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Economics of a free site

How and how much money do they earn

     
12:06 pm on Dec 5, 2004 (gmt 0)

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Hi everyone,
There exist a lots of free sites all over the internet that dont sell anything. I wanted to know as to how do these sites earn their bread. Is it only advertisements on them that keeps them afloat and profitable?
2:24 pm on Dec 5, 2004 (gmt 0)

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Many sites simply aren't intended to earn funds.
The sites exist to provide information:
sometimes as a service to a group's membership,
sometimes to the public at large,
sometimes simply as a stroke to the owner's ego.

Such labors, whether for public service or for public ego boost, are valuable enough to their respective owners that the expenses are not of great concern.

Also, for many non-profit groups, the necessary expenses to cover hardware, software, bandwidth, design and regular maintainence are covered via direct donations and/or in-kind donations to the group.

4:26 pm on Dec 5, 2004 (gmt 0)

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Many sites simply aren't intended to earn funds.
The sites exist to provide information:
sometimes as a service to a group's membership,
sometimes to the public at large,
sometimes simply as a stroke to the owner's ego.

I'd add to that list:

Some sites that are entirely advertisements (e.g. author sites)
Political propaganda and campaigns

7:02 pm on Dec 5, 2004 (gmt 0)

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But how much do they manage to earn through advertisements. I mean, maintaining servers is expensive, and at least this cost must be covered, plus the time required to build/maintain the site is also large. How much do such sites usually make through advertisements, 1000s of $ or less. I'm basically curious about this because of existance of various free forums which are good although free. They need atleast some financial backing, dont they?
7:38 pm on Dec 5, 2004 (gmt 0)

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You can build and maintain a site for next to nothing - provided you don't demand that much from it. "Free-sites" have found a way to place their content online at a cost that is acceptable to them be that free, $50 a year or $1,000.

I doubt that many of the sites you are describing make much money or consider that an important.

9:40 pm on Dec 5, 2004 (gmt 0)

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I wanted to know as to how do these sites earn their bread.

In the early days of the internet I started a site that gave away technical information, partly for fun, partly for ego, partly to pick up a little consulting business (although I was busy enough at the time), and partly to spread my ideas of how some things should be done (in my little niche of engineering). The site costs almost nothing.

In recent times I have started advertising. The advertising easily pays the expenses of the site and justifies (to my spouse, who doesn't understand why I enjoy it) the time and expense. Since the income (net profit) is taxed, it allows me to deduct some expenses that are not directly related to my consulting work.

Depending upon the number of visitors, field of interest, and going rate for advertising in that field (in mine, quite high) an information only site could easily earn a few hundred to a thousand dollars (US) per month. However, there are some that earn practically nothing (not enough visitors, ad revenue per click too low, etc.), there are others that earn a few thousand per month. I am sure some information or educational sites can provide a decent living for the owner. But for most, the earnings just pay the expenses and justify the time spend.

Finding out that an engineering professor in a third world country (where they can't really afford books) assigns my site as a text for her class is reward enough.

8:42 am on Dec 7, 2004 (gmt 0)

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Finding out that an engineering professor in a third world country (where they can't really afford books) assigns my site as a text for her class is reward enough.

Kudos to you!