Orbital Theory for Web 2.0 Sites

Avi Muchnick writes some interesting ideas on the Worth1000 blog about "Orbital Theory" which states that the value of users of web 2.0 sites is related to their interaction with the site AND the frequency of their visits.

As Orbital Theory goes, I like the idea.  It's reasonably intuitive, too.

I agree we're headed to a 'crisis' in metrics, but I'm not sure how this interacts with valuation (I'm *not* saying it doesn't).  The pageview is becoming useless as a measurement for plenty of Ajax-driven sites - they now have to work hard to show how they deliver additional ad impressions in the same page. 

I also agree that user affinity for a site should make the average ad impression on the site more valuable.[1]   But maybe the upshot is that ad impressions to high-gravity users are more valuable- how you get advertisers to buy that is the question.  Maybe you move entirely to CPA advertising? If advertisers never bite on that, how will the gravity of your user base ever translate into revenue dollars, and then to valuation?

I promise to think about that.


[1] I recall thinking about this in the context of woot.com but I never got into the math/econ of it- if people are glued to the site they'll be looking at your ad more intensely..</the_immigrant_song/2006/10/wootcom_and_the.html>