Mark Zuckerberg

Ads is great when you want to offer people a free service, right?

Because it's free, you need to cover it somehow.

Ads is like, okay, ads solves this problem of like a person does not need to pay for something.

And they can get something that is like amazing for free.

And also, by the way, with modern ad systems, a lot of the time people think that the ads add value to the thing if you do it well, right?

You need to be good at ranking and you need to be good at having enough liquidity of advertising inventory.

So that way, if you only have five advertisers in the system, no matter how good you are at ranking, you may not be able to show something to someone that they're interested in.

But if you have...

million advertisers in the system, then you're probably going to be able to find something pretty compelling if you're good at picking out the different needles in the haystack that that person's going to be interested in.

So I think that definitely has its place, but there are also clearly going to be other business models as well, including ones that...

just have higher costs.

So it doesn't even make sense to offer them for free.

Which by the way, there have always been business models like this.

There's a reason why social media is free and ad supported.

But then if you want to watch Netflix or like ESPN or something, you need to pay for that.

It's okay because the content that's going into that, like they need to produce it and that's very expensive for them to produce.

And they probably could not have enough ads in the service in order to make up for the cost of producing the content.

So basically you just need to pay to access it.

Then the trade-off is fewer people do it, right?

It's like they're talking about hundreds of millions of people using those instead of billions.