The evolving IS literature on business models for digital products assumes that the positive feedback effect will lead to price competition and biased concentration of the market. In theory, this will require companies to either differentiate or customize their products and services. In this paper we propose an empirical investigation of customization as a lock-in business strategy for online newspapers in a homogenous and well-developed market. We explore approaches taken to customization and

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... valuate their impact on revenue generation of online newspapers. Our empirical tests with data from 42 online versions showed that mainly experienced, nation-wide online newspapers applied customization. We determined two main customization approaches for online newspapers, customer and process oriented customization. Interestingly, only the degree of process customization was an important predictor and moderator of revenue having a significant interaction effect on the impact of the number of both customers and editorial staff on revenue. Contrary to our main hypothesis that customization should help in increasing customer lock-in through personalization or versioning, the majority of online newspapers seemed to concentrate mainly on process customization in order to serve a maximal number of different types of customers and to increase their revenue. The promising positive effects of customization strengthen our belief that customization could be an effective business model for online newspapers.