Wednesday, July 14, 2004

Economics and Technorati Scaling

Brad DeLong points us to a post by David Sifry, in which Sifry describes the difficulties that have cropped up as Technorati has gone to having 3 million blogs tracked. Why is it that Professor DeLong doesn't point out to Mr. Sifry that the economists' trade has an elegant but efficient way of dealing with excessive demand, i.e, the price mechanism?

If Technorati were to start charging for, say, new enrollments, or for pings and searches above a certain number per day, it would deal with two problems at one stroke: forging a path towards profitability, and curbing excessive usage that hampers its ability to deliver a reliable service. The mundane reality is that weblogs are no more than simplified content management systems, and it's easy to envision a day when the difference between weblogs and the rest of the web becomes so blurred that Technorati will have to be spidering the entire web graph several times a day in order to stay relevant. Either David Sifry starts putting a price (however minimal) on the services his firm provides, or he'll find himself slowly going broke trying to keep up an acceptable level of service quality in the face of exponential traffic growth; that day won't necessarily come in the next 6 months or 1 year, but it will come eventually unless he can find a way to bring in more revenue while spending ever more on infrastructure, and the only sensible way I can think of to achieve both aims is to charge something.