Worried about an upcoming recession, PayPal cofounder Max Levchin told News.com that his company, Slide, is "trying to shift away from advertising partially" and go "direct to consumers" for its revenues. "It cuts out one more party from the equation," Levchin said. "During a recession time you don't have to worry so much about building an enormous scale, you just have to build up a loyal base of fans that pay you a little bit." Slide's revenues today are generated mostly from ads on mini-applications embedded on Facebook and MySpace pages. Levchin is not the first to have come up with this idea, but having just raised $50 million from large investors for an ad-supported business, Levchin's shift in thinking is either a wise caution — or a brilliantly devious headfake for rivals who have yet to raise a big round of venture capital.
Similar fears likely went into Tumblr founder David Karp's decision to offer a subscription "Pro" package later this year. At the end of the last downturn, photo-sharing site Flickr sought shelter in subscription revenues while the advertising well remained dry. But an executive media director at an interactive agency tells us Levchin might be overreacting. "I have had absolutely no cutbacks so far," the exec said. "In conversations with peers they say they have not had cutbacks either."