All it takes is basic math to see why Entrecard will never succeed as an income earning advertising medium for bloggers.  Simply look at the “best case scenario” and the “worst case scenario”.

Best Case: 300 real bloggers casually dropping on other real blogs.  What is a casual dropper?  Any number works, but lets say 100 blogs a night.  Can you read that many?  It makes no difference for this example.  So lets do the basic equation.  

  • Step 1: 300 card droppers dropping 100 cards= 30k credits for both the droppers and receivers.  A total of 60k credits enter the system out of thin air.  Each blogger receives 200 credits for their nightly efforts.
  • Step 2: Each blogger spends their 200 cr buying ads on another good blog.  Thanks to the 75% tax,  each blogger ends up with 25% of 200 cr, or 50 cr.
  • Step 3:  Entrecard now buys this 50 cr surplus from each blogger.  15,000 credits total, and the economy balances, right?  Wrong!

Worst Case: 300 pay per post sploggers dropping on other splogs.  It doesn’t matter if they have multiple accounts that drop 300 as the math still works the same.  

  • Step 1: 300 card droppers dropping 300 cards= 90k credits for both the droppers and receivers.  A total of 180k credits enter the system out of thin air.  Each blogger receives 600 credits for their nightly efforts.
  • Step 2: Each splogger hordes their 600 cr knowing they can make some easy money from the system.  If they are lucky, some sucker bought ads on their splog, increasing their nightly take.  But we won’t take that into consideration.
  • Step 3: Entrecard now buys this 600 cr surplus from each splogger.  180,000 cr total, and the economy balances… Almost

Look what just happened:  Combine the best case and worst case together.  Entrecard created 270k credits out of thin air.  It taxed the good bloggers 45k cr for having the nerve to buy ads.  That means Entrecard still has to purchase 225,000 credits a night to balance the budget.  If Entrecard makes $1000 a day selling paid ads, then it claims it would return 75% of profits to the members.  75% of $1000 is $750.00. $750 / 225K cr = .0033 per credit paid. (For any given day, we will take 75% of our revenues and pass them on to you by way of cashing out your credits)

Total Income

Good Blogger: 50 cr x .0033= $0.17 per day

Bad Splogger: 600cr x 0.0033= $2.00 per day

Now, don’t spend that $2 so fast.  That’s assuming there are only 600 Entrecard active members.  Though Graham still claims over 30k members, the real number is between 2400 and 17k blogs.  It also assumes someone would be willing to pay $1000 a day to advertise on Entrecard blogs.  Changing the advertising dollar amount doesn’t change the ratio of who gets paid.  Sploggers still get a 10:1 advantage.  Is the ratio of good bloggers to bad bloggers 1:1?  I’m sure it isn’t.  But is the real ratio better or worse, even after the supposed cleanup?

Bottom Line: If sploggers find out they can get anywhere close to $2 per day per blog they will be trying to sign up by the thousands, further worsening the ratio of good to bad blogs, and also making admission standards impossible to enforce.  Then again, I think even $1 a day would be enough for them to increase their scripting/spamming efforts.  So what will it be?  A system where nobody makes any money because noone wants to advertise to rubbish traffic, or a system that is only profitable to spammers?  Either way EC takes it’s 25% cut, so it won’t matter to them. 

By the way, what about the ads in the sidebar, the sleazy front page affiliate ads, and the Google Adsense scattered about the site.  Are those profits also distributed to the members?  If so, how are they divided up?  Ah, so many questions.  Don’t you just love these last minute fixes?  Even if you don’t care about the money, you had better read the Entrecard terms of service.

“We reserve the right to adjust the credits in the economy as a whole, as a percentage increase or decrease equally across the entire network.”  That means if Entrecard wants to buy 90% of all credits in the system, it will. Like it or not, folks.