Readability ditches business model

They've been called "scumbags" by John Gruber and elsewhere "The most egregiously unethical startup in Internet history", and now Readability has announced that they are to end their controversial money collecting system.

It went like this: Readability enables its users to view and share the text of online articles without visiting the site, so readers get the content but the site doesn't get to serve them ads.

To make up for this, the company set up a system whereby readers could pay a fee every month which would be distributed to content creators. Traffic would be monitored and the money divvied up accordingly. The trouble with the model was that publishers had to register with Readability and prove that they owned the sites they were claiming money for. Not many did that, and 90% of the $150,000 earmarked for them remains unclaimed. This problem is difficult to solve, because their traffic data contains millions of domains, so it would be a logistical nightmare for Readability to try to contact them all.

The company's solution to this is to donate the unclaimed money to "non-profit organizations that speak to the spirit of supporting reading and writing", and the blog post announces that Knowbility and 826 Valencia will receive $50,000 each.

Despite these donations and the fact that publishers who have not claimed their allocated money can still do so, not everyone is happy.

Readability CEO Rich Ziade appeared on Jeffrey Zeldman's The Big Web Show to talk about what happened.

Zeldman asked him why he thinks Readability is singled out for such harsh criticism when similar services such as Instapaper remain unscathed, noting that "you could crucify your own foreskin and they'd still be angry!"

Ziade's response was that their experiments in finding alternative revenue models are "alien" to people. "We tried to engage the problem, which is a big, scary thing to do. But we think it's going to take this kind of creative thinking to attack this challenge.

"The bigger challenge is that web ads are struggling and we need to play around and find new mechanisms to support the stuff we love to read."

Also controversial is the company's Readlists app which enables people to pull together a collection of articles and make them into an ebook. Any online content, except that which lies behind paywalls, can be scraped and shared freely in a book.

On this, Ziade said that Tumblr, Pinterest and YouTube pose the same problem: "These things are terrifying to people who create content. But we're asking what can we do with these powerful platforms? We don't have a secret dossier that tells us how to turn this into success for everyone, but we think it's important to start exploring things like this."

Asked what he was proud of, Ziade replied: "We view Readability as a platform. 85% of our traffiic is through the API, so we're powering all these apps and new experiences. We are a Research and Development company. To find new value in the content that's out there, you have to explore. And we're excited that we're part of the narrative that's still playing out."