Slashdot Mirror

← Back to Stories (view on slashdot.org)

What it takes to be a profitable Internet company

Posted by ryuzaki0 on from the investors-want-revenue dept.

Zebulun writes "The Red Herring has a really good article that basically examines what it takes to have a profitable internet company and why so few make it. " I think investors are expecting this more and more-the next few years will see some shake outs, something which has already begun to happen. The question is, who will be left standing?

4 of 97 comments (clear)

  1. Re:My HUGE company - The internet keeps me alive! by daviddennis · · Score: 2

    I visited your web site, and it looks like all your products are free - so how did you make $37.20?

    Maybe you need to make products for Linux? My impression is that the Windows market for what you're producing is pretty much saturated, thus the low revenues. Unfortunately, Linuxoids want it all for free.

    You might want to consider BeOS - there aren't that many people buying it, true, but those who do are comfortable with paying for software.

    D

    ----

  2. Re:How about sustainability? by daviddennis · · Score: 2

    In the final analysis, turning a profit means that you've performed a service that people are willing to pay over your costs for. Nothing more, nothing less.

    Of course if you just want to do something cool, first figure it out, then co-locate a server where there's plenty of bandwidth, and you can develop it for costs in the $ 200/month range. Once you get big enough to be noticed, you'll have higher bandwidth bills, but at that point banner ads should be able to pull in money.

    You don't really need a big company to do something useful. Check out my web site [ http://www.amazing.com ] - I have FAQs and information on subjects from cruising yachts to digital video, and people find all of it quite useful. All it costs to put up is my bandwidth bill. In fact, this was basically how Slashdot was started, although obviously Rob is much more successful at creating a system attractive to his market segment than I've been.

    Now, if you want to feed, clothe and house yourself, that's another matter. That requires a profitable company.

    Basically, what you need is a revenue model - where's the money going to come from? With amazon.com, it was sales of books. With eBay.com, it's auction fees, with recycler.com it's early access subscriptions and ads from auto dealers. Once you've figured that out and put together a realistic business plan, you have something worth looking at.

    Hope that helps. Hey, if you got a really good idea, I have bandwidth to spare at the moment.

    D

    ----

  3. Re:What's it worth? by Fizgig · · Score: 2
    What is Amazon worth, REALLY? I mean, take away the overinflated stock, and what do you have? Some servers, some T-1 lines, and a warehouse full of books?
    That's the $60,000 question (or whatever it is up to now). Does the name "Amazon.com" mean anything to the American public? I know that at least for me, there is no such thing as retail brand loyalty online. I buy wherever has the cheapest price, not the place that I know the best (of course, I have to have at least heard a little about them; I'm not going to buy from a no-name). But what about the rest of the country/world? Will they all equate Amazon.com with books for the rest of their lives? If so, Amazon has a lot more than a couple of T-1 lines. It all depends on how pervasive things like agents become (not real agents but the excuses for agents we have now). If people can find the cheapest place to buy a book just as fast as they can find the book on Amazon, they're going to do the former. But will they? I still have to laugh at all the loss-leaders the online merchants have. I'm not going to stay around!!! But they don't know that. Another thing possibly in Amazon's favor is their developing distributor relationships. If they can end up having a lower bottom line than anyone else, they WILL be around forever.
  4. Remember when AOL connected to the net? by MagicMike · · Score: 2
    This is a touch off-topic for the article, but all of the comments seem to be about the comments, and I think I just figured it out: College is back in session.

    Remember when AOL first went online? The chaos and idiocy that ensued?

    Perhaps that is what is happening here. I have a hard time believing this is a bunch of Microsoft shills, so I'm forced to hope the posting will simply get better in time.

    Either that or /. will go the way of newsgroups, with abysmal signal to noise...That would make me sad, so I'll keep hoping.