Slashdot Mirror
The Future of Making Online Revenue?
e4 asks: "Let's see here:
CNET and DoubleClick have patented banner ads. Amazon and LinkShare claim patents on affiliate programs.
The Web essentially has an unlimited supply of advertising space, and demand from advertisers is pretty low, since the average click through rates are hovering around one percent. New products like Junkbuster are coming out all the time that help users block ads completely. Future prospects for ad-based revenue seem precarious. Venture capital may be drying up. The Internet community isn't too keen on fee-based services, and collecting and selling mailing lists, demographics and other bad mojo will get you blacklisted in a heartbeat. So how will information-based Web sites (especially smaller, independent ones) be generating revenue in five years? What will the business model be? Or will these sites just start to wither and die like neglected petunias in Phoenix?"
Subscriptions might not be acceptable, but if a micro-payment scheme might be acceptable. That way, interesting content could generate revenue for itself, not based on what ad deals can be struck. It would tend to make the content on the web better.
Check your facts. Junkbuster (and webwasher and other such ad/null content filters) has been around since at least 1998, so I'd hardly call it "new technology".
</gripe>
I think you'll see more companies online offering their services to clients. You'll see some sites that offer free downloads of software (whether free or closed) and then offer their programming services to customize that application to a customer's need.
You'll also see a few e-commerce sites prosper, while most wither like your petunias.
There's more to the Internet than just the web. I'd look for more ad-supported email digests and mailing lists.
I think someone who offers a service to a particular community might be able to make a go of it with a subscription based section of their web site that offers some truly unique information (ie. information not available anywhere else, not just all the information from everywhere else collected in one spot). You combine that with ecommerce and special support services tailored to that community and you might just have a winner.
The gold rush is over, but that doesn't mean you can't make money on the 'Net or that you can't get rich. It just means you have to earn it, and it won't just be handed to you.
Just be sure to wear the gold uniform when you beam down -- you know what happens when you wear the red one.
It doesn't matter if these sites can't be profitable. People want to make information available. Over the last 20 years, people have put masses of information up on the Internet without hoping to make money from it. As long as putting stuff online isn't too expensive for an individual to fund with a bit of spare cash, people will always make information available.
The only threat to this is litigation. If a large organisation threatens to sue an individual because it doesn't like the contents of his website, there's not much he can do right now. As the law gets more biased towards those who can afford to litigate, it may mean that these volunteer sites can't reliably hold objective information against the will of a big company. Slashdot can respond defensively to cease-and-desist letters because it has lawyers. Smaller sites cannot risk it.
perl -e 'fork||print for split//,"hahahaha"'
I'd suspect that most revenues will come directly from the online sales of goods and services, or indirectly as a form of dedicated advertising by a company providing it's own site. Given the widely known ineffectiveness of banner ads (I've clicked on less than 50 since 1995, and I'm online almost every day) I fail to see the provision of advertising space as a significant revenue generator.
The web provides a very good way of getting information about certain products and services, and allowing purchasing of these. The problem would appear to be selecting products that can be delivered to the customer cheaply. I suspect very few of the companys that are currently losing money on every sale will survive. The markets seem to be very relucant now to give out money to internet startups that don't have a good business plan and a real chance at making real revenue.
Companies can also use their own website to promote offline sales. A website can be a lot more interactive than a brochure. You can provide extra services to entice people back, and at the same time give them information about your products.
This is what I think is the essential point. The interactive nature of the web, and the Internet as a whole, requires something that does more than just sit there (animated gifs don't count, and tend to be annoying and/or automatically ignored). Unlike more static mediums (print and to a lesser extent TV and radio) many Internet users are used to a dynamic experience, and tend to automatically determine if the site they're viewing is of any real interest. If not, they can change to a competing source of information very quickly. If one of the sites I frequent doesn't have what I want, I can skip to another within seconds. In other mediums getting to competing information sources tends to take longer.
Banner ads don't answer the question "What's in it for me" that needs to be addressed in order to draw attention in the long term. Hits are one thing. Hits from return visitors, people who keep comming back, are another.
Colin Scott If you build it, they will be dumb...
Company B) 2 Million in revenue in a B2B space hat's projected to expand 250%.
Company C) 4 million in revenue in a portal space that's projected to expand 1000%..
Sound impressive? .coms that will quote these kinds of "exciting numbers" to VCs in order to attract capitol. What does it all mean? At the risk of being to simplistic, it means that:
(this is one of the reasons that the VCs go for products like cars and plane tickets instead of comodities like soybeans or metalica music;) There's no shortage of
Company A) Spends 1/2 Million dollars to buy stuff and recieves 1/2 Million to sell stuff.
Company B) can spend 2 Million buying stuff and recieves 2 million when they sell stuff.
Company C) Spends 4 million on stuff and revieves 4 Million when they sell stuff.
For those of you doing the math ahead of the rest of the class, you know that this amounts to a zero sum gain. Renenue is great, market share is great, but profitability is quite another matter. Jeff Bezoz doesn't mind that Amazon doesn't actually make a profit right now, he's more interested in revenue and share. It's thinking like this that will make 80% of the .coms crash hard.
___
I think what a lot of people seem to miss about the Internet is that, quite simply, people are not going to be making the staggering amounts of money that they currently make. People wonder how Amazon will ever make money if it's always undercutting the competition, but the fact is that they won't ever make the sorts of money large bookstores do - even with overheads. There is always going to be someone who can undercut people with large mark-ups, since it's so much easier to set up shop on the Internet.
We have to stop thinking in terms of the millions of dollars that middle-men make, and start thinking in terms of maybe no more that 1% of any give price.
What is needed is an easy way of leaving tips at web sites. I bet a lot of sites would make more money if it was given voluntarily, rather than making people look at stupid banner adds. Bands could play live over the web and fans could show their appreciation with a buck or two. And as an added bonus, sites that get a lot of hits aren't necassiraly the ones that will get the most money, posting an inflammatory article to get mentioned on slashdot will no longer work.
All thats needed is a safe and easy way to leave the occasional quarter. hmmm.
We'll probably see a change from todays ads-based services - the ads are kinda boring and as mentioned, they have a quite low click-rate. What I think we'll see, is that the sites will evolve into more user-based services, where the user can define their own needs - and that they'll pay a minor fee for the use of the material provided therein.
Take Slashdot for an example, i'd gladly be paying a buck a month for getting access to those slashdot-news, but that's probably not i the correct slashdot-spirit. However, there's already a few sites doing this, take a look at http://www.digitalblasphemy.com/ for example, providing high quality 3d-wallpapers (some of the featured in Eterm). There's a quite a large number of free images provided by the site, but for a small fee ($25) you can sign up for the full gallery - and you'll get permission to use the pictures on your own webside and alike. This is a great example of how one could make money of a perfectly "on-your-sparetime" website.
mats
One man's ceiling is another man's floor.
Digital advances are going to enable consumers to strip advertisements out of conventional media. Perhaps too much attention is given to click-through rates; why is simply seeing the ad on T.V. acceptable but not on the Web? I am opposed to being fed advertising pap to begin with, but at least the web based ads are not egregiously long and when I do find one advertising what I want to buy I am much more likely to be able to pursue it to a final purchase. Television ads are designed to try and make you buy what you do not need, Web ads are not able to attempt such a mental assault and are much more palatable, and thus, to my way of thinking, more acceptable, if not desireable.
There is going to be a serious shakeout in the B->C sector. Serious revenue models are going to have to be revised as investors patience are thinning. You can't open up a news-portal without seeing or reading about consumer plays burning out of cash
You might see free services, but only a few of the e-biz's in that particular market segment will be able to compete much less survive the outragous valuations and sustain the burn-rate which has been created. They will have to be very creative how they actually sustain their free services.. in the end, nothing is free.
I believe that the real opportunity in the internet is in the B->B->C market... and all the prophetic notions about brick and morter companies ruling the net space in the end, might be true.. as they have a 'Business' to sustain their companies.. not just 'Compaines' searching for investors to help them build a business.
£.02
A country that let people patent obvious technology has stupid politicians!
The problem with banner ads is that they must spell-out the product and establish honest expectation for the user before he clicks. This will never happen because advertising practices are based on persuasion and deception.
The problem with mega-store sites like Amazon.com is that they can be replaced overnight by a fleet of mom-and-pop sites. This will happen when an impartial licensing body similar to the Better Business Bureau or Consumers Union issues trust ratings for web sites.
The good news is that the power aggregators are wringing their hands behind closed doors uncertain about a future that is, for the first time, unwritten.
Let's look at things as they are - there
is only one steady service that people pay in
the Internet for - the actual connection.
Be that your provider of dialup, dsl, T1 etc,
you pay your subscriber fee. (Let's not bother
with netzero and such - they will all be dead
before time).
This is where the revenue comes from - as long
as people pay to come online providers are
interested in keeping online going. If the
sites will start to dry up, i am pretty sure
programs will appear to join providers of
connectivity and providers of information.
This in fact is how TV works in some countries -
you pay yearly TV tax and tv studios get their
share. Of course then internet will more and
more resemble one giant AOL with link providers
dictating content. But this has been the case
with every media and this one will conform
just the same.
O well...who cares.
Offer a basic service for free, then offer an extended service for a fee. That way everyone can be a light user and get worth out of the service. Then those who can find value in extened service are willing to pay. Everyone is happy. Just make user the free service is adequate.
Free as in Beer?
+Free as in Freedom?
-------------------
Free as in Beerdom!
You can basically get the same thing from a library. It's still very expensive to build a interactive web-site.. as the web goes more towards a ASP style of network and less a brochure and eLibrary..
Hopefully as time goes on the means of creating interactive websites will go down, computers will become more powerful, bandwidth to consumers will increase and cost to host will decrease..
But right now it is a very expensive business.
Start top down web agreements. Company A produces a product. Company B Sells and distributes the product and comany C's advertise and provide market information/news. Much like the Linux=>VALinux and other Linux producers=>Andover=>/Slashdot or Freshmeat setup. In the auto industry it could be Auto Manufacturer=>Online Car Seller or Dealership=>Auto Trade magazine. Not really anything revoloutaionary, just formalizing what is already in place.
You can't click through on TV adds. Banner adds. can still be used as a marketing tool even if the user does not click through. They can do this by creating brand recogition just as in tv. Who hasn't seen the VA Linux adds on slashdot.
I would not like it but companies could also create a full page add that forwards the user to the actual information. I.e. NY Times you go to the home page click on an article link it takes you to an add. page which then after a few seconds forwards you to the actual article.
Just my 2
Regards,
Tim
I wouldn't block ads out if they weren't so annoying. It's impossible to read text on a screen with some annoying animation hovering over it.
There are still plenty of ways for web sites to intermediate themselves into the value chain. Say, for example, slashdot started its own shopping mall. Instead of them putting whatever products someone paid to have in there available, they'd have only products that the Slashdot team thought were cool. So long as /. never breaks that trust, people would buy stuff.
What network cards do you guys use? That cool new toy you just covered, where can I get it? Oh looky, I could buy it from the place you linked to but who would I rather trust with my personal details?
Over the past few years, there has been a lot of "irrational" exuberance" about the Internet. While low stock prices and patent claims have dappened the spirit over the past few months, it doesn't mean the Internet "boom" is over -- there is still money to be made from banner ads & from subsciption oriented service sites, like bill pay services. There's still a lot of growth for the net, and a lot of money to be made form it.
-J
Domain Name Registrations for only $20
You already opt-in to advertisements by choosing the websites you chose. Aside from that it is very effective to just turn pictures off and simply text-browse. That way you never download or see the annoying ads.
Yes the web reaches new people you couldn't affordably reach before, but the product or service still has to get to the customer, and the logistical infrastructure that companies like UPS and FedEx have spent decades perfecting, has been ignored by many .coms.
I'm reminded of a recent interview I saw that had the CEO of Amazon on stage with the CEO of Lands End. The guy from Lands End went on and on about his companies ability to "Pick, pack, ship and track" more efficiently than anyone else. At the same time, the guy from Amazon waxed poetic about the future and market growth and free bandwidth and wireless and blah blah blah. This is an interesting lesson in how to run a business. Control the expenses under your control, and proits will flow. Don't position yourself in a place and wait for the vaporware to come to you.
___
With luck, the rank commercialization of the internet will wither, and we'll be back to were we were a few years ago, i.e. a Web built mostly of sites like you describe, and which don't require a bag of cookies and a pile of ad downloads just to see the next couple of paragraphs of useful information.
But don't bet on it. I suspect "they" will use technology that says "no cookie, no content", and similarly for ad displays. VC may dry up as the new wears off, but commercialization is surely here to stay. Lots of people think it is immoral to let you have anything for free.
--
Sheesh, evil *and* a jerk. -- Jade
I'm not certain that a company like IBM (just an example)will actually profit directly (i.e. increased sales, shipping product) from online sales. I'm sure they do all right, but even though the vast majority of the people I speak with have been online for over two years, only about 5% actually have, or will purchase things online.
I feel the way a company will profit monetarily from the internet is through increased productivity. Instead of answering inane questions about a product twenty times a day, this same person can get the product out the door. Instead of taking requests for pamphlets, the customer(or at least a majority of customers) can view the latest edition online. Instead of paying thousands to do direct mailings of these brochures, they can host a website, and mail pamphlets to the minority who don't have access to the internet.
I feel that there will be more cost savings and increased sales potential by allowing someone to fill out an online loan application, instead of wasting a salesmans time walking you through the paper application, when he could be getting a sale elsewhere.
I know this won't 100% eliminate the human contact, but it shouldn't. It should allow the customer to be more pro-active in his search for information, instead of waiting weeks for a product brochure.
regards,
Benjamin Carlson
"If voting could really change things, it would be illegal. " - Revolution Books, NY
will be the ones that sell something of value to consumer. In other words, take the cheapness of setting up shop on the net, buy a warehouse in the middle of kansas, and sell. In terms of getting more eyes, thats where the advertisements come in. In other words, thinkgeek is i site i'd never known about without advertising. And they make their money selling quite real stuff. Plus it doesn't help that they successfully target the right audience without asking you twenty questions [ahem - realplayer].
Lemure, wtf! Don't you mean Lemur?
I suspect that PayPal (which is currently mostly used for EBay auctions, I think) will be able to accomodate that niche eventually. It should be very straightforward: "To make a donation to this site, enter your Paypal name, password, and the amount you want to donate in the fields below."
Wasn't there an essay on a similar topic called "The Street Performer Protocol" floating around recently? Anyone have the link for that?
First, for those readers who aren't in the US: a 900 number is a telephone number that you call and a charge is added to your phone bill above and beyond the normal cost of the call. One good(?) use of a 900 number would be for "pay for service" calls: you call the number and are charged $50/hr for tech support.
The problems with 900 numbers are as follows:
Given this analysis, what risks would micropayments incur on the 'net? Would most sites using micropayments be porno or scams? Would some sites claim to be free, while draining your micropayment account? What about E-Mails containing HTML/Javascript that cause you to access a micropayment site? (What's this charge to "31337 roolz U"?) What happens when you find you've just sent $500 to "Pokemon freinds network"? ( BART! Get your ass in here boy!)
Submitted for your (dis-)approval....
www.eFax.com are spammers
Most people working on an Open Source program do it on their spare time. By spare time I mean time they spend not earning money while using that time. In other words, they actually spend money on it instead of earning money from it.
That's just how it is making and maintaining a web site. It also requires time and money. Therefor one would need to get the money from someone or something else, and advertisement obviously isn't it.
- cfelde
It seems the consensus is that micropayments are the way to go. I know there was a lot of work being done on this way before e-commerce began, but nothing seems to have come out recently. Are there any such projects nearing completion and/or commercial deployment? I think micropayments are absolutely essential, and are perhaps the only way that napster-esque programs will ever be semi-legal. I certainly wouldn't mind paying 50c per song if it was transparent and took one click.
First of all I'd like to clear up what seems like a misconception of the original poster. Banner ads and affiliate programs are a drop in the bucket compared to the costs of running a website. After investigating the Net scene last year when I was planning to start a website I noticed that dotcomms could be divided into eCommerce sites, pay service sites and banner ad sites. Most of the successful non-eCommerce had either been sold to larger parties (e.g. Slashdot to Andover then Andover to VA Linux, Hotmail to MSN) to offset the cost or become pay services (JenniCam) simply because banner ads couldn't cut it. heck, even rusty has incorporated kuro5hin . So even now information (non-eCommerce) websites with sizable traffic (i.e. need expensive servers, bandwidth and maintanence) cannot survive on banner ads and affiliate programs indefinitely. There is more exposition on how dotcomms cannot survive on ads alone on ZDNet
The entire everything is free idea on the Net is based around the loss leader concept. Give away stuff to gain market share then make the revenue by exploiting the marketshare. Unfortunately this is the rub, few sites have anyway to make up the revenue lost by undercharging or giving away content or product. This is now being felt by the rash of layoffs and also the large number of dead or dying dotcomms which include cdnow.com, drkoop.com, toysmart.com, boo.com, foofoo.com, reel.com, apbnews.com, etc. The surviving information/nonE-commerce sites (especially independent or pseudo-independents like slashdot) will eventually have two choices
1.)Get bought out by a larger company who either wants the site for goodwill purposes (AOL owns Winamp.com which never make back the $20 million they spent on it, VA Linux owns Freshmeat, Slashdot and freeCode.com which will make just enough to hold their own or slightly less) or want to exploit the user base in a way the original site could not (e.g. MSN buying Hotmail so that logging out of hotmail redirects you to MSN.com).
2.) The second option is to become like the only sites to actually turn a profit on the Net on information, pr0n. Charge for premium membership and giveaway just a enough to entice members. The Wall Street Journal already does this with no ill-effects.
3.) The third option is to close down. Which off course is not an option many are willing to make. Of course, if this keeps up the Net will eventually mirror the real world with it's homogenized Walmarts, Starbucks' and Barnes & Nobles' being frequented by the many while independents close up shop and die. Only a short while ago everyone espoused the beauty of the Net and how everyone could be their own publisher but with the death of websites daily (linsight.com, reel.com, toysmart.com, boo.com, drkoop.com, peabody.com, and soon cdnow.com) are we not headed for a Net that is controlled by the few? For instance VA Linux via Andover already controls Freshmeat, slashdot, and a bunch of other frequently visited open source sites and is estimated to draw 50 percent of open source/linux traffic on the Net.
PS: This post is not trying to bash VA Linux but instead is mentioning the fact that already in the real world almost everything is in the hands of a few corporate entities (the same company that sells Marlboro cigarettes sells Post Cereal and Kraft foods, Disney owns ABC television and Miramax films, AOL owns CNN and Time)and the Net was supposed to be haven away from that where opposing views and opinions were only a mouse click away. I am not sure we should be celebrating the death of that...
there is a free ISP over here in Australia called goconnect.com. While I personally don't use it, a friend of mine does and says its great. I asked about the advertising and he said he really liked it -- they were popup ads every couple of minutes which were more like TV ads then web ads.
So maybe this is another approach? I mean, TV/radio ads are all about being completely stupid and glitzy and unexpected, whereas your average banner ad is very much ho-hum. I notice some sites doing sort of little pop-up tv-like ads, and now that high bandwidth connections are becoming more ubiquitous, maybe advertising ability on the net will catch up with the advertising promise of the net.
As we switch over from the AOL/Time-Warner model of the Internet to really equalized peer-peer Internet we'll probably see the web, and the rest of the Internet moving to a model more like the Napster model where people share between themselves. I remember when the web was new and it was like that, just lots of high quality personal and educational sites. Then banner ads and spam mailers came and tried to impose their centralized corporate Spamnet on us. Now that they've seen that most people aren't interested they'll hopefully continue the current trend of backing off on the banners and spam. Large sites will probably be community projects with sponsors for the more expensive things they might need. There will still be online stores and various other ways to make money online but finally the Internet will lose some of it's Los Vegas neon lights selling everything from Coca-Cola to used panties. People who want to sell online with spam, ad banners, subscriptions, micro-payments, and whatever else are kidding themselves if they think they are going to make a fortune. Sure you can fill niche markets that way but given a choice between free/spamless and expensive/spam people are going to choose the first almost always. Call that Shoppers Psychology 101.. people like cheap and they don't like to be bothered.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
Hmmm, naviscope says 47273 ads blocked, thats a lot of bandwidth saved! Really though, who really clicks on ads? In about 5 years now of surfing the web, I have only ever clicked on one ad. That was here on slashdot for a british company selling pre-built linux systems. Adverts are not the way to pay for your website, this is *NOT* TV, and I for one would not want it going that way. F
Just like "faq" became a standard link on a website, what about a "sponsors" link. A sponsors area of a website would allow a visitor to view advertisement if they wanted to, without annoying them, and these pages could be elaborate enough to actually do justice to the sponsors. You could even be candid about the fact that it helps pay the bills of the site and encourage the visitor access these sponsor sites via yours if they do business with them in the future. In other words, be a portal to other sites for fans of your site, while avoiding being annoying. I think advertising is annoying, and it is important. Once in a while I actually see an advertisement that is informative or even amusing, but these are always on tv. I've never seen a banner ad that managed to grab my attention let alone be informative or amusing (except that one with the little monkey you're supposed to click on, I fell for that one once, duh!)
Who needs revenue? Everything should be free, right?
.. for food? But .. food is just information on where nourishment is, right? And information should be free!
Sorry if I seem a little uninformed - I've been too busy living in my get-everything-free-perfect-utopia world to understand this concept of "money." Oh, by the way, could someone give me some food? What? Pay
First of all, advertising effectiveness is one of THE hardest things to measure in the field of business. There's no clear way (currently) to measure how 'good' your ad is. Sales, especially in consumer products, are influenced by many other forces (media, store promotions, seasonality, etc.). Ad executives already know that if sales for their soft-drink jump 15% while they are running an ad campaign, that it doesn't necessarily have anything to do with the campaign. Now, with the interactivity of banner ads, some people think that advertising can be "figured out". Guess what. It can't. Click-through rates do not mean I was interested in the ad. A click-through rate means I was interested in the ad, but it doesn't mean I was interested in purchasing the product. Maybe I was just clicking ads to support the website (I do that with smaller websites). Or maybe I clicked on something that looked like content by mistake (take a look at the side columns on the front page of Sharky Extreme). People need to realize that click-through rates aren't a good approximation of wether or not the advertising was succesful. Yes, it may be "the best estimate," but trust me, it's not a very good one.
I also think that this 'click-through' mentality has created a lot of bad advertising ('Click on he Monkey to Win $20'). In order to have users click on ads, they throw in every possible gimmick that's in the book: animated GIFs, Java applets, sounds, etc.). As a firm, I would rather have a banner ad that informs, rather than entertains. If it can entertain while it informs, that's not a problem. But I'm still amazed at the number of banner ads that promise something ('Speed Up Defragmentation and 10 Other utilities!'), yet the ad itself never shows a brand, or a webpage. I'm not going to click on an ad to find out what it's about, that's something the ad should do. And if it can do that, it's done SOME service to the company or product it is promoting by increasing brand awareness.
Oh boy, now I'm way off-topic.
I think the Internet is going to stay, for the most part, free. As long as the service you are looking for can be found free on one site, you can go there. As long as /. keeps the site the way it is (free speech, free beer), I'm not going to any other site that wants me to pay for it's information. And when all the sites suddenly start charging, there's very little that will keep someone from making a free site of their own to steal customers.
More importantly though, I don't think a lot of sites will be able to migrate to pay-per-view or a monthly charge, at least not for a lot of their main content. Once someone is getting something free, they're not too likely to enjoy paying for it (some exceptions to this case exist, obviously).
If you've come this far and understood what I said, I applaud you. I lost myself after the second paragraph.
Small potatoes make the steak look bigger.
Today banner ads are usually a GIF served from some specific site, the link to the GIF is positioned at almost the same place on all sites with banner ads. This simple scheme opens up for the business of ``serving banner ads''. I think that this business is in danger, but not on-line advertising in itself.
:)
Banner ads could be served from the site itself. And they could be made to fit better into the layout and philosophy behind that site. This would bring two things: Banner ads would be less intrusive, and, they would be impossible to block. Both the advertiser and the consumer wins here. (Uh, beware, I see the win-win scenario emerging here)
Companies that today make a living of serving (and accounting hits for) banner ads, will have to find a new living. But the new model should open up for that just fine. There will still be a need for the advertiser to have some figure over the effectiveness of the ad, now that there's no longer to usual third-party involved.
There's still a third party though; the consumer. Most browsers can supply the advertiser with referrer URLs, which would give the advertiser a way of assessing the effectiveness of an ad on some specific site. The advertisers would probably like ways to verify the number of actual exposures of their ad as well. This is where the old ad-serving companies come in. If they figure out a way to act as this third party that can account and verify the number of exposures, they may not be completely out of business after all.
Isn't it wonderful seeing this marketplace mature
Thats one in a hundred. Thats 1,000 clicks per million views. How many companies can boast that even a thousand people acted on their commercial and went right out and bought something from their company? I doubt too many.
It seems to me that advertisers have the impression we care more about their ads than we actually do. And now that they are getting the true picture from banner ad stats, they're either disappointed or in denial.
Recently a bunch of Japanese manufacturers, rivals even, got together to promote a single lifestyle brand. Why? Because even though consumers remember their individual/competing ads, the consumers still don't remember what the brand was! Heh, ironic - I can't remember what the shared brand is! (But I'm not in Japan tho, so I haven't seen _any_ of the ads).
In my opinion, the "low rate" of click-throughs is not surprising. Advertisers should realise that people have lives to live, other things to do. When we watch a movie on TV, I bet that more than 99% don't really care about their ads, brands or products. Sure we may be mildy entertained by the ads, but that's about it. At best it registers subconsciously, so the brand will be _familiar_.
With click through banner ads, advertisers finally are getting a good idea of what consumers think about their ads and products. And face it, we don't care that much. Advertisers: Wake up! Your products aren't the be all and end all of our lives. Deal with it. When I wake up in the morning, it's not a 10% chance that I think of product ABC. It's not even 0.1%.
So 1% is pretty good for click through. Sounds high even. What were they expecting? 20%? Get real. As if one in five visiting a.website.com are looking for computers/printers/plush toys/etc. Doh. Most of us are visiting the website because of _the_website_ right?
They should be thankful that 1% of us are actually _clicking_ the ad. They better hope it's not because of sympathy, or begging from the website owner.
And if they keep trying that webtracking stuff, it's going to make it more difficult/expensive for them.
Cheerio,
Link.
I realize this is a little off-topic, but I was hoping someone could help me out.
I live in Cincinati, Ohio, and am trying to open my own Computer business. I'm 14 years old, and am basically trying to get some money for a 1ghz athlon I want. What I want to do is order parts from a Wholesaler in California (www.DeeOneSystems.com) build custom computers, and sell them to how a person requests they be built. The only thing is that I can't think of a name for my business. So Far I have Custom Computer Creations (but that sounds like a CAD company) So I was hoping everyone could give me some suggestions.
Thanks
I cannot really see the problem in all this. Good information sites are worth paying for, just like I see no problem in paying for a paper-based newspaper, I see no problem in paying for a web-based one. I read web-based newspaper quite often (living abroad, I can keep in touch with home news quite easily via the web), and would be glad to pay for it, if it meant getting rid of the tons of animated ad banners (which I filter, at the moment).
I think one of the problem with Web sites is that their owners think that they can afford to spend
gazillions bucks to make theit site great and that advertising will cover the costs. That's the problem. Creating a Web site doesn't necessarily cost so much. Take Slashdot for example, it started easy, with a few guys having a neat idea and doing some great coding, then it started to become more and more popular, and is now what it is. I'm might just as well be plain wrong, but I believe that Slashdot is generating money. I have a small web site myself (that only costs me web hosting and a few hours of work a week), and I hope to be able to win a bit out of it eventually (pay a rent, maybe?). It won't be a lot, but my point is, it is possible to make a site whose revenues are higher than its costs if you design it without aiming too high right away and without necessarily blowing away hundreds of millions of dollar, like some shity startups do.
If you look at other mediums of information, advertising has been consistently effective. Advertising has made radio and network television free for years. I think the problem with web advertising has more to do with the approach taken by advertisers. When you watch TV or listen to the radio, there are periods of time when you are seeing and hearing nothing but advertisements. When you visit a web page this scenerio is not the case. Ad banners are simply too easy to ignore.
If you want web advertising to be more effective, you need to adopt an advertising model more like TV and radio. Perhaps you could force site viewers to watch a Flash ad before being directed to the main page. Such a means of advertising may need to wait until people have faster internet access, but I do think we need to search for alternative advertising techniques. The ad banners just aren't cutting it.
With so much porn to choose from, the quality of the porn should go up and the sites with the best porn will be able to charge a premium for it. Slashgoatporn.org might well be one of the highest grossing web sites in the future.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Is offline...
Since 1995 when the Internet became repurposed to revenue generation for advertising companies, innovation stopped, IMHO.
Idealism, democracy, communication and efficiency were all shoved out of the way to make room for banner adds, cross marketing gimmicks, and eye candy. All of a sudden, style dominated content driven by advertising revenue.
Thank God the advertising trash heap is about to die its unnatural death. What a waste of 5 years. I'm saddened to see the salon's of the world fail. If only they'd have realised people want salon but didn't offer any way to support their mission.
Fortune magazine, on the otherhand, earned my subscription by allowing their articles on the web. And great articles they've been. Salon has equally effective reporting but have no revenue magazine to support.
The Internet is about community building, in the salon instance. All the advertising in the world does not build community. Advertising competes for the same space required to serve community building.
Until digital transactions are supported online, revenue generation will continue to be an offline function.
-r
The current content model that almost everyone follows seems to be that you put your website on a server + pay somewhere along the line for the net connection. ie provider pays. Those who want to access your site pay none of those costs.
One possible solution to this would be for ISPs to run Freenet style servers, so that content moves closer to those who actually read it. Clearly this probably means abdicating some control over content you provide; I can forsee a future where the big 'commercial' sites run off their own servers, with paid for fat pipes to the rest of the net, whilst non-commercial sites contribute their stuff at minimal cost to a distributed network of Freenet servers.
thoughts?
nosig
I remember sitting around the computer science club at U Waterloo about 11 years ago and discussing these issues. I recall that the conclusion was that you could get your catalogue out to people easily on the net (useful if your catalogue changes a lot, like a stock exchange's ``catalogue'' of goods), take orders easily on the net, but that information would eventually become an economically public good, and that other than as a means of communication, the Internet provided no added value over other models of commerce in and of itself. If communicating better helped your business (as it often does) then the internet is a useful tool, like the telephone is a useful tool, but fundamental rules about making money and economics haven't changed just because it's easier to talk to people.
Pity my honest streak didn't allow my avarice to overcome understanding and rip people off with that pyramid scheme known as Internet stocks.
Economists have already discussed how the transmission of information (bandwidth) is becoming a public good (i.e. one which is in abundant supply and which, when you acquire it, does not prevent others from acquiring it), leaving telco's (hopefully democratically controlled IMHO) with revenue for the physical wire. Selling economically private goods (your time, your vegetables, your candles) on the web will make money if it gets you more customers; using the web to advertise and deliver services or contract agreements is a good model. But, in the end, just like copyright is dead (although those being lined up on the wall and shot by the old regime might have a moment's doubt), so is the idea that you can exchange any public goods (information) for private (money) and with it the idea that the net itself is actually a money maker any more than a telephone line makes money or a discussion on the street makes money.
If anyone is making money any other way it's because they are ripping ignorant people off (a manifestation of economic inefficiency).
Maybe I'm strange, but I would give tips to a website that provided useful information. Not every time I come there, yes, but let's put this into perspective. Let's say that I'm a student, and that I desperately need a piece of information that I find on one of these "free" websites that has an online "tip jar". I go to the site, get my data, click on the "tip jar" and leave a dollar or so, and go merrily on my way. The next ten times I visit the site, I might leave nothing -- but a decently-sized information site will have enough in the way of visitors to potentially make the InterTip worthwhile.
"Sponsorship" is also an idea -- companies with employees who use the site regularly can "sponsor" the site, and in exchange they simply get a listing on the "sponsors" page, and possibly a little logo that says "This site sponsored by X." It's not a banner ad, and won't generare revenue for company X, because they'll be paying for a service they find useful.
To die, to code, perchance to sleep; aye, there's the rub. For in this code of grep what sleep may come?
No sweat. Moving elsewhere (that's everywhere) where software & business plans aren't patentable will just do the trick.
--
Here's my mirror
>> "they" will use technology that says "no cookie, no content
I've been running into this more and more lately. Can't recall all such sites, but the latest example was MS' maps.expedia.com . I visited it with netscape with cookies and Javascript off, and instead of maps got a message about turning on scripting. Having done that, I returned, only to get a message about enabling cookies. Why the hell do they need all this crap to just show me a picture?
I'm not so sure that banner ads are as dead as people think, nor are the revenue streams that they create. Lemmie provide a couple of examples:
While not a banner, this is a good one: right now, I just bought 660,000 ad impressions from a game related newsletter with a subscriber base of 220,000 people (everyone gets to see the ad three times.) Normal banner advertizing doesn't really get my attention - but, this newsletter is for people who are seeking out reviews for games, and special deals on games. Instead of being a 'blanket advertizing' campaign where I just start spending money at random trying to generate sales, I picked an area where people are actually LOOKING for things like contest, reviews, special offers, etc - IE, where they are looking to spend money. Targeted advertizing actually has a much better success rate - something that I figure that more and more online-world services and sellers will finally take advantage of.
While websites focus on general areas of a topic (for instance, /. focuses on the geek crowd, or what CmdrTaco & C. want to post, take yer pick ;-) advertizing based on that topic is still iffy. Just because someone is a geek, for instance, doesn't mean that they happen to be looking for a new Linux based server - which means any ads for new servers that reaches that particular person are pretty much a waste. In the articles themselves, however, it's much more focused. For instance, an article on MySQL & Perl would be a good place for someone to advertize a hosting service that allows MySQL, Perl, PHP 4,0, etc. You are more likely to reach your target audience. I look for more websites to start going that direction - allowing for very focused advertizing which allows for a MUCH better bang-for-the-buck.
More advanced profiling technologies, checking to see if they have already seen an ad (based on cookies), etc. will probably help the ad dollars thing. Keep in mind - while TV & radio commercials work sometimes, the same can be said about banner ads - they work sometimes. Content, how catchy the subject it, how well focused the ad is, etc. all makes a huge difference on the number of click-throughs you get.
Are ads annoying - damned straight. Some of them have been going way overboard anymore (Java and Shockwave based ads are really annoying). But does this really mean the end of ads online? I doubt it. We'll just start seeing ads that are reaching the right target group more often.
And personally - I really hope these revenue streams don't dry up. It would be a pitty for so many news sites that get so many hits to just die away.
(PS: When I released my last game, Boulder Panic! 2, I put a link at the bottom of my .sig. It wasn't advertizing for me - it was just showing off that I actually accomplished the task :-) BUT - do you have ANY idea how many people clicked on that link, and went and checked out my game?! 1% clickthrough may be right, but, even then, 1% somedays can really make a difference!!!
Davis Ray Sickmon, Jr - looking for something to read? Check out my three free novels at MidnightRyder.org
And to paraphrase my representaive in Congres (who, frieghteningly actually no longer sounds like an extremist compared to the other grass eaters there) ... if you can't make money off it, what the hell good is it?
The problem with NPI is that it will either have to be taxpayer supported and we're still in an anti-tax mood in this country (and I don't see the end to this in sight yet); or it'll have to be supported by user fees -- which will be resisted -- the whole point is to make as if this is free isn't it? Or donations and sponsorships -- you've seen public TV -- an ad is an ad is an ad. So none of these seem quite like the solution either.
So we're left with a variation on the orignal question, how do you make enough money on the internet to, as miminum pay your expenses (publishing on the net is relatively cheap but it ain't free) or, if you're inclined that way, actually support youself?
When I am confident I have the answer to these questions I will set up my webbusiness and ... well, you can imagine the rest....
I actually work for a banner advertising company so I'm quite familiar with their business models. The reason banner advertisements have such a poor click through percentage is because people on the net want to feel like they're part of a community and banner ads don't give you that. The best way of advertising on the net will likely always be word of mouth. Recent studies have shown that most online shopping is done almost completely via word of mouth. So you can say what you will about micropayments, affiliates (partner stores are a much larger thing than affiliates imho), and banner advertising but it's not until someone figures out how to make advertising on the net personal like word of mouth advertising that you're going to see great advertising for next to nothing. WH
On-line catalogs are quite effective, especially when your inventory changes rapidly. A friend of mine has had a business selling surplus sleeping-car parts (yes, there is quite a market for that), parts that he acquired while scrapping some 60 surplus sleeping cars over several months.
Well, he had an almost "real-time" catalog, showing the parts he had available, complete with pictures, he would get different kind of parts as he would work with different kind of cars, and that online catalog accounted for well over 90% of the sales he did.
There was no way a paper-based catalog could have coped-up with the various changes that happenned. In fact, whenever somebody asked him for a paper catalog, he would simply print the website and charge $20 to mail it to the prospect (subject to discount on the first purchase).
In fact, he got several of his customers getting wired (people who would not have thought about even touching a computer), as they found out that it was far more effective and hassle-free to go online...
--
Here's my mirror
CookieCop (free PC Magazine utility) and Zonealarm are two free products I use on my winblows systems. CookieCop even allows you to filter cookies set by java script. It runs as a software proxie server (duh!)
One nice thing to do is to entirely block sites that are advertisers. There are maybe a dozen of them. You would be amazed at the speed increase you get. However, a few pages will then choke because of the use of Java script. (accuweather is one where it happens at times)
so the intelligent use of proxie servers and firewalls will let you use your netscrape aggravator or your internet destroyer with java turned on, etc.
"It is a greater offense to steal men's labor, than their clothes"
I've been thinking about how to make money from web sites lately, largely due to two fairly different sites I run.
First, there is olist.com, a site for people interested in Objectivism. I've been running some variant of this site since something like early 1995, without ever directly making a dime. But I did make money indirectly; I learned HTML in creating the site, which landed this poor philosophy major her first programming job.
In a month or so, I'm going to embark on a major project to create a new type of community-moderated "mailing list" through the olist.com site. I'm going to ask people for "donations" (non-tax-deductible) through PayPal, to compensate me somewhat for my time. I'm hoping that Objectivists, of all people, will be willing to pony up to have a high-quality discussion list again. (I might also be able to sell the software later, which would be great, as I'm sure donations won't even remotely cover the cost of creating the software.)
My other site is GeekPress, a tech news site. After creating the site, I realized that advertising and affiliate programs aren't going to cut it. Why? Banners suck. They suck up space and bandwidth. And their long-term viability as a source of revenue is doubtful. And affiliate programs just don't make enough revenue, unless the site is directly related to what's being sold (like my Nathaniel Branden site). So, I can ask for donations. Yeah, right.
But there is hope. Perhaps GeekPress can, as my Objectivism sites did, propel me into a related career. I have a strong background in analysis, writing, and public speaking from philosophy. I have, through maintaining GeekPress (or more precisely, by reading so much tech news that it makes my head spin), a pretty good grasp of where technology is headed, particularly given our legal and cultural climate. And I have noticed that people seem hungry, given the relentless speed of technology, to make sense of the changes happening as a result of new technology. So, if I can manage to spin out engaging and insightful analyses of tech news to be published elsewhere, I might be able to make some money. And that money will be, somewhat indirectly, the result of my work on GeekPress.
I'm sure that this "related career" model doesn't work for every free site out there. But it has surely made many a site developers a great deal of money, even if they don't quite realize it.
-- Diana Hsieh
-- Diana Hsieh
GeekPress: The Weirder Side of Tech News
If you can remember the name of the vendor, try http://report.andover.net/cgi-b in/ad_current_ads.pl.
Another model could be a variation on the public/TV radio model. "If you want us to stick around, you'd better send us money" tele-thon style every once in awhile .. combined with a street-performer protocol style system may work.
Does everyone have to make money on their web sites??? People should make money by selling products...Not content..This "get rich quick" shit is really dragging me down...Get a job people -- and if you want to pay $20 bucks a month for hosting, and run a website for a hobby -- than go for it...
IMHO
(+1 Funny) only if I laugh out loud.
Nothing new or novel below
I think that the (consumer based) sites which are going to make money online are those which fall into one of the following categories:
1) they provide a superior way of performing some sort of task (i.e. online banking or news feeds)
2) they provide an equivalent service but their market segment is composed of "tech savvy" people - e.g. computer components suppliers.
3) their site provides an integrated discussion/community area and goods purchasing forum (i.e. online building suppliers with an associated DIY site).
4) they can genuinely offer savings over traditional stores, something which (once you factor tax breaks) only a few online businesses actually achieve.
Some sites fall into several of these categories - for example I would say that Amazon fulfilled almost all of them:
* you can search for specific titles rather than having to physically hunt through the shelves
* the ratings and suggestions systems make it easy to locate new books
* I suspect a significant amount of their business is in computer literature.
I'm a very long way from convinced that an online shop which is just "online" will ever be particularly useful for a small business. Consumer hubs and price comparison services make it very difficult for a small business to actually generate very much interest in their site let alone generate many sales, and what many
Like I said you have to add some value with your site if you want it to make money - and I think that this is what the VC community is just waking up to - of course I'm not a VC so maybe that's just an impression from the media.
Other people in this discussion have talked about tipping sites or selling very low ticket goods, the problem is that presently (in a distributed environment) its not very easy to process those small amounts. Online payments really need to be authorised against something or the fraud risks become enormous - now this is either by using a traditional bank account which incurs minimum authorisation charges (typically around 5p which makes truly micro payments impossible) or against some form of online stored value system (either developed as part of your site or externally i.e. Beanze).
However micropayment solutions are still a long way from pervasive and I'm not sure if consumers are really interested - people like to have a single account that they keep track of and having to occasionally charge a separate online account seems like something of an overhead - perhaps if the account was set up with a direct debit so that your online "charge" was transparently topped up when required it would be easy to use - but then you run the risk of huge bills being generated if the architecture is compromised.
In short I'm not convinced that micropayment based revenue is going to be practical within the next few years - I'd be happy to hear different but I just don't see the social or economic hurdles evaporating.
just thoughts
Tom
Some useful sites do cost a lot of money to maintain. It would be handy if the web site's users could defray some of these costs. They are the ones who visit and enjoy the site after all.
Most sites will remain free, published as labours of love, but if I site needs my support I'd like to find a feasible way for me to give it.
If you don't want to contribute to this discussion, fine. But then why even click on the link?
Yogurt
...Micropayments... Now Jakob Nielson is a loud-mouthed bastard who I heartily disagree with on some topics, but he's right about one thing. There needs to be a widespread simple method that allows us to make micropayments, like 2 cents a page or something like that, so sites with info that takes money to produce can make their profit.
I know that most of the OSS people don't believe that you should pay for information, but if it were so, chances are whoever pays your salary would be out of business, so you'd be digging holes or working at woolies to pay your bills.
-Gfunk
Send lawyers, guns, and money!
> You can basically get the same thing from a
... look at the thousands of
> library
Get the same thing from a library? Unlikely.
How many libraries can you visit in 2 minutes? How long does it take for you to find stuff from libaries?
I've not set foot in a library in 7 years and I don't miss it. elibraries? The web is already my elibrary why bother with others? Dejanews, Altavista and Google beat those klunky library search terminals and paper indexes any time. Better speed, scope, features etc.
> It's still very expensive to build a interactive
> web-site.. as the web goes more towards a ASP
> style of network and less a brochure and
> eLibrary..
> man-hours that have gone into creating Slash..
Doh. You don't have to write the whole library. You just have to write a page in it.
If the page is useful, it'll eventually be found. To make it easier for search engines and people organise stuff well - put truthful and accurate keyword hints, put dates in.
As long as the page has useful info it doesn't really matter if it's not a singing and dancing website.
If you want to sing and dance (and do it well) it's going to take a bit more effort than just saying a few words. Technology isn't going to help that much, esp if you still want it to be _your_ song and _your_ dance.
Cheerio,
Link.
p.s. I suppose one of the roles of real world libraries could be to cache, index and archive the data before it vanishes. There's a lot of potentially useful info vanishing.
If the price is right and the information is valuable, then the public will pay. I pay to subscribe to Thestreet.com because the insight by the writers there is easily worth 20x the amount I pay for it.
Now that I think about it, I sort of wish I could put a tipjar on some of my Themestream articles, like the one about Jon Katz, but I think that might be a violation of contract or something. But at least they pay me a dime a hit, and they don't seem to have any banner ads so far (I imagine they might add them once they get out of their trial period, though). (That's another way individual authors, at least, could make money off the web, I suppose...)
Another interesting new model built on similar ground to the Street Performers' Protocol is the Storytellers' Bowl, which is going to accept PayPal and publish stories on a supported-by-patron-donation basis. I'm really looking forward to its launch.
And by the way, for whoever wrote the copy quoted in the story blurb--Junkbuster isn't new; it's been around for several years at least.
--
Editor Emeritus and Senior Writer, TeleRead.org
I've heard that there is actually a mug-manufacturing company that will set up to sell mugs with logos of any website/webjournal/whathaveyou on it, and the webjournal owner takes a cut of the profit. I don't know the name or location just at the moment, but I know some of my journal-writing friends have been considering using it. (If someone knows who I'm talking about, tag it on in a follow-up?)
--
Editor Emeritus and Senior Writer, TeleRead.org
The obvious answer is that the web should follow the TV based model of advertising - Subliminal Messages! Why is television advertising FNORD! effective? I don't think it's because we watch commercials and then make a balanced, logical decision to purchase the product. It's because we are constantly bombarded with consumptive (as in consuming, not TB) pressure. You think I drink Coke(tm) because I like it? Hell no! It tastes like shit, rots my teeth, and makes me fat. I drink it because I have been programmed since birth to drink gallons of the stuff.
The only way to get ads to work online is to bombard the consumer, not just have these puny little banner ads. Maybe have branded web sites, like Redhat's User Friendly, or Mountain Dew's Slashdot, where ads are integrated with the content. Imagine:
Posted by Hemos
SomeGuy writes "check out these new low power Intel chips, they're hella cool!" Wow, that's almost as refreshing as the caffeine packed Mountain Dew that I'm drinking right now.
This could easily be accomplished with something like the askjesus.org filter, so that existing web sites don't have to be changed. As long as the user isn't presented with any alternatives, they will have to expose FNORD! themselves to advertising.
Mark my words, the web will become a uber-capitalist wasteland in 3-5 years!
I don't remember any banner ads on any Gopher sites...
Scuttlemonkey is a troll
With the draw of the web being free information, banner ads stand out like a sore thumb. Not because we're all cheapskates, but because really stupid and obvious marketing ploys are out of place. A cute chick with a flashing "HOT" next to her. Punch the monkey. Fake polls ("Do you hate spam? Vote now!"). It's all so *dumb*, in the same way that most spam is (Make money fast! Lose weight overnight!). Attempts by people to promote their web sites in sly ways--"Hey everyone, I just stumbled across this awesome new site!"--are equally brain dead. Advertising has always been like this, but it's just never been so obvious against a contrasting background as it is on the web.
The e-literature website Mind's Eye has an interesting model. You have multiple ways to pay for a story, including buying it by credit card (their prices are quite reasonable; most short stories are 35-70 cents each) or reading it interspersed with banner ads. Their story-serving system is smart, too; no ad-view, no further content-loading. I hope that sites don't start using this tech in general; Mind's Eye's use of it is legitimate and one with which I cannot argue (they have to be paid for their content somehow; if you don't like banner ads, you can charge it), but if sites started thinking they were "entitled" to banner ad revenue, that could be a problem.
--
Editor Emeritus and Senior Writer, TeleRead.org
The answer here is simple. By offering goods and services that bring convience or benifit to consumers. Online businesses should be treated no different than meatspace businesses, except with a web-based interface that provides 24-hour access without the overhead of a brick and mortar.
A solid business model is the key. If the company is trying to make the business work, rather than cashing in on the "dot-com" frenzy, they will survive. Nobody but Yahoo or C-Net can make money on advertising.
As an aside to this: In my last round of looking for work, I received three offers; all three from start-ups in Menlo Park. I chose the company that, to me, had the best future. The result: The company I work for now is the only one of the three still in business. We will be going public later this year, in spite of the stock market dry up, as we have solid business practices and offer services that bring value to customers.
Having been sucked into the wonderful world of eCommerce, I've been spending a lot of time thinking about the very same question. It seems to me that when the shakeout takes place, we will probably have the following sites left:
/., the developer sites at Apple and Microsoft, and many sites set up and run by open source advocates who aren't interested in making money, but are instead interested in the good will running such a site generates.
1) Goodwill sites. Those are sites which are run at a loss by a company who is interested in some form of good will. In this category I would lump sites like
2) Service sites. These are sites which provide a time-saving service or provides a service which would otherwise not be available by going to the local mall or grocery store. In this category I also lump merchant sites: as the fascination of merchant sites has declined, all that is left is the service of obtaining difficult to find or difficult to obtain merchandise, usually for a premium. In this category I would include sites such as Amazon, Fatbrain, and HomeGrocer. (Amazon and Fatbrain provides the service of allowing us to quickly find otherwise impossible to find books such as programming or technical books--but at a price that is, in the end, about a buck or two more than if you could have bought the book at the local bookstore. HomeGrocer provides the service of home grocery delivery--but at a price that is, in the end, about 5% greater than buying the groceries at the local grocery store. HomeGrocer is a reasonable example of this because, as you order more and more products, a "favorites" list is generated that allows you to quickly, in about 5 minutes or so, reorder those same products--a typical grocery shopping pattern. So the service HomeGrocer provides is delivery and time savings.)
If you are a merchant site and you are not providing a valuable service beyond shipping crap to someone, or you're the on-line version of your regular catalog (such as Victoria's Secret's on-line web site is simply a browsable version of their catalog), IMHO you're doomed to failure.
On the other hand, if you do provide a valuable service people are willing to pay for, you'll do well just as long as you remember the "three year rule." The three year rule, which everyone in this "modern, faster than the speed of light web world" where time appears to be measured in negative dog years, is that no matter how good your business is, it will take three years to establish a solid clientel. For some reason or another, perhaps because they were blinded by the shiny bobbles of web technology, otherwise intelligent businessmen thought they could start a web commerce site and establish clientel in 2 or 3 months--and that just does not happen. It takes three years to establish a business, no matter how good you are, if only because it takes three years for people to get used to using your service. That most web companies don't last half that long speaks tons about the short-sightedness of the people who run those companies.
3) Closed-network B2B sites which in an earlier era would have been done using a mainframe coded in COBOL and a bunch of VT100 terminals. I'm currently working on such a site. The site is structured as an eCommerce web site, but from the business model perspective, all we're doing is bringing out the business's existing database system to the web in a password-protected web site which permits their partner companies to connect and order product.
Of course the one group of people who will make money in the future of eCommerce is the programmers and software tool developers who are helping to build all this stuff. Just so long as you negotiate a good contract that doesn't screw you up-front so you can be screwed when the company founder's hair-brained idea doesn't generate a multi-million dollar IPO.
I work for a small development company. We do small ecommerce sites ocassionaly. They usually do well. In some cases, these people had a popular physical store, no more than 1 or 2 shops, and their online business blows their store revenue away. They don't make money with banner ads or anything like that. They have a niche, I suppose.
I'm often surprised when my friend in similar fields tell me about how these large estore sites, like Amazon or Buy.com aren't make a profit.
I for one am glad the investor cash is running out. All the sites I deal with really have something to offer instead of fluff and promos. Investor cash is the reason I have to sometimes work with complete imbecils making great salaries. There are a lot of dot comms out there crossing their fingers, hoping to get bought. A good friend of mine works at one, and their deal to get bought fell through. Where are they now? Everyone's quitting the company, the few people there who care are frustrated by all the work they've put into the working parts of the site, and to see it go nowhere.
As for info sites.. I'm not sure what the issue here is. There seems to be plenty of info still around. Take warpig.com, info about paintball, their site isn't too jazzy, but it gets the job done. I don't see why any change in the net would cause them to go away. I suppose some drastic legislation might. I haven't found any of the info sites I frequent closing up.
Let's say that one domain, or even three or fifty controlled all of the advertising on the Internet due to patents. While junkbuster is a godsend, no third party software is going to stand up to the simplicity of simply firewalling these offending domains.
Internet advertising relies on the same things as distributing DeCSS: A massive distribution of the ad content so that it becomes hard to block it.
Already, I've been bitching at the sysadmin at work to firewall incoming traffic from doubleclick.net; these guys have got a ton of traffic coming from that one domain, and none of it is useful to us. Furthermore, I know a lot of sysadmins who ALREADY block doubleclick.
What's the obsession with click-throughs?
Newspaper ads and bill boards don't ask me to drop everything and immerse myself in the world of the advertiser -- they just inform me or build a brand.
For example, I don't actually want to go to Coke's website but I can easily see a Coke banner prompting me to walk to the nearest can machine and buy one, if I feel kind of thirsty.
That wouldn't produce a click through, but it would produce revenue. I suspect the problem is that becuase the click-through measure is available, companies expect click throughs or believe that their campaign is failing, when in fact it may be having an effect.
If anyone did have a solution to the problem of how to really make money on the net, why would this post it publicly? (Oh wait, they could share their real valuable money making idea w/ the entire world, on slashdot.)
In other words, this entire thread is a red herring (not the magazine, though that is a red herring too, literally speaking, ironically enough). I wonder how many journalists scrum through this stuff for "insights".
Hmmm. After careful consideration, I can't help but agree: The Wall Street Journal is a pr0n site.
"I came here to kick ass and chew bubblegum. I'm all out of bubblegum." MSE USC APX AIA CSI CASp
Good information sites will be able to charge money for their content. This is not as complex as it looks: 24H-on home connections are just around the corner, and such connections give you a surefire way to identify the user.
Already, products like WiSP offer websites an easy way to charge customers with small-to-medium amounts, without the customer having to provide his credit card number or any other information. It works by having a software installed on the ISP's computer (so if you're connected to an ISP that doesn't run the software, you do have to provide your credit card details). The charges are added to your ISP bill.
As the difference between "telco" and "ISP" keeps on vanishing (IP telephony means an IP connection is all you need), this becomes more and more like 1-900 numbers; think of them as "1-900 URLs". 1-900 charges are added to your telco bills; micropayments to websites will be added to your ISP bill. This is not an exact analogy, though: unlike 1-900 numbers that do everything to keep you on the line by stalling, here you know in advance how much you'll be paying, and what for.
- Tal Cohen
Very good point. It amazes me how much people will spend, just thinking they can make money by advertising.
Hopefully the successful sites of the future will be started by folks like you and I, just doing it for the fun of it.
I have (what I think is) a good web site idea myself, and I've already implemented most of it (in a couple weekends) and told a few people. The comments so far are positive. Am hosting it at home. Cost to me: Zero. I think it may be able to bring in some revenue at some point, but I'm not worried about it until that becomes practical -- WITHOUT annoying ads.
e4, you have absolutely no clue. It's obvious your history of the Internet starts at about the time Gore invented it. The lockdown has begun, so instead of asking "How do I turn a buck on the web," you should ask yourself "How do I ensure free and unimpeded information exchange?".
Then the next thing I know, there are laws passed to limit my freedom from viewing thier crap. Imagine using junkbuster to filter content being called "subverting commercial revenue" and made a federal crime. Wait and see...
Well, if the movie studios and recording industry can purchase a law that disallows reverse engineering (ie. DMCA) then I wouldn't put it past web site owners to do the same.
Fortunately, US laws have no jurisdiction outside the US at present...
Would the idea of 'shared' banner ads be attractive to advertisers? Rather than paying $5-$10 cpm to have a single banner on a site, if that banner was visually split, I'd be sharing the real estate with another advertiser, but we'd both be getting better placement than we could afford singly (theoretically). A clik would take the visitor to a combined page, with descriptions about each company's service/product and links to each separate company. Ideally the two would be related somehow (servers and training services, for example, or sound cards and games) but might not have to be.
creation science book
Female Prison Rape in NY
I think e-gold is the best currently available system.
;-)
E-Gold:
-is up and running (unlike almost everything else)
-is internationally available (unlike PayPal), and supports conversion to and from several currencies
-needs no special software to either send or receive
-charges small transaction fees (1%, to a maximum of 50 cents)
-can be used for micropayments
-supports a form system, so you can put a page on your site where people can both pay and leave a comment
-is easy to fund (for example, this place, lets you fund your e-gold account with your credit card; slower methods are cheaper)
-is free to sign up for
However, it works in precious metals (gold, silver, platinum, palladium), not cash. Personally, I prefer this (though I trust silver to retain its value more than the others). If you don't trust precious metals, you can always just buy it as you need it, and OutExchange (have them send you a cheque for the current market value) whenever you have more than you intend to immediately spend.
I'm not sure I trust it for pay-for-view pages, but it certainly seems adequately secure for donations (as long as you pick a good password, and use a web browser with good 128-bit SSL). It also seems to be quite private, though it doesn't support truly anonymous payments.
Go sign up for free.
Feel free to tip me for this valuable info
I'm account # 134343
I think micropayments are the key to survival for many marginal sites. but I have not heard much on that front for a while. I worked on a stored-value card micropayments venture in the mid 90s, before the Internet was widely used by ordinary folks. As a stored-value card, the only record of the value was that contained on the chip -- one chip card could transfer value to another through a device or over a phone line in a secure fashion (they seemed to have their act together security and crypto-wise, though I that's not my specialty) without leaving any record -- the Govt wasn't thrilled about that. The venture was owned by a consortium of major banks, and that seemed to slow progress somewhat -- they weren't exactly operating on Internet time. Additionally, I am not sure they had a good revenue model of their own. It is a shame it never took off, because it could do true micropayments (fractional cents) for essentially no marginal cost and provided anonymity close to that of cash. They did not focus on the Internet until late in the game -- I remember one of the late revisions to a document describing their product: "It could also be used to facilitate payments over the Internet or the Intranet."
Web sites do not cost much. You are given space from your ISP, you can set up a server on your Cablemodem or DSL connection.
If your site is so popular that you find the traffic is too much for your connection but cannot afford better, doubltess many people wouldn't mind mirroring your content.
Now, if you think about it, the amount of bandwidth available to home users has increased a fair amount. What's to say it won't continue to do so? By the time internet advertising ceases to be able to sustain the huge bandwidth requirements of something like Slashdot, that amount of bandwidth might be the norm, as it would be required to start doing proper video and all that.
Just because many sites waste that bandwidth doesn't mean that a site with just useful information and a bit of formatting can't still exist, and it could exist for near-free regardless of traffic since the bandwidth is there.
Or am I missing something?
This one is even better than junkbuster.
Here
I think you have a good point but what happens if the site gets popular and starts eating up the hosting service's bandwidth? The fees will start to rise really quickly and the site may have to scale back or go under if there is no source of revenue that helps offset the costs other than the maintainer's salary.
Even worse, suppose you're writing OSS and you want to post your code to your site. Say the code is 512k (we'll use this just cuz it's 1/2 a meg). If you get 200 downloads that's 100mb of monthly bandwidth used up right there. Now say there are 8000 or 9000 downloads. That is most if not all of the bandwidth allocated each month by most of the hosting services I've seen.
The worst part of it all is that if everyone just clicked on a banner once or twice a month it would help get the sites the revenue they need to stay afloat. Blocking the ads with software only makes it harder for sites to raise revenue and of course that leaves less incentive for people to maintain free sites. Blocking popups is certainly justified but banners embedded in the page is not.
Also what would we do without many of the free services like tripod and geocities? They are the easiest ways for people to publish content online. If they go under then much of the free speech hype given to the web will be gone.
Why use a regular "old" library?
Because they work. They have real, useful, usable information in them.
Sure, the web is great for some things. If I want timey news, or up-to-date help with a computer problem, the web is the place to go.
But if I want thoughtful histories of the Civil War, insightful biography, in-depth commentaries on the Divine Comedy, detailed information about Olduvai Gorge archaeology, or a thousand other things, I troop down to the library.
Don't get me wrong, I look forward to the day when all the books in the library will be freely searchable from a computer terminal. That revolution has largely already taken place in my chosen field of neuroscience, with all the major journals available online. But until that day, be real, be practical: go where the information is.
Go to the library.
Banners not making enough revenue, VC drying up,
now junkbuster.. and so on and so forth.. there
will be major shakedown, majority if not all
commercial sites will die.. Nonsense.
Companies, as well as VCs, look 10-20 years in
the future. Internet is not going away and it's
not reasonable to suggest there won't be _huge_
money to be made on it. Sites are trying to get
as many users right now while at the same time
trying not to run out of money. Why are they
going so to running out? Because they know that
headstart advantage is a too good to give up.
If VC does dry up a bit (it may have already),
all they have to do is cut down expenses. Spend
less on ads, fire non-essential people, replace
NT systems with linux or BSD* boxes, and so on.
Some companies will make a few mistakes and file
bankruptcy but their share of users will be
immediately accomodated by luckier or better
dotcoms. Life goes on.
Now to junkbuster.. if this is seen as a real
problem at some point, ads will be put in a way
that is indistinguishable from regular images.
That's all there's to it, and probably won't be
necessary anyway.
Don't we also forget that expenses are going
down? Hardware's getting cheaper, software - too,
bandwidth - too; even workforce will get cheaper.
One thing won't change though.. there will be
people predicting impending armageddon after each
thunderstorm.
-- ATTENTION: do not read this sig. It doesn't say much.
There is a service in the process of being offered via an organisation called smart-cash that WILL enable micro-payments against you telephone account. It is secure, runs on *nix and provides content that costs you to see.
The organisation has links with enough major telecos to ensure that any surfer from any country around the world (dont forget you Americans cant figure out that the world is more than the East Coast to the West Coast ) can click on the smart-cash icon on a web page, be disconnected from their current session , and connected to a pay per view session, and agree to it so that payment is made against their telephone account.
I see some interesting situations for Internet Cafes !
Any just wait till the boxing fan gets his / her telephone bill after watching the latest HeavyWeight Championship of the World fight and starts spitting tacks about the $200-00 charge for the fight.
Credit cards wont match the transaction cost and have to find a new model, probably buying out the product. As the internet evolves older methods of business are going to lose their appeal to corporates, simply because each transaction cost is too high. This provides a new payment model for the 21st century.
The purpose of micropayment technology is to reduce transaction costs enough that you can do things like charge a penny for reading a page. Credit cards have been the primary payment mechanism because they're fairly universally accepted, and many of the micropayment systems use them as a bridge in and out of the money system, but use variations on crypto digital cash, green stamps, small-denomination accounts that only pay when you aggregate enough tokens, etc. to avoid paying transaction costs except when you've got enough money to make it worthwhile.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
so it takes real investment.
About three years ago I decided that I wanted to build a directory of training services in the UK. There
were several reasons for this: I wanted to sell my own training and was finding it hard to break into the
market, I wanted a demonstrator project of (at the time) leading edge technology and also, hell, I just
wanted to to do it. So I and my colleagues built TrainingPages. Unlike other content-oriented sites we don't
maintain the content - the training companies do, by signing-up and editing their own stuff. The idea
for that was honed by looking at few of the lonely-hearts sites. That makes maintenance a
half-an-hour-a-month job for us.
To win in the market we had to be comprehensive and we didn't dare charge - so the site has always been
free to sign up. As a result it has consistently accumulated content and is now probably the UK's leading
directory of its kind.
By being free it has frozen out some high-funded competition, including a vast attempt by British Telecom
(the equivalent of AT&T) to come into the market and eat us alive. However, they just couldn't compete
with free so they gave up after six months. For us, since the training companies do the maintenance, the
only cost is our bandwidth and we can justify that on the spinoff we get on our consulting - when we go to
see a customer on a sales pitch and they say "what have you done" we just have to point to TrainingPages
and they go "oh, yeah, right, OK".
We introduced the idea of a service fee, paying for sort-to-the-top of searches, the ability to add your
company's logo to the listings and a couple of other things. For a year, nobody wanted to know. Now we get
almost daily calls from people wanting to sign up for that service - we NEVER call or try to sell it. The
site has moved into month-on-month profit and in about another year will have recouped its development
cost and really be in profit. My guess is that fully costed, we were initially out of pocket by about USD
$150K, but of course since it was done on the cheap and when we didn't have fee-paying work, the real
opportunity cost was probably nearer USD $30K.
We are now doing pretty much the same model with the Geographic Search Engine Somewherenear. Again, it's worth the effort just for the publicity and
consultancy that it brings in, but this time around we got lucky and hit the WAP wave - it took a day to
WAP it up (see the writeup at
our website). By being one of the first on
the block with WAP content that is actually useful, we have got loads of press and followup that we would
never have got any other way. The pinnacle was getting an interview on BBC Breakfast TV (it's still
running on the World Service) and consequently lots of interest in our development services and also
serious enquiries about licensing the search engine and mapping code.
Overall, I'd say that there some important lessons. Figure out how the site can be a benefit even if it
never makes money. Then do it right anyhow. Pick the meanest, cut-to-the-bone cost profile that you
possibly can. Starve the other bastards out by doing everything that they think they can get a penny for
by doing your bit for nothing. Exploit the fact that you are free and starving to get as much
publicity as possible; journalists are more sympathetic if you don't have megabuck dotcom backing but
sound as if you have thought it through instead, they like quirky. Sit back, wait, and if the public DO
decide your site is worthwhile, layer in a few value-adds that your serious users will pay for - if your
cost model really is cut-to-the-bone then you will start to turn a profit anyhow. Eventually if you are
smart you will figure a way to make proper money from it, but don't get greedy and those billion dollar
valuations were always way off. On the web, there are few barriers to entry. It's always easy to undercut
someone with high costs, so start there don't get forced there. Do good stuff and the world WILL follow.
Aim to get rich slow, if at all, and don't be disappointed if retirement in luxury doesn't follow within
months. The respect of your peers is worth a ton of money in the bank unless you are deranged. Hell, how
much beer CAN a man drink?
How about non-intrusively asking for non-mandatory micropayment donations?
Access would be free, but at the bottom of the page it would say, "click here to send the author of this page $0.10 / $0.25 / $1.00 / $5.00"
This is the "street musician" financing model... might support a lot of one-person websites.
Look, let me sound off from a probably-not-unusual position- I am a dotcom. Literally- I have 'airwindows.com', have had it since May '98, and that's where I keep my stuff. I have linux XPMs there, and some desktop pictures, and actually stories and novels I wrote (well, one finished novel and two unfinished). I have the software I use to remind myself what's going on each day, and the software I use to generate the site from a bunch of flat-text files, and I have the GPLed source for the programs.
I pay $45 a month to my ISP for this plus my dialup account. Some of that is extra megs of space at about $1 a meg- you can see why I turn to mp3.com for my music ;) but the site is not ABOUT paying ME- _I_ pay for it, because I want it to be there.
Where is the need for ads, for micropayments to force any readers of my books to cough up a halfpenny for each chapter? What the hell? I don't get this. If you have a barbeque for your family do you charge each kid a quarter for the extra cooking you do for them? If you go down to the town swimming pool and take pleasure in doing fancy dives or showing people how to do the backstroke, do you then charge them a nickel? There is something crazy wedged into the collective unconscious about this sort of thing, and this talk of micropayments really, really highlights it. _WHY_ is it a given to some people that if I write little poems and put them on a web page, I must therefore be in favor of billing people a penny to see each one- and flaky or 'amateur' if I choose not to? This is nuts, just nuts.
(p.s. first 200 karma! woohoo! yay! and there was much rejoicing! Quick, somebody moderate me down and make me go "Wauuugghh!" as I get dragged horribly _back_ _under_ the double century mark! let's have a war between '+1 Funny' and '-1 Fscking Karma Whore!' moderations! *hehehee* do yer worst, I just laugh at all that anyway :) I promise if I get a '-1' to make a followup post saying 'waugh!', hit me :) )
Exactly. There is no equivalent to clickthrough in TV ads, magazine ads, billboards, etc. Web-based companies have gotten so caught up in the idea of instant gratification that they've forgotten that creating brand recognition requires time no matter what medium you're using.
They have been depending on the equivalent of impulse buying. This which works all right for selling small items like candy bars and tabloids at the supermarket checkout counter, but isn't quite as effective for anything larger.
Anyone running an ad blocker, that's who! And there's the point: clickthrough is not a useful statistic, but unique loads (the number of different people who load--and therefore supposedly see--a banner ad) is. Just like how billboards and TV ads work. An advertisement should advertise a product, it shouldn't be thought of as part of the store.
This would be fairly easy to circumvent.
---
Zardoz has spoken!
Oper on the Nightstar
Most consider the web as it is now are free but in fact lots of niche professional services are not. They require logins and for gain access you're to pay multimillions US$ per year. The university I am at subscribes to a lot of academic database search services. Basically you can search on conferences and journals online and you can download most of the articles as well. I once talked to a librarian and she told me they paid a few millions per year to IEEE for the IEEE publications database.
Application service providers stand to reap real revenues from the current trends manifesting themselves. While individual users may be reticent to pay for services, businesses are more than willing to pay subscription costs for services, if they stand to save money by eliminating support and administration costs.
Shouldn't company email, scheduling, and helpdesk just be web apps that don't require client-side maintenance?
to mail me, first remove the evil spam.
Although the transaction fees within the e-gold system aren't bad, it's pretty expensive getting money in and out of the system (InExchange/OutExchange). If you put money in and take it out again, you lose about 4%. That's very steep by any standards, except possibly compared to those currency exchange kiosks at airports...
If you read Love's rant (a five-pager, given during a speech to the music industry: *very* well-spoken and filled with startling facts), you know that most artists get screwed over to the point of being dirt-poor.
I think one of the solutions is for music artists to start releasing their works as lower-quality (FM radio quality) freebies, and to sell their own CDs and merchandise on-line, along with high-quality MP3 releases.
I'd love to be able to sample a ton of music for free, even at FM quality. And I'd be more than willing to pay even a buck a song, if I got it in CD-quality format, ready-to-burn. And I'd *LOVE* to be able to put together custom CDs of an artist's work and have them mail it to me.
And for the FM-quality stuff, I'd even be willing to toss money at them, as long as it was optional donations.
The music artists would benefit *greatly*. They currently get something like twenty cents on every CD sale. Selling me one song is worth five times that!
How do they get known, though? By offering their music for free, and by setting up thematic radio stations. Play the popular artists, but sneak in the newbies.
It's all completely possible to do *right now* -- all it takes is a good, coordinated effort that isn't aimed at ripping the artists off. They've been stung enough to be *really* cautious of pie-in-the-sky BS artists.
An open-community project would probably get a bunch of them interested, for starters...
--
--
Don't like it? Respond with words, not karma.
After I read the article that was linked to this topic, I feel that in order for a .com to survive, the owners will have to sit down and come up with a new strategy. Many .coms today are going under because the owners did not have a business plan to back up their ideas and turn them into a profit.
Last year, the rules of e-commerce were to spend money and get hits. Today, the rules are to spend less, and retain customers. The way that this problem can be solved is to offer incentives to people who shop at a website, or to improve customer service.
Questions? Comments? Compliments? Complaints? E-mail me!
"My only fear is that the AOLs of this new media world will try to control this ability to self-publish by making the process more difficult and expensive." Um, no, they'll make it incredibly easy with templates and stuff, so everyone can put up generic little webpages and then be all proud of themselves. They won't go further than that, and if they try, they'll be hit with ToS violation thingees... It may become expensive to self-publish, but it'll never get any harder than it is now...
--
Peace,
Lord Omlette
AOL IM: jeanlucpikachu
[o]_O
They have to pay credit card fees to make those charges, and they give away about $45,000/day to new users (about 9,000 new users per day, getting $5 each for joining).
Don't get me wrong, I think the idea can work. I just don't think they're making money yet. I also wonder if they will ever be truly international, being based on credit cards and such. Unlike e-gold, they have to be able to chase down cases of credit-card fraud and suchlike.
People think "oh no! 1% click-through!"
But these people are not seeing the big picture.
Newspapers and magazines have NO CLICK-THROUGH. And they are still in business. Business will still want people to see there names a lot, even if the people who see their names don't go to their sites.
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
One effect that has to be factored in is mindshare and competition. companies engage in lots of activities that bring zero revenues but without which revenues would soon be zero.
;-| ) seem quite bright.
This seems like a paradox but is actually a logical outcome of competing on a limited resource.
Imaging a market of delivery services that use stagecoaches on the day the first car is invented. Transforming a coach service to a car service is going to very expensive and will probably not be worth it in the long run, because all your competitors will do the same and you will probably end up with exactly the same market share and revenues. Yet you will convert your services, because if you don't you will be wiped out.
Consider News providers. The global amount of news consumption is limited by the number of people and the fact that most of them most also work sometimes. However, market share can be stolen from competitors by all kinds of tricks. A website with free information increases the producer's mindshare, hence its apparent importance as a forum and may thus make the paper more attractive to advertisers and readers. However, sooner or later all news producers realize that. At that moment, a free website offers no longer any competitive advantage. Yet because a free website has become a standard element that defines a respectable news provider, providers who scrap their free web page risk losing a lot--respectability, faith in their future, mindshare and eventually revenues.
This is the beauty (or perversity) of technological advancement in a competitive industry. It is an offer companies can't refuse, even though they will gain little from it.
So I believe we are likely to see expensive informtion being provided for free by companies who prefer that you get the information from them rather than from anyone else. Add to that information owned by non for profit organization, including governments, and the goodwill of publically minded citizens, and the prospect of free information surviving banner ads ( I assume you mean that big JUNKBUSTER sign at the top of my screen
Of course monopolists are not bound by that logic. The WSJ has a unique niche for the moment, so it can charge fees. If the web ends up carved up by a number of niched monopolies, than the story ends badly. And that one is up to "our" government to decide.
-- look, cheese ahoy!
You have ecommerce sites. They sell (mostly) meatspace products which turn a profit. They make money, costs are covered. No problem.
You have the average personal homepage which doesn't make any money now and probably never will because it wasn't designed to. Nothing changes, no problem.
You have the megaconglomerate media services which rely on banner ads for revenue. If they lose too much money on the internet, maybe they'll be forced to make an economic decision to quit using the internet. I'm really crying over this. No problem.
It really doesn't matter if you CAN make money on the internet. The internet was not founded to serve commercial purposes. If a business can discover an honest way to use the internet to its economic advantage, great. If the scam artists and porn kings are making a killing, hey... there were always suckers in the world, its unlikely they'll die off very soon.
The biggest issue here is the seeming inability to sell information. I don't necessarily see this as a problem. 99% of the information out there has been provided on a completely voluntary basis. I provide a tidbit to the world, as do hundreds of millions of other people. Those tidbits add up to a great wealth of information.
If the cost to run a site gets too large, there will be a source of revenue available. It might not be as obvious as banner ads, but if you have a large number of eyeballs, you WILL be offered compensation. I run a relatively low volume website that gets at most about 20,000 hits a year and I have been offered several jobs for over $50,000/year. I consider that to be a revenue source. In fact, there may be other economic options that have not yet presented themselves in massive numbers. The internet of today barely resembles what it was a mere 5 years ago. The next 5 years could have even more dramatic implications.
Also, remember the basic rules of supply and demand. Wherever there is demand for something, there WILL be a product offered, and there will be competition. And it may very well not resemble anything we've experienced over the last 5, 10, 20, or 100 years. Look around you today, you can get computers for free, internet service for free, DSL for free, long distance phone service for free.
You can spend $100 on a computer, pop off the case and make a few minor changes and you've just quadrupled the value of the machine. Then the company that should be losing money like crazy over this, thinks it over and decides that this isn't a problem and figures it might make them even more money in the future. Imagine that.
These things are happening because the world is changing. For many years the world was, for all practical purposes, held back. Held back by governmental regulations, excessive taxes, etc. However, the internet found a new life and has literally redesigned the entire world economy in such a short period of time that the governements of the world have been having a really hard time even attempting to keep up with it.
Record companies never saw mp3's coming. Now they're screwed and the industry as a whole has been changed forever. They might attempt to recover to some extent, but by not looking ahead, and not paying attention to which way the wind was blowing, they lost their opportunity. And they're not the only ones. MANY businesses are having the same problem. You HAVE to adapt. And the internet is probably only the first step.
This really has nothing to do with making money off of your website. The internet's affect on the future is so much more complex than a simple profit for information served.
-Restil
Play with my webcams and lights here
Q: Why are most net ads these annoying, animated, distracting, ugly, garish turds and magazine ads are often enticing, informative, attractive works of art?
A: SIZE MATTERS. I'd *much* rather scroll over a LARGE (think 300x500) magazine type ad right in the middle of the text I'm reading, than be distracted by a thousand blinky, ugly blotches of gif-trash from the sidebars. Think about it.
Who among us can picture a future in which all revenue-generating ventures fail on the Internet, and the only thing that is left is what has been contributed by individuals of their own free will, building on the ideas of others? ...or one in which the commerce is based solely on the barter system, freely, without a need to hide from the government services and products transacted ? Nobody? Just as I thought... Picture what the Internet would be like without any of the money... picture what the earth would be like without any of the air... Bluesee
SDMI: Finally! Music that won't rip or burn! Brought to you by the fine folks at RIAA.
coincidentally, I just wrote a piece on Kuro5hin.org about this very topic. Check it out if you're interested.
Can your IM do this?
...just like business has always done.
The problem with making money on the Internet right now is a the people with next-big-thing fever were looking for a way to make a killing on the web before most consumers had web access. That led to a variety get-rich-quick business models which didn't work (everything from banner ads to pyramid schemes to "disintermediation").
I started a small information-based business in 1997, and I knew I had to be on the Internet in the long run. I couldn't afford a million-dollar site, so we put up a Linux box running Apache and MySQL (total expenses over three years are less than $10,000). Our web site does not have e-commerce, but it generates $200-$500 a day in phone sales.
We get about 3,000 hits a day, many of them 304s (especially during spikes). Our web site has been the crucial difference between our business going out of business and making a modest profit.
Are we going to go IPO next week and become billionaires? No. We'll just keep growing modestly and add e-commerce when it will increase profits.
We recognized from the beginning we had to give something away on the web (we chose to give away the ability to research our proprietary database information). But we knew we had to keep selling something for a profit. Today orders which originate from the web are our highest-profit segment, even though we offer discounts for people who have been to our web site.
"The Web changes everything!" is a mantra for bankruptcy. The Web changes nothing. You still have to make money by providing something of value to people who have access to it.
"Disintermediation" was a failed business concept before the Web. And all the Web did was make it much easier to fail by adopting the disintermediation business model. Those who succeeded with it (Dell and... well, Dell) did so because their business had unique factors (rapidly deflating prices and rapidly advancing technology which could make competitors' inventory-based models a Really Bad Thing[tm]). The result: Many more businesses are failing with the disintermediation model now than before the Web.
Eternal vigilance only works if you look in every direction.
I see many posts here that are against capitalism and greed.
People, think for a minute will ya? What better way to encourage innovation than the prospect of getting filthy rich as a result? If you want constant and fast innovations, you need to have capitalism, trademarks, patents, and copyrights in place. Without it, it's communism. Why would I work my ass off, invent something, create a service for people, just so I get NOTHING out of it? Yes, it can happen, as in the case of open-source software... But would it happen as quickly? If you doubt me, just think of how much the U.S. has innovated compared to other countries (that have adopted capitalism at much slower paces). It's almost a kill! Airplanes, medicine, cars, computers, software, phones, light bulbs, tv, x-rays...
btw: 3-D is where I see the next HUGE wave of opportunity...
Like I said, good riddance.
I feel awfully lonely advocating this, but check out the Ad-Free Internet site. Curiously, the best discussion of it is on the Sluggy Freelance site.
There are lots of folks who run small sites, costing them $45/month or so, but they can serve only a very limited clientele. Either they're honed to razor sharpness in who they appeal to, or they're not well known, or they're just not so hot. But, once a hot site gets noticed, and everybody and her brother start hitting it, the costs go up rapidly. Much as we like to pretend otherwise, the Internet is not free---we're mostly just freeloaders.
Folks with popular sites, unless they're independently wealthy, must have some source of income from the site to support it, be it banner ads, a sugar-daddy corporation, sales of mugs and hats, or whatever.
I don't know about you, but I need a lot fewer mugs than there are good websites out there.
AFI's idea is to make it easy for sites and surfers to transfer cash in small amounts, paying for the one without costing the other very much, while protecting privacy and editorial independence. Think about it---if your site doesn't have to sell ads, it doesn't have to worry about advertisers (or owning corporations) being uncomfortable with the commentary.
Wake up! If we don't grow up and get used to paying for what we get, someone else will, and we'll get what they want!
I'm willing to pay for a good artist to write comics, or for Ars Technica to do unbiased reviews for me, or for a ton of other sites. It's only fair, and with the tens (hundreds?) of millions of surfers, none of us need pay much to get what we want. Unless we continue to insist it be fed to us at no (obvious, cash) cost. Then we will end up with the WWA (World-Wide AOL).
I refuse to believe corporations are people until Texas executes one. -- desert rain on http://www.dailykos.com/user/
If you don't mind excruciatingly slow sights, then CDNow wasn't too bad.
And I think that the correct use of apostrophes is worth more than £10 in this world of incorrect genitive singular's (sic).
"The new wave is not value-added; it's garbage-subtracted" - Esther Dyson, Dec 1994