How Do Websites Make Money?

Discussion in 'Et Cetera, Et Cetera' started by RoyalT, Jan 25, 2007.

  1. RoyalT

    RoyalT New Member

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    I'm not talking a lot of money, I'm talking enough to break even/cover the costs of running the website.

    I bought a domain the other night. Because I read up and apparently they're getting snatched up faster than [something] on St Patrick's Day. Alas, now I have some questions:

    1. Can I have a domain and a host with separate companies/entities?
    2. Once I have a site, would I get a certain amount of money for each 'hit'?
    3. Or does revenue only come from adwords/AdSense/banners etc?
    4. If my site had a signup/forum aspect, is there an income for each member/signup?
    5. Anything else anyone wants to tell me.

    Right now I have three ideas for three sites, two are related. I just need to learn HTML or how to use Frontpage/CoffeeCup now :tongue:

    Thanks, I would like as much information as anyone would like to give. I basically want to know that my site (with Google Adsense and the right metatags etc) could at least run itself, and not cost me a fortune.
     
  2. JustAsking

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    RoyalT,
    Interesting questions. I have a website that makes money so I think I can give you some advice on these.

    1. Can I have a domain and a host with separate companies/entities?
    Yes, you can buy a domain from such places as GoDaddy.com or NetworkSolutions.com. All you get with that is the exclusive use of that domain. You can optionally ask any of these places to provide DNS services for your domain, which is basically the "phone book" entry for your domain that maps your domain name to the particular Internet address your webserver is at. Finally, regardless of where you registered your domain and who is providing DNS service for you, you can host your site on any machine you want, be it a commercial hosting provider or a machine in your basement.

    2. Once I have a site, would I get a certain amount of money for each 'hit'?
    Not directly. The most successful three models for generating revenue on the Internet would be as follows:
    - Free Newspaper Model - Unless you have a product or service to sell on the website, your site is more like a free newspaper or magazine. In this model, you have to generate a large readership base and you have to sell advertising. The more readership you have, the more you can charge for advertising. The same goes for a website. You can put up banners and fixed ads and get paid for "exposures" (meaning when people come to the page), and click-throughs (meaning when people actually click on the banner and go to the site it is advertising.)

    - Mail Order Catalog model - This is where you sell products or services on your site that people buy with a credit card. The site serves as both a marketing instrument and storefront.

    In both cases you need to build traffic by doing what is called "Internet Marketing". The cheapest form of that is to put up the site and wait until the search engine web crawlers come around and catalog your site, so it will show up in Google or Yahoo searches. The more aggressive way is to set up an account with Yahoo or Google with a credit card and buy key words from them to raise your standings in the search results.

    LPSG is more like a mail order catalog that has built its subscription base by creating a community that draws people in. The revenue generating product is access to the pictures and videos via paid membership. The rest of us freeloaders who don't have that level of membership serve as volunteer community builders by virtue of our presence and activity in the forums.

    A popular successful "mail order" model site is Amazon.com.

    - Brokerage Model - This is where your site provides a place for others to conduct commerce. In the brokerage model, you typically derive your revenue from commisions on the sales that take place on your site. Ebay is the best example of a successful brokerage.

    3. Or does revenue only come from adwords/AdSense/banners etc?
    As mentioned in answer #2, revenue can come from banners, from selling products or services, or a mixture of both.

    4. If my site had a signup/forum aspect, is there an income for each member/signup?
    You are free to dream up any product or service that is legal and price it at whatever the traffic will bear. It is a balancing act when your offering is membership to a forum or other form of community. It is a chicken/egg problem where the value of your offering is related to the size of the community you can build (the number of members), but the size of the community is inversely related to the price you charge. LPSG builds community through free membership and then derives revenue from people who want extra services. If all membership levels had a fee, the community might not grow large enough to provide any value to its present and prospective members.

    5. Anything else anyone wants to tell me.
    Making money on the Internet is not as easy as it seems. It is becoming an efficient marketplace in that most of the successful models are already being exploited. However, there is still room for something interesting and innovative to be done within or without these models. Like any other business, it takes time, money, hard work, patience, or in some cases dumb luck instead.

    The technology of the website is usually the easy part, compared to the effort it takes to build a business. You can go to Yahoo, for example and maybe 100 other places and create a community or a storefront site in an hour or so, without a lot of technical training.

    (Disclaimer: My use of LPSG as a commercial site implies no criticism. I have no idea if LPSG is a moneymaker or the fees barely cover the cost. It happens to be a good illustration of a site that derives some revenue from its ability to build a community.)
     
  3. JustAsking

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    RoyalT,
    Hey, on rereading your question, I realize that with all that stuff I wrote, I really didn't get to the heart of your request. I answered the question as if you were asking how to make a lot of money on the Internet.

    If you have a simple idea for a forum or community site you want to run, the costs can be very minimal. Yahoo Groups are a good example of that. If you just want to cover your costs, which will be in the area of $100 per month or less, you might make that up with banner ads, but it is doubtful unless you can build a very big community.

    Regardless, the mechanics of setting up something like a Yahoo group is quite simple, and you could run it at the cost of a high end TV Cable bill.
     
  4. SomeGuyOverThere

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    If you know where to go, the costs can be virtually free.

    My first few websites were hosted for free, my first proper website only cost about $4 per month to host.

    You can cover this using banner adds and Google has a system of advertising too, but you need traffic to your site in order to make any money.
     
  5. ClaireTalon

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    I'd not sell ads/banners, since even though in a legal sense you're not responsible for where the banners take you to, they can still damage your reputation, or give you a negative one for being linked to spamming sites, ad agencies, and similar. But you should check whether Amazon.com still has their Partner program. They'd hand you the code for a small ad on your site for one of their books, and if someone orders the offered book through that link, he receives 10% or so. Someone I know made about $ 14 a month with that. Not much, but unless you have high costs, it's a good average.
     
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