MIAMI, FL — (Marketwired) — 12/11/14 — Since its launch in September 2014, social network startup Ello has become the hot tech topic of conversations around the globe. The company was founded on a promise never to sell user data or show advertising, the bane of many Facebook users. But a number of tech experts claim those are necessary evils given the need for an online business to raise constant revenue. Miami-based Internet entrepreneur and expert, , has offered his own analysis of the interesting dilemma and explains why he thinks Ello might have a real chance at grabbing a good sized piece of Facebook–s market share.
“Facebook spends around $860 million, or about $1 per user, every year maintaining its data farms, the most important piece of a social network,” explains Argall. “When the data is slow, users get frustrated and quit, so it–s not the place to shortchange. There is a never-ending need for any site to continually expand its basic infrastructure. So now, Ello is facing the challenge of raising enough to compete with Facebook — without using advertising as a source of income. Even if Ello were to only serve the United States population, that equates to roughly $167 million per year, given that Facebook claims 167 million American users.”
But according to Argall, Ello is on the right track by trying to establish its caché in the social media world as the –Anti-Facebook–. “Ello is using the –velvet rope– model to build buzz and the sense of exclusivity,” explains Argall. Currently, the only way to join Ello is via an invitation by an existing member of the website. This strategy has worked well before to introduce and establish some extremely popular and successful web services, such as Gmail and Spotify. “Not only does the invitation model elevate the perceived value of the service and build demand, it also helps the team at Ello control growth. This allows them to sort out technical issues before the service gets too big,” says Argall.
Ello–s co-founder Paul Budnitz, owner of the famed Kidrobot toy stores in San Francisco, Boulder, and Los Angeles, announced that Ello will always be ad-free and will never get involved in data mining. This has caused some onlookers to wonder how the new social media site can ever become profitable. “Budnitz– business plan is to sell users on additional features such as accessing multiple accounts, or buying a limited-edition emoji pack designed by a street artist,” explains . “This in combination with the promise to stay away from ads and data mining is a promising approach. Social media users are tired of being bombarded with advertisements and they want to keep their personal information and browsing habits private. Ello is meeting those demands,” Argall elaborates.
–s experience in Internet-based businesses dates back to the early days of eBay when he brought a dwindling business back to life by using an auctioning platform to reach potential customers. After launching businesses in a variety of industries, including loan industry, telemarketing, the utility sector, and ecommerce, Argall is once again back in the IT and Internet business, currently working on an innovative social media monetization project which is set to enter the US market early next year.
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