How Weebly has created Competitive Advantage
Weebly has created Competitive advantage in a few ways:
First Mover Advantage: Although Weebly is a relatively new web-site creation service, it was the first to make it very simple with its drag-and-drop elements. The key is that they are easy to make, but still look great. This is a service that was not was really not previously available free of charge, and so Weebly was able to create a large, loyal following.
Switching Costs: Once a user creates a website on Weebly and forms a good amount of traffic, they devlop high switching costs; It would “cost” a user time and money to abandon their website to create a new one that, to start, has virtually no traffic and hence, no value.
Network Effects: Weebly exhibits network effects, as users attract more users which attracts more users. For instance, if a user creates a great website about their business, shows their friends/customers, and tells them how easy it was to create and free, these friends/customers are very likely to try Weebly out too.
Weebly Reaches 1,000,000 users and becomes profitable
In November, 2008, Weebly released a statement that it had reached 1,000,000 users and was now profitable. As user-ship increases, the more traffic the site gets, which produces more revenue from upgraded accounts and advertisements. In June 2008, Weebly stated it was gaining around 10,000 users per week. The graph to the right shows Total Registered Weebly users from its creation in October 2006 to June 2008.
How does Weebly make money?
So how exactly does Weebly leverage their competitive advantage and popularity to make money?
In June 2008, Weebly released two products to help bring in revenue: its Pro Accounts and the Google AdSense widget.
Another way Weebly makes money is through the sale of unique domain sales (i.e we could pay $40 for our website URL to be something like grouproject.com instead of grouproject.weebly.com)
Weebly Pro Accounts
As mentioned on the previous page, Weebly offers users Weebly Pro accounts. These accounts are an upgraded version of the Free account, that allow users to add features like audio files and password protected pages to their sites. The Weebly Pro accounts cost $5 per month or a discounted $4 per month for a two year package.
Although the company has not explicitly stated how many users have pro accounts, Rusenko has stated it is "well over 1%".
Google AdSense Widget
As we discussed in class, Google's AdSense has become an extremly profitable creation for Google, accounting for around 60% of its revenues. Weebly has created an AdSense widget so it and its users can profit off of Adsense's success.
The Google AdSense widget can be added to any user's site, regardless of whether it is the basic or the Pro Account. This drag and drop element is completely automated. Weebly users just click and drag the AdSense widget to a page, and Weebly/Google do the rest, choosing appropriate ads and creating the proper size and format for the page.
The revenue made by Weebly from these advertisements is split 50% with the user who adds AdSense. Becuase this is such a high percentage, and becuase it is so simple to do, there is great incentive for users to add the AdSense widget. Although Weebly shares its revuenues, the more users that do add AdSense, the more revenue Weebly stands to make.