“Volunteers” of America (Online)

One of the biggest holes in the Internet business model involves moderators.

Back in the 1980s, CompuServe had a sound model for paying the people who ran its forums and built its communities. They were given a portion of the online time their forums generated. As the forums grew moderators sub-contracted the work to volunteers, forum members who were given only a free account for their work. I did this myself for a time, and felt well compensated, because I was getting $8 hours free.

With the rise of all-you-can-eat pricing, however, the economic end of the model fell apart. Instead of using entrepreneurs as moderators, America Online turned to media companies. Their employees did the heavy lifting. (I performed that role on AOL in 1996 at CMP’s NetGuide Magazine.) Volunteers were still used heavily, but monthly pricing cut their “earnings” to virtually nothing.

America Online exploited the new model to become one of the most valuable companies in the world. But there is now restiveness in the ranks. Some former volunteers launched a Web site, and the U.S. Department of Labor is looking into the AOL volunteer agreements.

The question here isn’t whether AOL volunteers should be deemed employees and paid. If people stop volunteering, and AOL considers their functions essential, economics dictates AOL will find a new model for getting their work done. The question here is why the Web hasn’t recognized the importance of community builders before.

VerticalNet has, and has billions of dollars in equity to prove that its model works. Its editors are well-paid employees who find daily news within narrow industry niches, and are also charged with building communities through forums and e-mail exchanges. When businesspeople find themselves in AOL-like communities, they don’t just make new friends. They find suppliers, clients, and business partners.

If you find an economic model that will let you compensate the best community builders for their work, in other words, you can make a lot of money. The current problems at AOL aren’t a labor story — they’re a business opportunity.

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