How do free services on the web make money?

Post by chewxy » Thu, Mar 07, 2013, 3:26 AM UTC

boyter wrote: post #29

chewxy wrote: post #8

Earlier quoted context omitted.

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?

Post by chewxy » Thu, Mar 07, 2013, 3:31 AM UTC

jacques_chester wrote: post #30

chewxy wrote: post #28

Earlier quoted context omitted.

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,…

Post by chewxy » Thu, Mar 07, 2013, 3:50 AM UTC

jacques_chester wrote: post #34

chewxy wrote: post #33

Earlier quoted context omitted.

Ever thought of advertorials? Advertorials + rev share would be a good idea had you not listed "moral flexibility" in your list of constraints. I noticed you host John Quiggin. I used to read him a lot. This is how he would use his blog to make money: sell his books to his blog audience. Tyler Cowen, the guy behind Marginal Revolution used to have this trick where he would give you access to his private cooking blog…

When I wrote my honours project (which was the first version of the tech I developed) I mentioned merchandising; it's pretty hit-driven though. I personally make money on affiliate links to Amazon. By which I mean "I get a minute subsidy on my book habit". Some of the bloggers make a few dollars on advertising, but the amount has steadily fallen because they aren't sufficiently narrowly focused to be worth finding a…

Post by chewxy » Thu, Mar 07, 2013, 3:58 AM UTC

jacques_chester wrote: post #36

chewxy wrote: post #35

Earlier quoted context omitted.

You seem to have found the problem by yourself. IMO this would be the trough of sorrow[0] for any startup with advertising as a monetization plan - the growth but no growth phase. In my blog post I mentioned that here there are basically two paths to go - both of which you have identified. If you want to stick with advertising, choose one? [0] http://www.avc.com/a_vc/2012/03/the-startup-curve.html

I am choosing to invent a new model, actually :)

Post by jmillikin » Thu, Mar 07, 2013, 4:13 AM UTC

KnowledgeSponge wrote: post #20

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…

While I love your site, I have to respectfully disagree with much of what you are saying here. First, I agree on one main point--your site is not a "startup" or even really a "company" at this point. That said, you still very much have a product, and you are actively monetizing it. But then let's get into this point by point... You say that your ads are "non-targeted" but that is not at all accurate. Just because you…

  > you don't seem to think your site falls into the "if
  > you're not paying for it, you're the product" bucket.
  > [...]
  > People aren't paying for your product, and so you are
  > making money by serving them ads. By the nature of it,
  > any ad-supported site falls into that bucket. You require
  > more user impressions/eye balls and that is what you are
  > "selling" to advertisers/Google. This is not inherently
  > evil, and I don't think one needs to prey on their users
  > to leverage advertising.