Forum Monetization & PEx’s Business Model

PinoyExchange (PEx) is probably one, if not the oldest, of the commercial sites in the Philippine cyberspace that breezed thru the dotcom boom and survived the bust. With memberships of 171,729 and 15,258,823 posts since July 1999, PEx could very well be the second biggest site in the country in terms of traffic next to Inq7.net.

There’s no available public stats for PEx but a quick check with Alexaholic showed it’s neck-in-neck with PhilStar for the second spot.

Still, despite the relative success in the online business, PinoyExchange is still under the red and funds are always short (mainly from advertising and co-branding). The site is currently suffering from slowdowns/overload and the admins admit they could not upgrade the servers because there’s no available funds for it.

I’m not sure how many servers they have but I reckon it could be around 2 or 3 costing as much as Php50,000USD 852INR 72,230EUR 812CNY 6,205 in monthly hosting cost. That’s on top of the cost of operation and salaries of the admins, sales and marketing people. So you’re looking at a conservative estimate of Php 300,000USD 5,112INR 433,380EUR 4,869CNY 37,230 monthly burn rate.

They’ve already scrapped AdSense altogether so I guess they’re not earning enough from the real estate it used to occupy. What’s getting a lot of heat right now are the huge ads that came along with the Server Busy page (makes people think they’re doing it to pad ad impressions). Another option they will be trying is “interstitial ads” which is similar to what you get in YahooGroups (much like an 8-second pause for an ad when you flip pages).

Active users are now suggesting that maybe the subscription model alongside the advertising model would help ease the cash-strapped forum/community. They used to have PEx Plus+ which is an annual subscription for premium members a few years back but they discontinued it. I think it’s time to revisit that idea. With over 170,000 registered members (ok, there’s a lot of multiple and dead accounts in there), even if only 2% of that are premium subscribers paying Php50USD 0.85INR 72EUR 0.81CNY 6 a month, that’s already Php170,000USD 2,897INR 245,582EUR 2,759CNY 21,097 — more than enough to quadruple (4x) their server capacity with some spare change for a good Web 2.0-ey redesign.

Of course, the rest of the 98% of the members will still have the free and basic services they get from PEx, maybe with the search function enabled as well.