Quote Originally Posted by marcjacob View Post
I would guess that they would make more money by retaining members and then cross-selling to members who cancel. This model doesnt make sense to me.
They manage to keep making money because they're no longer spending any on creating content or doing anything like that for the site. Minor maintenance and hosting - and they already have all the resources and infrastructure in place for those because they're a large company with a network of sites - are really the only expenses from that point on. It becomes a site that doesn't have the greatest amount of incoming revenue, but has almost no outgoing revenue. So the margin's still quite decent. Then, repackaging it and selling it as a plugin actually can net them a hefty chunk of change on a regular basis.