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How can individuals, medium and large businesses make money from the Internet? |
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Like Dick Whittington's belief that the streets of London were paved with gold, some believe that the Internet is an untapped Xanadu of business opportunity. There certainly was a 'Goldrush' atmosphere accompanying early commercial expansion in the late nineties, but that led to a collapsed bubble and huge global losses. There are ways to make money and be successful on the Internet - but the scope of opportunities is more relevant to who you are, and who you represent.
Individuals and Small BusinessOn the small scale - to individuals with little or no investment seed, the Internet represents the toughest challenge. It's not that there aren't opportunities, it's just that there are so many chasing them. In addition, the competition is global, unlike in your country of origin. Many choose to open a shop, an online version of something you might find in a mall or shopping centre. There is no shortage of these businesses already, and initial dreams of virtually snipping the ribbon and watching customers virtually pour through the doors, should instantly be dispelled. Yes, you can make good money by opening an online shop and your overheads will be lower - but your competition will also be greater and someone, somewhere, will be able to get their goods cheaper (or sell in a currency more favourable to bargain shoppers). So - before you start, research your market. What's missing from the current market? What isn't currently being supplied? There are two reasons for something not being supplied. The more likely - nobody wants it. Or the less likely, but better prospect - few have thought of it.
The second major option is traffic. Create some content, or a service
(such as a portal, directory, video clip library, advice centre,
collection of jokes, etc. etc.) which other people will want to visit.
This also requires diligent research - look for the most successful
sites regarding traffic (Alexa.com can help here) and see what they
offer. What types of portal are the most popular, is the competition as
good as it could be, can I compete and offer something better or
something new? If so - go ahead (there are thousands of these sites,
with good traffic, but very few are particularly memorable). These
sites will cost you time (and expertise), but traffic is like a
snowball rolling down-hill, the more you accumulate, the more valuable
you become to other sites (affiliates, advertising, blogs, social
networks, etc.). Meaning your traffic, will accumulate more traffic.
To get to that stage of critical mass, will require a developer to build your site and some good, honest SEO (Search Engine Optimisation). Although it's certainly possible to learn how to do this yourself. The truth is it's much harder than it seems, shops are not for the faint-hearted and neither are CMS sites. Connecting to a database (which any dynamic site needs to do) requires an understanding of scripted code (PHP or ASP usually) which is embedded in XHTML, some CSS, a database (MySQL or SQL-Server usually) - some knowledge of FTP, some Unix, Apache server, graphic design. It's usually simpler to pay someone else to do it. SEO is also hard graft, requires constant re-assessment and usually substantial help. Getting that initial traffic, to start gaining a reputation, is like all advertising - you put a lot in initially and get little return - but keep at it and the rewards will come (SEO is covered in another article). Affiliation is a viable way of making money through traffic, but it's highly competitive and anything which claims to make you rich, with little work - is by its nature, designed to sound more appealing than it is.
If you're an individual - a shop, or site with traffic are very viable money-making methods, yes, both require long hours and persistence, but the market is there. Spend 10 times longer planning your niche, than you originally intended. It will repay you in untapped traffic. The best method of all? Do both and let each support the traffic of the other. For example, route people from your sports news portal to your sports shop and vice versa. At this stage of the process you're probably behaving like a medium-to-large enterprise, and they can attract value in different ways.
Medium to Global BusinessesYes - like smaller entities, large corporations can behave in exactly the same manner and follow a similar model, albeit with more seed money and with the aim of gaining a larger slice of the pie. In fact this approach was taken by nearly all large businesses during the first Internet boom, simply because there was no established model or pattern to follow. To a greater extent, this is still happening, even when the most seemingly-savvy media companies are involved.
To large businesses the Internet is often viewed as an enormous retail opportunity: b2c - business to consumer or b2b - business to business (supply chain), but that misses the wider picture. Discounting eBay, which is reselling goods through thousands of small traders, the first retail outlet in the WWW, Amazon, doesn't appear until position 35 (in the top 500) - the next is Amazon again (the Japanese version) at around 120. So the vast, vast majority of traffic on the Internet is not shopping. A small proportion is - which is still a very large market - but tapping into what everyone else is doing, is the unrealised value for large businesses.
The Internet is another channel for global corporations, and awareness can be raised by exploiting this channel. The Internet is like the largest of school playgrounds. The teachers (corporations) may be theoretically running the show, but everyone in the playground knows what's going on in the school, long before the teachers do. 'Britain's Got Talent' experienced this recently when the broadcaster (ITV) was very slow to react to the show's extended reach on YouTube through the Susan Boyle phenomenon (despite the winner from 2 years earlier, being one of the most watched YouTube videos of all time). Eventually after 2 or 3 shows, they printed a link in the final credits pointing to their own site, where the full program and clips could be downloaded. Too little, too late? Despite the tardy response, traffic still leapt by 1,200% on what was already a busy site.
The Internet is a communications 'playground' as the simile above suggests. Corporations can extend their reach in almighty jumps, by creating content and services *aimed* at this target audience. Find out what they're doing and like to do, and then commit to it. Nothing will fail more rapidly, than a corporation making a half-baked attempt at social networking. Research, discover, deliver and then commit. The Internet is a useful learning tool and some good bargains can be had - but it's main use, as all the traffic reports confirm is - a place of social entertainment. I'm not suggesting the teachers start coming to school in bling, with a mobile clamped to their ear, for 'mingling' purposes. Just that they build an awareness of what people are doing.
InnovatorsThe last category is the smallest, with the highest barrier to entry. It generally (but not always) presupposes some technical ability, since you're often creating something new.
That's just it - create something totally original, that will move everyone forward a further step. It's far more likely to come from a 2 person enterprise than a corporation so don't be put off. Google, Facebook (neither of which were original - just improved executions of existing ideas), Twitter, MySpace, Digg, Flickr, Skype. Hang in for a year and Google will probably try to buy you for several hundred million dollars. Or take the approach of Mark Zuckerberg. He turned down $1billion from Yahoo and then later $2billion from Google (though this was probably just rumour). Currently at 250 million users he should hang on - and consider buying them further down the line.
ConclusionYes, there are ways to make money on the Internet, but 'sit-back-and-get-rich-quick' schemes are ways of getting your attention and traffic. They have seriously diminishing returns and little longevity. Research and target your niche, get help - the Internet is awash with helpful individuals and communities - and start working hard. The rewards always tend to come, just when you're ready to give up.
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