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Subject:  Goozex's economic woes Date:  10/25/2012  3:10 PM
Author:  maracle Number:  34922 of 37101

Pretty interesting column about how Goozex killed itself with bad economic policies:

Eventually Goozex seemed to realize that it wasn't making enough money off of trades to make maintaining the site worth their while. By my math the company was only pulling in around $180,000 a year*, and after paying taxes, credit card fees, server/bandwidth fees, etc. there's not much left. So it needed a better way to monetize traffic on the site. It needed more money. So, in 2009, it began allowing users to directly buy points. This decision had some very predictable and very deleterious effects. Namely: inflation.


Goozex, which has (perhaps foolishly) been kind enough to publicly post its concurrent trades since its inception, has provided a very clear window into the aftermath of their inflation/price control death spiral. Overall trades, which were well above 5,000 in 2009, dropped by more than half to 2,400 in late 2010 and as of the time of this writing are sitting at 835.

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