Bluesky, the decentralized social media platform, has been gaining traction with its vibrant community and user-centric approach. However, the question of how the platform will eventually generate revenue remains a pressing concern. In a recent interview at TechCrunch's Strictly VC event, CEO Jay Graber shed some light on potential monetization strategies, while emphasizing the importance of maintaining user control and avoiding the pitfalls of traditional social media models.

Graber revealed that Bluesky has raised $15 million in funding so far, with interest from other investors already pouring in. While the company is still focused on growth, Graber hinted at several potential revenue streams, including social media subscriptions, a marketplace of algorithms, and selling domain names. Notably, Graber did not rule out the possibility of ads entirely, but emphasized the need for a user-centric approach that aligns incentives with users, rather than treating their attention as a product.

One potential avenue for advertising on Bluesky could be through search results, which Graber mentioned as a less intrusive method. This approach would allow the platform to generate revenue without compromising the core user experience. However, Graber was adamant that Bluesky would not replicate the mistakes of other social media networks, which have historically served ads to users through algorithmic feeds. The open protocol underlying Bluesky's architecture makes it difficult to implement a business model solely reliant on ads, as users could create alternative feeds without ads.

Graber's commitment to user control and digital rights is rooted in her background as a digital rights activist. She believes that people need to be able to control the social networks they communicate on, given their vital importance in modern life. This philosophy is reflected in Bluesky's design, which prioritizes user autonomy and flexibility.

In contrast to Reddit, which recently posted its first profitable quarter partially through AI licensing deals, Graber ruled out this revenue stream for Bluesky. The company has already vowed not to train AI on Bluesky posts itself, and Graber would like to establish a protocol similar to robots.txt, allowing users to signal that they don't want bots to scrape their content. However, Bluesky's open protocol makes it challenging to prevent people from scraping the platform to create AI training datasets, unlike Reddit's closed-off architecture.

Despite the challenges of monetizing an open protocol, Graber is optimistic about Bluesky's growth potential. The platform has expanded from 3 million users in February to 24 million users today, with plenty of room to scale. Graber also mentioned the possibility of a business emerging from maintaining the AT protocol, which Bluesky is built on top of, such as offering services to other platforms built on it.

The tension between Bluesky's open protocol and its monetization strategy is a key aspect of the platform's development. By prioritizing user control and autonomy, Bluesky is taking a fundamentally different approach to social media, one that may ultimately prove more sustainable and user-friendly. As the platform continues to grow and evolve, it will be crucial to strike a balance between revenue generation and user empowerment.

In conclusion, Bluesky's monetization conundrum is a complex and multifaceted issue, one that requires careful consideration of user needs, platform design, and revenue streams. As Graber and her team navigate this challenge, they will be closely watched by the tech community, which is eager to see a new model for social media emerge.