Forums: Discussions for entrepreneurs and small business.

Hello fellow startupnationers,

Here`s a question I have been pondering over these few days,

How do websites/businesses such as Friendster, eBay, YouTube and Startupnation earn their revenues when everything is FREE? It seems that starting these kinda business up is kinda hard as I think that revenues will come in only after there`s a certain amount of online patrons through advertisments earnings.

I understand that these businesses earn their $$$ through advertisements (correct me if I`m wrong). Do they have any other ways of earning $$$? I was thinking of starting a similar kind of business but just couldn`t figure out how are we going to profit initially. I hope that there`s some experienced people can answer my queries. Thanks!!!

Nikole - new picture for the new SUN look? 

Haha. Is Jeff & Rich around? Maybe they can share their experiences about how they started SUN initially.  

Thanks! That was a wonderful advice, Iouone.

For my situation, I trying to start a small internet biz without much investment put in as my biz partner is quite good with the internet stuff. Initial start-up cost would be the hosting, domain etc. We are planning to let it be a free service for a few months to draw traffic, but I`m afraid that when we start to charge $$$ for this service via the internet, there might not be people there anymore. Since everyone is giving free service, it seems like we are on the losing side.

Overall, I think this internet service we provide is quite unique and there would be acceptable demand. I guess we just need to START IT UP!!!   

Well revenue can be generated from banner impressions which equates to usage. Of all the sites listed I found it funny you didn`t list craigslist which has no banners and costs nothing, yet is worth A LOT of money because of the user base. Google had the same principle, no ads but millions of users. I think a lot of these sites you see that are free have an initial startup cost but once they`re up and running cost little to maintain because the users are generating the content so the only real costs involved are bandwidth and hardware, which now-a-days is relatively cheap.  

Owen87 it`s a dilemma we`ve all had to deal with on the net. Here`s one thing to think about when you start talking about charging for site usage. The user is already dropping 40$ a month just to access your site (internet access) now your asking them to drop a few more bucks to access your information, that maybe hard for them to absorb not because of costs but because of principal. What if every site you visited wanted 1.95$ to view, the model just wouldn`t succeed. Now if your offering some special Mortgage list or something, then yes that warrants costs and I wouldn`t think they`d have a problem paying for that, but definitely not generic site content/community stuff. What about offering a premium service? I know several sites that don`t allow you to do certain things until you "upgrade".