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How do free services on the web make money?

forbes.com

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Re: How do free services on the web make money?

#21

Post by Volpe »

babuskov wrote: post #14
david_shaw wrote: post #2

Disclaimer: I'm going to comment on my personal experience running a free web application, http://sleepyti.me . It's not meant to be self-promoting, but I feel that the experience is relevant. There are a lot of ways to make actual profit (not just break even) with free applications. The Hacker News crowd doesn't always show a lot of love for the "small, free application" crowd, and the echo chamber is correct that h…

I found out a few years ago that my sleep cycle is actually 45 minutes, and not 90 as sleepyti.me suggests. Is there a way to make it work in 45-minute steps?

How would it be different? show more times in the morning? The 90 minute cycles it shows you are still valid 45 minute cycles too...

I assume you need more cycles than people who have 90 minute cycles?

Re: How do free services on the web make money?

#22

Post by KnowledgeSponge »

There's a big one missing from this list that is somewhat recent.

Selling the placement of audience segmentation/retargeting cookies on a publisher's site to a data aggregator like Bluekai (typically on a CPM bases) who then sells that aggregated data to DSPs/DMPs for use in display advertising.

If you want to learn about a whole different layer of the ad tech industry, just start perusing some of the questions on Quora for Bluekai (http://www.quora.com/BlueKai) and then do some digging on the companies in the Data Aggregator and Data Supplier buckets of the LUMAscape for display advertising (http://www.lumapartners.com/lumascapes/display-ad-tech-lumas...).

Re: How do free services on the web make money?

#23

Post by vacri »

babuskov wrote: post #14
david_shaw wrote: post #2

Disclaimer: I'm going to comment on my personal experience running a free web application, http://sleepyti.me . It's not meant to be self-promoting, but I feel that the experience is relevant. There are a lot of ways to make actual profit (not just break even) with free applications. The Hacker News crowd doesn't always show a lot of love for the "small, free application" crowd, and the echo chamber is correct that h…

I found out a few years ago that my sleep cycle is actually 45 minutes, and not 90 as sleepyti.me suggests. Is there a way to make it work in 45-minute steps?

There is a lot of variance in sleep cycles between individuals, between nights, between different types of sleep. Saying 'a sleep cycle is 90 minutes' is like saying 'The left side of the brain is for logic'. There is a rough element of truth there, but nothing to hang your hat on.

Source: once worked as an overnight sleep lab technician, collaborated with sleep specialists in next job working for the lab equipment maker.

Also, a timer with 90 minute steps inherently includes 45-minute steps. If you do desperately want the in-between steps, it's a trivial mental calculation on the four steps you do get given at the site.

Re: How do free services on the web make money?

#24

Post by BlindRubyCoder »

Many times they don't. It's usually something like Instagram where they give out a product for free in hopes that piles of people will start using it, and they'll "figure out something later". Worked out great for Google and Instagram, not so great for 999,999 other startups who tried it.

Personally, I like the idea, but it's tough.

Re: How do free services on the web make money?

#25

Post by jacques_chester »

Advertising sucks because worldwide inventory grows faster than the supply of eyeball-hours to view the ads. So there's constant downward pressure on prices.

Subscription sucks because you have to fight subscriber fatigue ... if you can get someone to sign up at all. People sweat over $5/month memberships; meanwhile they spend $20/wk on coffee.

Micropayments suck because everyone hates the mental overhead.

I have a solution I call "microsubscription". The only problem is that it's been tried by others and failed. Naturally I feel I've got the magic ingredients that the others didn't have, but ... we'll see.

Re: How do free services on the web make money?

#26

Post by babuskov »

vacri wrote: post #23
babuskov wrote: post #14

Earlier quoted context omitted.

I found out a few years ago that my sleep cycle is actually 45 minutes, and not 90 as sleepyti.me suggests. Is there a way to make it work in 45-minute steps?

There is a lot of variance in sleep cycles between individuals, between nights, between different types of sleep. Saying 'a sleep cycle is 90 minutes' is like saying 'The left side of the brain is for logic'. There is a rough element of truth there, but nothing to hang your hat on. Source: once worked as an overnight sleep lab technician, collaborated with sleep specialists in next job working for the lab equipment m…

You're right that it is trivial to calculate it myself, but then again, it is trivial to calculate it without using the website. I thought the whole point is that you do not have to calculate anything ;)

Anyway, I believe the site should allow "set custom cycle". As you wrote above, it varies between individuals a lot.

Re: How do free services on the web make money?

#28

Post by chewxy »

jacques_chester wrote: post #25

Advertising sucks because worldwide inventory grows faster than the supply of eyeball-hours to view the ads. So there's constant downward pressure on prices. Subscription sucks because you have to fight subscriber fatigue ... if you can get someone to sign up at all. People sweat over $5/month memberships; meanwhile they spend $20/wk on coffee. Micropayments suck because everyone hates the mental overhead. I have a s…

And yet, there are still sites that will command a high eCPM. The difference is of course, the audience quality.

Like I mentioned in my latest blog post[0],

> Real time bidding engines are getting more and more intelligent, and would be able to guess with quite good results, how valuable a user is to the advertiser. This allows the advertiser to only pay high amounts for audiences that matter to their ROI, while paying low amounts to audiences that don’t.

> What happens is then this: a segregation of high paying advertisers and low paying advertisers form. When I say high paying advertisers I mean advertisers who would pay high for the right audience. They will pay significantly higher than the low paying advertisers, who would “spray and pray” their ads in hopes of reaching the right audience.

I maintain that if a startup is able to build the correct audiences (StackOverflow building an audience of IT professionals for example), the revenue from advertising will be substantial.

[0] http://blog.chewxy.com/2013/03/06/startup-business-models-ad...

Re: How do free services on the web make money?

#29

Post by boyter »

chewxy wrote: post #8
balajiviswanath wrote: post #5

Earlier quoted context omitted.

Thanks chewxy. The only issue is that advertising is getting increasingly sophisticated and contextual. The big boys (Facebook and Google) have way too much data and crowd out the smaller startups. So, startups should start thinking beyond advertising as a main source of revenue.

I maintain that if you know what you're doing, advertising is ridiculously profitable. Most of the time though, most startups that use advertising do it because: they don't have other business models, and so advertising is shoe-horned in. On the other hand, a startup that knows what they're doing will know that building out the correct audience is the way to go - if you provide your clients (the advertiser) what they…

Any examples to support your case?

Re: How do free services on the web make money?

#30

Post by jacques_chester »

chewxy wrote: post #28
jacques_chester wrote: post #25

Advertising sucks because worldwide inventory grows faster than the supply of eyeball-hours to view the ads. So there's constant downward pressure on prices. Subscription sucks because you have to fight subscriber fatigue ... if you can get someone to sign up at all. People sweat over $5/month memberships; meanwhile they spend $20/wk on coffee. Micropayments suck because everyone hates the mental overhead. I have a s…

And yet, there are still sites that will command a high eCPM. The difference is of course, the audience quality. Like I mentioned in my latest blog post[0], > Real time bidding engines are getting more and more intelligent, and would be able to guess with quite good results, how valuable a user is to the advertiser. This allows the advertiser to only pay high amounts for audiences that matter to their ROI, while payi…

My original motivating problem was: how do blogs I like make money?

Blogs that aren't about answering Oracle Obscure Platform 6.75a-R2 questions. Blogs that aren't about mesothelioma. Blogs that aren't "review" websites.

Honest, good old fashioned smart people writing thoughtful stuff.

Based on who I've talked to in areas of business and politics and the visible spread of ideas in Australian public intellectual life, the demographics for the blogs I directly host are amazing. Highly paid professionals all round. They're read in ministry offices and C-suites all over the country.

To scrape some of this high-quality audience $$ I'd need to adopt a very high touch advertising policy and use invasive user tracking to prove my demographics. I don't have time or the moral flexibility and neither do the bloggers.

Hence: how do the blogs I like make money?

(Answer right now is: at their dayjobs.)

The technology I've developed allows users to be tracked visiting participating websites without the websites being able to piggyback on my scheme to track users across multiple sites. It's resistant to the visit falsification attacks present in any standard tracking scheme.

Pointless without a business, of course. So watch this space, I suppose.

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