How do websites make money?

[Entrepreneur101]

Hey guys... Sorry for my websites making money ignorance, but I'm clueless how they work and how they make money.

Well I know how websites like eBay or websites that sells something works, they make money from selling, duh. But how do blogs and forums make money?

Like this website for example, how does YE make money?

Can someone explain it to me.. I really want to know because I've been thinking of making my own site.

Thanks

[dfveteran]

Advertisements, affiliates, paid to click, google adsense, there are lots ways.

[Fadzuli]

Well do you see the advertisement above?

YE charge people for that!! Personally I use google adsense on my blog and a few other pay-per click systems and I do have other advertisements on other sites.

[tazman9r]

Advertisements, affiliates, paid to click, google adsense, there are lots ways.

dfveteran is absolutely right!

Think of it this way.

A website is kinda like a magazine in that it is largely "read" oriented media. It is also like television in that it is becoming more and more video oriented as well. Both of these mediums use advertising as profit centers. Individual sites also use membership fees, not unlike a subscription to a magazine, to charge customers to view material.

Search engines use many different incarnations of the "Pay Per Click" mindset, as well as "Pay Per Impression". I recommend going to Google and viewing their tutorial about how their system works. When doing this it is very important to understand that the numbers of impressions and clicks Google deals with on a daily basis are enormous. Get very well educated if you want to do business with them.

An affiliate is someone who gets paid by helping sell another person's product. It can be very lucrative and is great for learning how to do web marketing without having something to sell, make, or write. Adsense is a type of affiliate marketing, in that you put their ad on your website and they pay you when people click on it.

There is always hosting, or charging "rent" to others for putting websites online on your servers.

And then there is selling something directly. If you have something to sell, design a website to promote that something (product or service) and then learn ways to market your website to gain traffic.

The most important thing to remember is that you can design a method for who you charge for what, and how much. Your only limitations online are the physical constraints of computers.

[warrensway]

I liked the analogy of a website is like a magazine, explained perfectly.

[GoldPactPower]

HOW DO WEB SITES MAKE MONEY?

This is the question of the age - how can I take my talent for creating an html document and earn a dime, a dollar or a million bucks?

Developing a web site qualifies you as an IT person. In the old days, to be an IT person you had to know COBOL or FORTRAN or PASCAL or C, which grew into C++. You wrote SOFTWARE for some hospital or insurance company and usually created databases and reports derived from the data.

Like many high school students I sold pot to make money and towards the end of my teens I figured out this was not a wise thing to plan a future around. A few machine gun charges (fortunately no convictions) and a couple of attorneys convinced me to go to college and learn something legal. I chose computer science and before I could even get a degree I was poached by an HMO and was writing COBOL and earning $35,000 a year. Not bad for a punk in the mid 80s.

I felt the transition to a legal career was so refreshing I created the Kids Computer Kamp - free PCs for Kids program (since 1983) so other kids from the hood could walk away from the life I had known and step into a legal career. Since then we have had 1000s of kids go through our classes and given away 1000s of PCs. We've never charged a dime for the labs or equipment and we've had gang bangers, drug dealers, hookers and car thieves come to us and walk out as 3-D CADD designers, graphic art designers, web editors for companies like Wadsworth/Thomson Learning producing online college content and I even had the father of one little hooker, a gorgeous girl who believed in herself and made it to a high tech career, fly out to California from the East Coast to buy me dinner for getting his daughter out of the old trade and into something productive. I will cherish the transition I made and have helped others make for the rest of my life. We still do the labs and you can learn more about them at eduhosting dot org.

Until 2000 my salary as a programmer continued to rise and by 1997 I was earning $150k a year writing financial software. I had a house by the beach with a pool and spa and the gorgeous ex-model wife. I surfed when I wanted, drove nice cars and life was pretty good. I became known as a HIT MAN. If your company was making a little money, your CPA or attorney would hire me and I'd make you rich.

Example: the University of Phoenix went from 7 to 21 campuses in under 3 years with classroom accounting and sales and marketing software I wrote for them. They exploded and are now the dominant force in online Universities.

Example: Mission Industries (the white laundry vans) went from 65 to over 200 facilities world-wide in under 2 years after I wrote their plant and fleet maintenance software. They are in every city on Earth.

Example: a nuclear power plant was being fined by the NRC. My software stopped the fines in under 3 months.

Example: a bank was almost bankrupt due to a huge Federal probe, arrests and more. They hired me and are now once again one of the largest institutions on Earth.

Example: a client needed a system to handle their invoices for offices all around the world. Software I wrote for them has run for over a decade, has never required a single repair or patch and no human has ever touched a single keystroke - it runs completely automatic. They grew to $360 million a month in billings.

I know how to grow a business IF they have a good concept AND they take my advice AND I design their systems and write the code and the training manuals AND they follow my instructions and use the stuff I design for them.

Everything for me was pure gravy in the 1990s - really sweet life, gorgeous wife, nice cars, lotta surfing - what more do you want?

One day this thing called the dot-bomb struck and in the blink of an eye I couldn't make bartender wages. Heck, there were Mexican busboys who earned more than I did. It was a real shock and my entire empire fell apart. I couldn't afford to teach the KCK labs anymore. I had to struggle to eat.

I turned to the web to try to make a dime or a dollar and like so many people, I just wanted to make a web site that earned SOMETHING. Prior to that I rarely even went online, I can't even remember if I had an email address or not. I mean, all day long I wrote software for big companies and the last thing I wanted to do was go home and log in and get into the 'email' game or learn how to write html - the language of web pages. Now in 2000 I had no choice, but to focus on learning an entirely new set of skills.

I learned html, javascript and perl, which is the language of the CGI or back end interface that allows users to post form data to a flat file or text file, stored on your server. If you just focus on html and javascript, you can make pretty pages, but they don't really do anything like trap names and phone numbers or data you can recover so your web site is kinda weak. You need to learn some sort of CGI language that can write data to your server. PHP and PERL are two common ones, but I've found PHP to crash a lot and I like robust - never crashes software (what I always wrote) and focused on Perl. It has served us well.

I tried all kinds of web sites. My first one grew into the largest diamond web site on Earth. It was pretty clunky and never made me a dollar, but with my Perl I could tell my server to go to all the other diamond web sites, get their prices and mark them up by 3 percent and present them on my web site. I started a diamond chat room and collected names of custom jewelry artists and had a few visitors, but no money to show for the work.

(continued)

[GoldPactPower]

HOW DO WEB SITES MAKE MONEY?


So the first thing I would say is after you have built a web site, you need to have a marketing campaign in place and a customer service department and a site meter (all our sites have site meters now) so you can run a small ad somewhere, whether it is a link exchange or an ad in a newspaper and drive traffic to your sites. Without a marketing campaign, no matter how beautiful your website, you have nothing.

I tried all kinds of other web sites and a friend asked me to do an adult site for him so I did that. Other friends asked me to partner with them and do more of them, but since I had worked with kids and hookers etc., trying to get them to go straight, this wasn't something I wanted to do...sell DVDs or content of a girl giving a blow job when that girl could be my next door neighbor's daughter catching HIV with her new XX career.

What I did do (excuse me) was develop a few adult sites that men tried, but could not log into - such as "BOOK A HOOKER" web sites and tested my marketing campaign, drove traffic to the web site with "GIRLS - CREATE YOUR FREE AD HERE" ads and plenty of hookers signed up to post their free ad. I got to know nearly every escort on the country. But when men tried to book them, the scripts would 'bomb' (intentionally) and nobody ever booked a hooker on our site.

Instead, the purpose of the site was to start spamming the hookers from a third party web site with "LEARN A FREE SKILL - WORKING WITH COMPUTERS" and we got a lot of them to take the KCK classes or at least study the materials and hopefully get some new skills to get a legal job. So here was an adult site that was a front for a charity to locate girls and try to get them into legal careers. Did it make a dime? Never, but it worked well and we still have them out there online today - a neat trick, a dirty trick if you wish to say so, but good for humanity just the same and one of my favorite campaigns.

Still...no money from the web sites. Very sad.

In 1996, at the height of my software earning days I had taken my charming wife from the home and we had moved to a sailboat. I love surfing and wanted to live right next to the ocean, perhaps even sail around the world. In 2000 when the money disappeared so did she and I couldn't afford to keep the sailboat at the dock. The harbor master told me to take it to the anchorage where it was free or I would lose the boat due to all my back rent. So I did.

A friend of mine, a fellow sailor at the dock, had been a NASA Physicist for 40 years and said to me "You're going to need a wind generator out there at the anchorage. Let me show you how to make wind gen blades." and so began a 6 year relationship. Each Saturday I would go to his boat with my wood carving tools and he would break out all kinds of books on tips and tricks for wings and teach me aeronautical engineering. By 2003 I had made about 15 4 to 6 foot wind generator blades and got most of my power from those, with very little input from the tiny gasoline generator I also had for back up power.

I kept trying to FIND A WEB SITE I COULD PUBLISH (yes, it is a lot like running a magazine) AND MAKE MONEY. But I was poor - very poor by now - and my friends kept saying "Go get a normal W-2 job like everybody else." and I would reply "Damn it. I have aways made my money with my own two hands and my brain and if I can't do it, I'd rather just die. than work under florescent lights like an office whore." and I kept at it. To date I've personally authored over 15,000 web pages, built well over 100 web sites and can put up a basic web site, with home page, contact us, about us and music or video from scratch, all the way from registering the domain name, setting up the record on our server (we own our own co-lo server) and writing the html, javascript and perl, uploading the images and html and scripts and finish the job from start to end in less time than it takes you to order me a double 1800 on the rocks and deliver it and I drink it and finish the web site before we finish our round of drinks. Yes, I am that fast and did that hat trick for a big eBay executive who was dating a DJ who wanted a DJ web site with his music on it, contact, about me etc. The girl was thrilled her deadbeat boyfriend finally had a web site to get some work and the guy was pretty amazed that before he had returned from the bar to our table with my drink I already had his domainr registered and his home page up and flying on the web.

What might amaze you is that I don't use wizards or any kind of front page or dream weaver crap. Every single web page I have ever created was made in an ancient DOS editor called Norton Edit, (from the famous Peter Norton) and that editor was created in 1985. It is 100 times more powerful than notepad, I am a whiz at using it, yet it only takes up 29K of disk space and runs in DOS where old programmers like me spent most of our life writing code.

In other words, I code from scratch in raw html. My pages are 10 times smaller and load much faster than the same page made with a wizard and I can write them quickly and keep the code very tight. This is not to say you should do it that way too, but when bandwidth is an issue, a small page of code is a good thing.

Still...with all of these wonderful skills...I was dead broke. I would mix hot coffee into empty peanut butter jars to get my daily protein. I had tried sending my resume out in 2000 and 2001 - about 5000 times I think and in the old days I would land 85 percent of the jobs I applied for. My resume is packed with all kinds of great references, but the only thing I got was one job working with 80 programmers from India paying about 1/4th of what I used to earn. I had to quit that job when I realized they were over billing the client and most of the staff knew absolutely nothing about writing software. I couldn't be part of that operation and left and never worked another software contract again. Now I only build web sites for me or for friends.

(continued)

[GoldPactPower]

HOW DO WEB SITES MAKE MONEY?

It was a turning point when one of my teeth went bad and I couldn't afford to pay a dentist to remove it. Out on my sailboat at anchor I rigged some sailing twine - really strong stuff - took a couple of shots of gin - tied the line over a beam above me and down to a 50 lb solid stainless 1 1/2 inch rod about 3 feet long, raised it with my foot, looked up and snapped my foot out from under the rod and watched my tooth ricochet off the ceiling. I looked in the mirror and said "Ok, now you're an Oakie." and when a second tooth went bad a short while later and I repeated the process, I said "Ok, now you're a real pirate." To this day, although I have the fake teeth to put in my mouth and hide the double tooth hole up front, I rarely wear it except at meetings with Heads of Foreign Nations or lawyers or billion dollar bankers. I want to remember how I bled, literally, and cried and wailed, begging to MAKE SOME MONEY SOMEWHERE WITH SOME WEB SITE and get to where I am now.

My friends remarked "You make such a beautiful blade. Why don't you try to sell one on eBay." and in 2003 my answer was "No, I don't want to be a wood carver." and I kept trying to find the magic web site that would earn some cash. Finally in May 2004, with my tooth experience and peanut butter jars as empty as ever, I broke down and ran an eBay ad>

"Used wind generator - $175 bucks" and BOOM - it sold.

Ok, I said to myself, let's try

"New wind generator - $250 bucks" and BOOM - it sold -

Wow...ok...I said to myself "You used to write financial trending software and it is pretty obvious that if you want to be a wood carver you can eat. Within one month I was 12 blades back ordered (they take a long time to make), but at least I had some cash and I resigned myself to making wooden wind generator blades. To date my hands are known around the world for making the most beautiful airfoils on Earth. Nobody makes a finer blade anywhere and they kick butt - known for their beauty and power and quiet operation, they are the jewels of the industry. You can see one at eduhosting dot org slash windpics slash mohogslim dot jpg or mohog7a dot jpg or mohog7b dot jpg for a few to view. So far I have sold over 400 of them and never had a single return. If you read the feedback from our customers, you'll see things like CALL HIM MR SUPPORT and MOST BEAUTIFUL THIS AND THAT etc. because I take a lot of pride in our product and over time, built what has become the largest network of renewable energy web sites on Earth. We have customers from all around the world either buying the blades or getting the CD or online class to learn to make them in their garage.

One day in 2006, a guy calls me and asks for blades for his wife's cafe in a foreign nation. I say fine - we can do that. It turns out a lot of people knew him - it was a small island nation and he was a General Contractor there - and the next thing you know he has casino owners paying $400k a month for power asking about wind turbines and Senators coming to the cafe asking him to cure their national power problems. I said "I would love to do that, but we do small wind gens. You are talking about megawatt power and we don't do that." and my customer says "How do we make it so you do?"

The next thing I know my pal, the Limo driver (see other thread) and this customer are ponying up the cash to send me to a conference to learn how to build and finance wind farms. One of my old software clients was a nuclear plant and I wrote nearly all the software to run that generating station, so running a wind farm is, by comparison, a piece of cake. When I returned from Manhattan, my focus became building an International Team of Field Reps to sign deals and for one year I traveled the world shaking hands with politicians and engineers and have written new energy law for foreign nations, designed national renewable energy policies and helped colleges develop classes geared towards renewable energy and supporting trades, like welding, electrical work, heavy equipment operators etc.

(continued)

[GoldPactPower]

HOW DO WEB SITES MAKE MONEY?
A year later, on January 4th, 2008, a third party audit team went through our contracts - we had $14 billion in signed renewable energy contracts. As of this writing we are at $52 billion in signed contracts. I own 100% of the stock of my company, have very low debts (and am single - heh heh) and goldpactpower is considered the fastest growing wind farm developer on Earth....literally zero to $52 billion in about 16 months.

This was completely out of the blue. It started as a wood shop blade carving business - absolutely the last thing I wanted to do - along with training from a NASA Physicist, GE and the AWEA, backed by my background in law, software, audits and finance and my ability to take $10 - $20 million dollar companies, like UOP and Mission and double or triple their size with good marketing and accounting systems.

So...in answer to the question, HOW DO YOU MAKE MONEY WITH A WEB SITE?

I would have to reply:

1. Try everything and anything until you find something people want to read about or learn about or buy. It might be pet food or it might be lingerie or it might be a book you wrote or children songs your best friend plays on their simple guitar...but you need to find a niche market. In my case, it turned out to be renewable energy and my CPA said I was lucky - as oil prices go up, I make more money.

2. Be less concerned with fancy flashy web pages and more concerned with the product or content. This isn't to say you have to avoid beautiful pages, but focusing on glitz instead of the meat is a way to become enthralled with your own handi-work instead of finding a real product and a real market.

3. Limit your text - try to keep pages viewable within one frame without scrolling. I am the WORST - ABSOLUTELY WORST violator of this principle. My friends are constantly telling me to chop up my pages into others, to get editing help and pare down my text from 50000 words to 5000 or even 500. We had to go through our main site a month or so ago and do that and revamp the whole thing. The old site is still out there on the server - really ugly compared to the new one - and if you visit windgenzen dot com you will find that HUGE RENEWABLE ENERGY EDUCATIONAL SITE with all the solar cookers and wind blade carving classes, battery desulfators and all that stuff is one of the most jumbled nightmare messes I ever wrote. I get constant whining from users to straighten out that site and frankly, I just don't have time....the megawatt biz is booming for us now and that windgenzen site, since most of that is free edu info anyway, is the way it is until we get some folks to clean it up.

DON'T BE A MOUTHY WEB AUTHOR AND OVERWHELM YOUR VISITORS or you will be a pain-in-the-butt schmuck like me - bad - bad - bad.

EDIT-EDIT-EDIT

4. Got visitors? Fine. Get advertisers. This is the first place people look to for revenue.

5. Got a good product? Fine - market it and don't spend an arm and a leg doing it. Try 5 little tiny test ads and then throw out the worst 2 or 3 and replace them with new ads. Always keep your best 1 or 2 and continue to replace the bad ones until you have 4 or 5 or 10 good places to market your products. THEN take a larger portion of your revenue and focus it on the good spots to market.

6. Got a good service? Fine - make it free until you get a lot of viewers/visitors/users and then slowly add features that cost money. Yahoo was built with that model and it works if you don't piss off too many people too fast by charging too much too soon.

7. Wanna skip all this and earn a million bucks right now? Great. I want you to earn a million bucks right now too and I'll tell you how to do it with the crappiest little do-nothing web site you've ever seen....

Just go to our site and sign up as a scout.

We will build you a one page web site - not much to it.

We will teach you how to set up renewable energy projects in your area.

You will earn well over a million bucks a year saving the planet.

You will get out and breathe fresh air every day instead of sitting around locked on your damn PC like a troll. Believe me, every time I get to unplug from my lap top and the internet, I am happier and healthier and so will you be.

The internet is a virtual world, a virtual magazine, pure electron stream that goes from one place to your screen to your eyes and ears and brain like a laser. From a metaphysical standpoint, it is probably not very good for you compared to the aura and experience of being in a field of flowers or a grove of redwood trees or in a kayak on a mountain stream.

It is a place to earn a living, perhaps, but not a place to enjoy life and I honestly pity the new generation of programmers and web developers who are getting into the life I lived for nearly 30 years now. There are ups and downs along the way. You get rich, the economy tanks, you get poor. You get the nice house, the gorgeous wife or husband and things go sour and you move into a school bus (we did) or sailboat (we did) or are homeless - a lot of programmers are homeless these days due to the outsourcing to nations overseas and when economies go belly up, that's just what happens...along with real estate agents and bankers...lots of newly homeless people out there.

Get smart. First, get outside and run or bike or swim and that will improve your overall brain function and you can develop healthy publications to help others and those usually attract visitors. Whether it is how to build a wind gen or make hot water on your roof or how to dress in all natural fiber and buy your healthy line of clothing (online of course) or some other healthy attractive product, it starts with you being a healthy person, inside and out. That glow will translate to everything else you do in life and that glow doesn't come from a laptop or hi-def screen. It comes from being outside in nature.

GO THERE and meditate and I bet you'll find some product or service that makes you a few bucks and if you're lucky, a few million.

Or cut to the chase and we'll build you the cheap-o site and you'll make the bucks in the blink of an eye shaking hands with farmers (a healthy hobby) and driving down country roads (a nice view too).

You have a limited time or number of seconds on this Earth. My hope is that you spend them helping others, teaching others, using your artistic expression to thrill your own inner child and you never know...some times just making a beautiful wooden product, absolutely the last thing you thought you would do for money, can turn into a billion dollar business almost overnight and all your high-tech skills, while valuable, really had very little to do with the market you found or the friends you made along the way.

And that is just the way life worked out for me.

I hope it works that way for you too.

Take care.

(End)

[RLorenzen]

I think GoldPactPower should get the award for the longest post in YE history. Holy crap.