Ben Thompson on Ello:
Ello will fail, deservedly so. It has a consumer hostile business model.
I would love to see something like Ello take off, but that desire will remain unrequited for the foreseeable future. The bottom line is that in the social network market, ‘free’ will continue to reign. No one will pay for a social network (see App.net), and advertising appears to be the only other viable business model. Thompson, again:
When it comes to social networks, on the other hand, advertising is clearly the best option: after all, a social network is only as good as the number of friends that are on it, and the best way to get my friends on board is to offer a kick-ass product for free. In other words, the exact opposite of the feature-limited product that Ello is proposing.
The more I read Ben on social network market dynamics, the more he convinces me. The economics of the adverting-based model are too compelling for all parties involved, this model will not go away soon.