yahoo’s marketing muscle) with relatively small direct economic incentives. I am, however, looking forward to seeing how these promotions drive new user registrations and site traffic. At the end of the day, these companies have nothing to lose with experiments like these.

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