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One lady makes stuff that you wouldn't think someone could make a living from, but she's turning away large orders because she's too busy and will be through January. It's slightly seasonal with an upsurge for the holidays, but she does steady business all year. She's got steady traffic through good search engine listings (all free), and estimates that half of her business is through search engine traffic and half through links & webrings (very common for that niche), plus now there are return orders from last year.
Another went from zero traffic and never an order to supporting a household with a couple of kids after the site was re-done and optimized. No paid at all, but there's a Yahoo listing and just good rankings. Again, you would't think the products would sell that well, but apparently they do.
Possibly not for some businesses, but some can do very well without paying.
Additionally, I have a problem with ROI if I have to pay 5 cents for a visitor that is only worth 2 1/2 cents.
Google, Fast/Lycos, Inktomi, Yahoo, ODP, Looksmart and even Altavista can collectively be good sources of quality traffic if you work at it.
IMO, it will take a newbie at least six months to start getting traffic from the conventional search engines, and probably two years to get the right kind of commercial traffic from them. And the landscape will be changing every few months even as they are learning. So it's not hard to see why many people are willing to throw money at Overture to jump start their web sites. But I don't see how many people can build a profitable business model with the ROI I see from Overture traffic costs.
IMO, if you have to spend more than 10% of revenues on advertising, you're doomed from having a successful business. Those 5 cent visitors at Overture would have to return 50 cents each and I don't see that happening.
If you want to impress investors with traffic numbers, I'd say go over to Overture and dump a wad. But if you've got to eyeball the bottom line to make payroll, I'd plan on learning how to deal with the rest of the search engine world.
On a broader view, people may stop using SE's that use Overture and PPC too much and move to google, fast, wisenut and "cleaner" indexes.
Overture is simply and purely a "shopping" index - a yellow pages for the Web. It does that well, but it does not add functionality to generalist Se's, apart from helping them with revenue, until their customer's depart.
I think Ov is at its peak of Web visibility right now.
As mayor points out it can take a considerable amount of time to get established in the real SE's, once you are established, there is the opportunity to average down the overall cost per click, this is not an option for the newcomers.
>is it possible to run a successful internet business without drowing in Overture?
I can 100% assure you that it is.
Yes, build a site ground up from what you learn here, stay legit, get in the directories, make it a site that others will want to link to and come back to, provide solid content first, hope you have a good product that sells well