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Letters - To John Breen (founder/owner of FreeRice)

  • Oct. 19th, 2007 at 3:07 PM
pleaseask
Sent to Mr. Breen's WHOIS contact e-mail:

Subject: Question: Can you publish your funding breakdown for FreeRice.com?

John:

I thought I could give this request a shot, since my off-the-cuff calculations (http://perigee.livejournal.com/414894.html) are a little disturbing.

I figure you must not be working a standard CPM advertising deal with the advertisers/sponsors of FreeRice, and that your profit margins probably aren't that high, but can you shed light on what is going on in your charity and what your numbers look like from your end?

The problem is that folks are figuring out that 10 grains of rice is very very small and that the potential for ad-driven profit on your vocabulary game is very very high.

I'm not trying to make your life difficult, but it would be wonderful to know what your charity's funds-handling process is like, how much overhead you've got, etc.

Thanks very much in advance,
Malcolm
I'll let you know what he says, if anything.

Comments

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[info]copperwise wrote:
Oct. 19th, 2007 07:27 pm (UTC)
If it is anything like his previous company, The Hunger Site, it is not a nonprofit organization so it doesn't actually qualify as a charity. That means none of the charity rating organizations will be able to check on them and none of the records have to be subject to public scrutiny.
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[info]perigee wrote:
Oct. 19th, 2007 07:33 pm (UTC)
That's... genius. And fucked up too. Hm. I guess there's no law against operating a company and stating that you're pursuing charitable goals. There could be fraud if you weren't doing what you said you'd do, but the FreeRice concept is then really smart because folks don't stop to think how small the amount of rice is, so as long as you ship a 20kg bag of rice to "the needy" every few days/months/weeks, you can pocket the rest of the cash.
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[info]copperwise wrote:
Oct. 19th, 2007 07:38 pm (UTC)
That pretty much covers it. He sold The Hunger Site for an "undisclosed amount." Now he's got another one going. There's an entry on him on Wikipedia.
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[info]perigee wrote:
Oct. 19th, 2007 07:42 pm (UTC)
Well, I guess I won't expect an answer, since it would be stupid for him to dignify my request with a response of any kind.
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[info]copperwise wrote:
Oct. 19th, 2007 07:59 pm (UTC)
Yeah, I doubt you'll get an answer. Or you'll get the dewy eyed innocent response with no actual information.
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[info]00goddess wrote:
Oct. 24th, 2007 07:13 am (UTC)
The wikipedia entry says that The Hunger Site was a nonprofit while he owned it.
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[info]copperwise wrote:
Oct. 24th, 2007 11:29 am (UTC)
You're right, I missed that. I'm wondering what his costs were, as there are a couple of magazine articles explaining that he got a half cent for every 3 cents the charities got and he sold the site a year or so after he started it. Maybe he figured out a better way to run the thing costwise this time.
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[info]00goddess wrote:
Oct. 24th, 2007 11:17 pm (UTC)
Well, webspace has become less expensive than it once was, and it's even possible that if he is framing it as a charity, he can get someone to donate webspace.

I don't know (or have an opinion) either way, I am just spectating and speculating :)
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[info]nancylebov wrote:
Oct. 19th, 2007 11:05 pm (UTC)
Supposing that he's offering an entertaining vocabulary game, just giving a tiny bit to charity, and making a substantial amount of money for himself, does it make the world a worse place in any noticable way?

Do you think there are innumerate people playing and playing because they think they're getting substantial amounts of rice sent? This is a real question--I have no idea if many people would get snagged that way.

To my mind, the cheesiest thing about the site is the implication that it will help you improve your vocabulary. I don't think that sort of contextless exposure makes it possible to remember words.

And what are the odds that people are noticing the ads?

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[info]perigee wrote:
Oct. 19th, 2007 11:37 pm (UTC)
I guess I find the implication that 10 grains is a lot of rice (which is reinforced by the graphics in the game - when you get 100 grains of rice, the bowl is full) a bit insulting, and ethically difficult for me to swallow as the selling point for the game and for exposing myself to the ad impressions.

I think that if he pockets the substantial amount of money, that's one thing, but I'd rather see someone with differing politics making and taking that money, which is why I talk about his apparent personal political stance as the other portion of the issue I find troubling.

If you look at the conversation I have going on my other post with [info]ipsafictura, you'll see the other possible models of payment the donating organizations may be using with FreeRice. Advertisers, as she notes, pay for the same eyeballs less, and as the same eyeballs see the same ads, the price they're willing to pay plummets. So, the model I assumed in figuring the profit margins is probably not the best one.

But still, advertisers don't pay for nothing. If they found the ad system untenable, they wouldn't pay, so I figure they must be getting something out of it.
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[info]nancylebov wrote:
Oct. 20th, 2007 09:30 am (UTC)
I wasn't paying attention to that rice bowl graphic--I know ten grains of rice is very little, and let that override what I was seeing. I was clear that I was having fun demonstrating my vocabulary, and the charitable side was just a gimmick.

There are more than three ads--they repeat, but the ad rotation might be enough to get past the lower payment for repetition issue.

But still, advertisers don't pay for nothing. If they found the ad system untenable, they wouldn't pay, so I figure they must be getting something out of it.

I don't believe people in business are especially efficient. (I'm a libertarian because I believe government is worse than business, not because I believe business is reliably wonderful by any measure.)

Consider clothes for fat women. The large numbers of fat women has been a known and obvious fact for decades--the availability of nice clothing for them has only improved slowly, and still isn't very good.

Contemplate the sub-prime lending mess. A little thought and research would have suggested to banks that they were investing in unsustainable loans.

Thinking is hard work, especially if you don't know you've got something you need to think about. Even if you do want to think, sometimes the information you need is not yet gathered or is impossible to get. What your customers will want six months from now isn't knowable, and it can be hard to figure out what they want to buy now.

How much to spend on what sort of advertising is one of those non-optimizable issues, especially when you're figuring out the multi-year process of building a brand.

I'm not saying advertising is entirely a waste of a company's money, just that any particular piece of advertising involves a lot of guessing. Print advertising for mail order is an exception--it's possible to do controlled experiments there. I expect there is similarly testable web advertising.
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