ezboard: Making Customers Pay

1. How should ezboard update their business model to reach their revenue goals?

Ezboard's revenue goal is to double revenues each year - currently the company's positive cash flow is $1 million. In order to double revenue, Ezboard should focus on increasing the number of smaller board subscriptions, increasing the profit margin related to big board subscriptions, and negotiating long term advertising contracts.

Currently board and user subscriptions make up the majority of Ezboard's revenue (57%). There are two types of board subscriptions - big and small. Big boards require more bandwidth to support and ultimately produce a low profit margin. Small boards on the other hand, require less bandwidth to support and provide a higher profit margin. Moving forward, Ezboard should take steps to increase the number of small board subscriptions.

Although big board subscriptions are more resource intensive and not as profitable as small boards, individual big boards are a vital part of Ezboard's user mix. Big boards are valuable because they bring a lot of user traffic to Ezboard, which impacts online advertising revenue. However, Ezboard should capitalize on the fact that big boards are less likely to switch providers (due to the inconvenience and down time) and raise subscription prices to provide a more sustainable profit margin.

Ezboard's advertising revenue is dynamic and ranges from $30,000 to $100,000 per month. This currently makes up 33% of Ezboard's revenue and is expected to increase substantially. To compensate for they cyclical nature of advertising revenue, Ezboard should leverage its constant user traffic to negotiate long term contracts with advertisers.

2. What services should they consider offering with their new version 8.0 software?

When deciding which services to offer with the new version of software, Ezboard should refer to the surveys completed by their registered users. The survey indicated that the user base has expanded from just 18 to 25 year old males to also include 25 to 45 year old females. This change in user base indicates that board content has changed from just gaming and music to a wider variety of topics, such as television, health, and parenting. Although this information is useful for potential advertisers, it does not significantly impact the design of the new version of the software.

The market research also indicates that board users desire a leaner application with only select functions from blogging, photo sharing, and social networking web sites. The addition of select functions would enhance the message board experience without creating a bloated application that is slowed down with under utilized functions. Going forward, Ezboard's new software should appeal to a wide variety of users who want an application that is firmly centered on the message board format.