Make Connections

Network, Get Answers, Find Members in Your Area, and More!

Forums » Grab Bag

Earning revenues when everything is FREE

    • 17 posts
    April 16, 2007 7:26 AM EDT

    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!!!

    ---
    "Success is 99% hardwork and 1% intelligence"
    Albert Enstein

    • 17 posts
    April 16, 2007 9:52 AM EDT
    Oh I see. Ya... Its kinda scary if you don`t convert. You will keep on pumping $$$ into the business without making any $$$.

    ---
    "Success is 99% hardwork and 1% intelligence"
    Albert Enstein

    • 17 posts
    April 16, 2007 8:01 PM EDT

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

    ---
    "Success is 99% hardwork and 1% intelligence"
    Albert Enstein

    • 17 posts
    April 18, 2007 2:30 AM EDT

    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!!!   

    ---
    "Success is 99% hardwork and 1% intelligence"
    Albert Enstein

    • 17 posts
    April 20, 2007 8:06 PM EDT
    Yup! I agree with Todd. Maybe a premium service is workable. Ya craiglist is really simple yet generating alot of $$$.

    ---
    "Success is 99% hardwork and 1% intelligence"
    Albert Enstein

    • 54 posts
    April 6, 2008 8:07 AM EDT
    Great post thanks.  Got me thinking!



    ---
    Looking For Employees?
    Post Jobs at Mployd.com at http://www.mployd.com
    Employer Job Postings
    Looking For a Job?
    USA Jobs

    • 10 posts
    March 28, 2008 4:58 PM EDT
    So, if I have an idea for an advertising revenue based website, how do I start putting together the numbers?  How many visitors should I expect (how do I find out my competitors numbers?)?  How much ad money can I generate (how much do my competitors generate?)?
    Thoughts? 
    Thanks!

    ---
    Jim Harshaw
    Albemarle Window Cleaning
    Charlottesville, VA
    www.albemarlewindowcleaning.com

    • 10 posts
    April 7, 2008 5:55 AM EDT
    So I know that Craiglist would be worth a lot of money because of the user base but it was mentioned that they "generate" a lot of money.  My thought was that they could make some dough if they were to sell it.  How do they generate money?  

    ---
    Jim Harshaw
    Albemarle Window Cleaning
    Charlottesville, VA
    www.albemarlewindowcleaning.com

    • 10 posts
    April 21, 2008 7:31 AM EDT
    I just checked out the article link you included in the post.  Amazing!
    Brutus4/21/2008 12:33 PM

    ---
    Jim Harshaw
    Albemarle Window Cleaning
    Charlottesville, VA
    www.albemarlewindowcleaning.com

    • 141 posts
    April 20, 2007 6:20 AM EDT

    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".

    ToddF2007-4-20 11:22:43

    ---
    He who gets greedy like a pig, gets slaughtered like a hog!

    • 621 posts
    April 17, 2007 9:00 AM EDT
    I think this discussion is missing another major factor. Not all those "everythings free" and "we earn money from advertising" sites started small. These are business plans run correctly (if still providing the service and getting the advertising dollar) or not (if dieing and soon to be gone).

    You can start a business in more than one way.

    You can buy or make something, then resell it.
    You can make a plan based on the habits of people and sell the plan to investors. For example (completely made up numbers)

    A new company named Yippee.com is going to position itself to take over Google. The company owner or directors would make a plan based on calculations of previous companies expenses in the industry. They might determine the following... For one year of operation.

    Technical hardware      $  50K
    Technical workers         $100K
    Administration costs      $100K
    Free stuff programmers $100K
    Marketing on/off line      $150K
    Total                                  $500K

    Revenues from current competitors are $5.5 Million.

    Yippee.com plans to take 10% of the share. That`s projected income of 550K. There will be 50K in profit the first year. With in the business plan it would state the next milestone and when all investors should expect a return.

    So not all businesses start small. They might start big and pray for a big payoff.
    iouone22007-4-17 14:1:16

    ---
    Vincent Wilcox (a.k.a. KRAKR)
    Drummer
    My band: Letters Make Words