MikeNoLastName - 11:49 pm on Jan 7, 2006 (gmt 0)
Good topic, I was interested to see others run into this too.
It's gotten much easier now that people actually tend to know what the internet IS. But after many years of this, I've found the easiest explanation as:
"We publish an INTERNET ONLY magazine and make money from advertisers." (of course half of them still ask, is this something in print I can pick up on the street or in the store - uh-duh)
Everyone knows what a magazine is and most know they make money from selling ads (or subscriptions) so it is very easy to relate from there. I guess you could subsitute "Yellow pages" or "newspaper" if that is more accurate for your case. We NEVER even mention Adsense or usually any other specific advertiser and just group them all together as "advertisers". All our other advertisers are on a flat periodic rate (like a magazine) or banner impression basis, so we don't get paid on a PPC basis on them anyway. Even our other direct advertisers assume we make very little to nothing from GAd and assume we just use it as place-fillers, when it is in reality just the opposite.
If they ask how well it pays I tell them "I'm in semi-retirement already and looking for an island somewhere to buy" (which isn't too very far from the truth). (Although I like Freq's response in the right circumstances too - from my usual appearance they'd probably find it more believable too :).
My wife on the other hand, is the more loquacious, outgoing, marketing type (she's actually responsible for direct selling banner ads and links on our site), insists on telling everyone excitedly:
"We run the number one site on (our topic) on the internet" and then proceeds to hand out a business card and then either tries to talk them into an advertising contract with us or tells them to tell all their friends to visit our site whenever they need (our topic). I've suggested she just get our domain tattooed on her forehead like the lady on ebay :).
As far as potential future competitors... we don't bother talking to them, or tell them the business sucks or act all excited and ask them if they'd be interested in buying ours. :-) If they ever actually ask how much, we have a pre-agreed price we both quote in the high 7 figures, but in reality I'd never sell, because I feel the constant ongoing income (with or without Adsense) is much more valuable than a one time lump sum which could become practically worthless overnight in today's economy (you don't butcher your cash-cow).