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Website business model

Looking for pointers in the right direction

     
6:49 pm on Dec 2, 2003 (gmt 0)

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I'm looking for some articles/tips/papers/books on what a business model for a website is. I'm talking about the information based sites that aren't really selling anything. I visit a lot of these sites and they seem to exist in abundance based on advertising dollars. Is this real? Can you still do that? Are all these sites actually losing money but have a parent company feeding them? How many visitors/users/clickthroughs do you need to make a site break even...

Lots of questions from a guy who's got buckets of technical experience but only a single business class under his belt. Hope someone can offer me some decent reading so I can figure this out.

7:08 pm on Dec 2, 2003 (gmt 0)

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You've already found the best resource available for learning how to make money off an informational site(s). :) Adverts are still a legitimate revenue generator. There are other ways of generating income from the traffic you earn.

As far as where to start your learning - I'd suggest you start with reading this [webmasterworld.com...] There are plenty of other threads but this one gives you some nice broad-brush concepts to get under your belt.

7:20 pm on Dec 2, 2003 (gmt 0)

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Thanks for the reply. I've already read Brett's fantastic article a bunch of times (just to make sure I soaked it all in). It is a great guide as to how to build a successful site, but I'm looking more towards the realistic dollars and cents of it. I'm reasonably confident that I can build a moderately successful site over the next 6-8 months, however I'm looking to try to figure out what kind of realistic revenue something like this can draw. I'm fine with losing money for a while but there needs to be a light at the end of the tunnel.

More specifically I'm looking to find out how much revenue advertising can generate, and what level of visitors you usually need to attain before a site can be self-sustaining. I know that as my site grows, so will my expenses... When do the curves of expenses and revenue usually meet for a site that's not selling a product?

10:01 pm on Dec 2, 2003 (gmt 0)

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>> When do the curves of expenses and revenue usually meet for a site that's not selling a product?

That really depends upon the content you're offering. If the content appeals to millions of people then you should have excellent traffic stats to show to potential advertisers. The more traffic the better the price you can command for the ads. If you're interests lie in a small niche then the chances are good you won't see a lot of traffic though you're visitors are more likely to be more interested in your topic.

The bottom line is there is no guarantee of revenue. Which leads me to ask - why not sell something? Even if you only did Adsense or Amazon's affiliate program you could make some money with a modest amount of additional effort.

11:57 pm on Dec 2, 2003 (gmt 0)

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I have no problem with, and intend to use adsense/Amazon affiliate/ whatever else is out there. By saying that my site won't be selling anything I meant that I won't be building widgets and selling them online.

I guess my problem is with the very vague and sketchy information I'm getting out there. For example, Google's adwords can have a varying value for each ad (if I'm not mistaken) and Google gives you an undisclosed cut of that... Makes it kind of hard to plan out what % of expenses that might meet.

Still thank you for the help. It seems like it's more of a dive in and figure it out for yourself scenario that I'm facing :)

3:17 am on Dec 3, 2003 (gmt 0)

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Re: dive in, read, and make your own assesments.

Unfortunately you're right. Much of it, I'm convinced, is instinct. If you know your subject matter well and you've been out there surfing, you know who you're up against and you should have a pretty good idea of what your intended audience is looking for. This knowledge, coupled with knowing your development and business skills, should give you a pretty good snapshot of what your chances of success are. You already know success isn't going to happen overnight. And you know that the rules can be changed at any moment. Unlike any other business I know, our world relies very heavily on our ability to learn and adapt quickly. If you can do that then you're half-way there.

1:03 pm on Dec 3, 2003 (gmt 0)

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Once again, thanks for the replies Lorax.
6:32 pm on Dec 3, 2003 (gmt 0)

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I just went through the rather painful process of developing revenue models and writing up a business plan for an online business and can tell you that its hard to find any really good sites on developing an online business. Most sites have a few breezy, general articles that cover the same 4 points at every site.

There are some good sites on financials for a business plan, but if you are not seeking money then don't waste your time on them.

Like Lorax said, its mostly a gut thing as to whether you feel you can make money off your idea. Do a quick look around for similar sites, see if any have stood the test of time, look them up on Alexa and get an idea of their traffic.

Definitely read up on small business accounting and make sure you have an understanding of the basics in that department.

10:24 pm on Dec 22, 2003 (gmt 0)

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Business Model

I just completed a M.A. in Corporate Communications, and I must say this topis was heavily discussed. I must also say I got rather boring! BUT....

Hit Borders, Barnes and Noble...whatever book store you can find. There are large books on this very topic. And what's more, there are many theories on which is the best model. More confusing is the fact that almost the models of an online business some element of "good" in them.

You have to decide the direction you want to go, then find the model that gets you there. You will probably have to edit the model, so don't look for a cut and dry answer here.

I'll also say the type of model you need to use depends on what you want to accomplish. Do you need financing? That means a rather large model as you need to convince a banker that you know what you are doing. If you are trying to keep it small and easy to manage, then you can follow an easy model.

Good Luck, and don't let all the excess information overwhelm you.

Fred

10:55 pm on Dec 23, 2003 (gmt 0)

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Advertising is one of the toughest ways to make money from a site. And I would have to disagree with one of the other posters. A wide-appeal, general interest site, even if it gets lots of traffic, is very tough to get ad money for. There's too much competition for it and ad rates have absolutely plummeted.

Tightly focused niche sites are much better.

Many sites are now making money through the promotion of affiliate programs which they mention on the web pages and in email newsletters to their lists.

Building a list is very imnportant. Of course, it has to be opt-in. You'll need a good autoresonder to manage it. And it helps if you can write.

There is the possiblity of making revenue by renting out your list, but you need the permission of your readers. That's getting tougher to acquire these days.

There are actually zillions of courses about this topic.

Go to someplace like CBmall.com and search around there.

Some sites are able to make recurring revenue on a subscription model. The key again is to have a tight niche and to create a vibrant community so that the community itself generates the valuable content that keeps people renewing.

Others create their own info products that satisfy the niche their site is about. And your site and emails promote your own product, in a soft-sell way.

Jeff

6:48 am on Dec 25, 2003 (gmt 0)

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More specifically I'm looking to find out how much revenue advertising can generate, and what level of visitors you usually need to attain before a site can be self-sustaining.

There really isn't a set amount of money - it depends on the type of visitors your site attracts, and (mostly as a result of this) what advertisers you can get.

It also has a lot to do with how good the site is - if it's TOO good and interesting they won't click on ads and leave!

Probably a ballpark figure just for planning would be to try to make $1 per thousand page impressions on a general information site (so if each visitor reads five pages on average that's 0.5c/visitor).

You can do much, much better of course: I have a one-page site currently making 70 times that, and I'm sure others make much more. But I also have larger sites making pennies, so the average does come down. And it does vary greatly from day to day (a 20:1 ratio for good/bad days is not unusual).

Bear in mind if you are attempting to sell advertising yourself that is a cost in time and effort (and tough). So for most sites the lowish ad revenues of networks like Adsense and affilate links are all that's available.

What do you mean by a self-sustaining number of visitors? That might be relevant for a forum site or community, but for a general information site it's the number and quality of inbound links that make it self-sustaining. In the short term making it search engine friendly helps.

6:50 pm on Dec 27, 2003 (gmt 0)

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interesting enough, as I scour the internet for sites to link exchange, I am also finding NICHE sites that I want to have a link from in a proeminent space(i.e. advertising). I'd never advertise in general purpose sites.

So, yes advertising works - I am planning on putting down $100-$300/month ads in certain niche sites that cater to my audience.

Oddly enough, one of two things seems to happen:

1) their advertising email doesnt work, and it gets bounced back.
2) they take forever and a day to get back to you

although some of them are amateurish sites, one in particular supposedely has 5 million users and is professionally done. I've emailed them twice to get a quote, and still nothing.

Go figure, and all I want to give them is my money. I'm giving them till around the 5th with all the holidays and everything.

2:55 am on Dec 28, 2003 (gmt 0)

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I've been noticing that a few people speak often about how people in charge of sites either never get back to them or take a very long time to return e-mail. Will be sure to take extra special care with those kinds of things :)
5:01 am on Jan 1, 2004 (gmt 0)

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Good luck! I agree with focusing on finding your niche, and just watch your expenses carefully. I guess it depends if you will need staff, what sort of content you are providing, but I have run content based websites where the top expense was the server itself. Get yourself a good backend and watch the bandwidth!
12:46 pm on Jan 2, 2004 (gmt 0)

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Hello Karmov
Since you are starting from ground zero
Perhaps we can learn from your experience and compare
Could you keep the thread alive and for example post every other month

I started working for myself about 2 years ago
And had multi profit centers management experience
Well.. I learned to reassess it all and create my own model
Good luck

Henry

9:39 pm on Jan 3, 2004 (gmt 0)

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the problem is, all the business plans, marketing books, business models, etc. that you will find in libraries or in school, are usually way out of date and based on offline business models that quite often don't translate to online very well.
remember the dot com bust, that was big companies with lots of money and great business plans and models based on offline history.

just my rant,
robert

12:59 pm on Jan 19, 2004 (gmt 0)

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If I did understand you well, the straightforward question would be:

Where is (still) the potential of harvesting the money?
or
Which sphere of internet business (or what kind of website) is yielding a profit?

I have prepared the technical background for one of my client, who dropped the domain afterwards, so I have decided to use it and went experimental.
After many researches, based on different criteria (profit mostly), I have always ended up with "porn industry".
Since this is the only area I want to avoid, I have finally built the "money-back guarantee" Travel guide.

I would also appreciate it if someone could share with us their opinions on TOP ways how to make money from a site.

plan