Making Money on the Web

Web Tools for Developers

2007-03-09T15:56:00.000-08:00

Someone forwarded a great article about web-based tools for developers. The author chose some great products for project planning, development, issue tracking and usability testing. If you need website development tools, check out this web tools article.

A good online file storage site - www.dropsend.com

2006-05-18T08:04:00.000-07:00

Was referred to a good site to store files online. The site is www.dropsend.com. For free, you can set up an account and store up to 250MB of files in online folders. You can also mail up to 5 e-mails a month with large file attachments. dropsend.com offers other plans for which you can pay for more storage and e-mails.

Check it out!

Increasing ECommerce Sales by 5% in Just 6 Weeks

2006-05-16T07:01:00.000-07:00

Ambitious claim for an article, but it describes how Orvis' Director of ECommerce did a 6-week proof-of-concept to try to improve e-commerce sales by 5% in just 6 weeks. Although he did not reach his goal, he did increase sales per visit from 2% to 5%, depending on the category.

Read the article for the details, but it appears that tweaking the home page had the biggest effect. Specifically, the development team did the following:
Monitor new items and add or remove within a day - Categories with 10% conversion rates were kept, and categories with 3% or less conversion rates were rotated. He found that with 24-48 hours on his well-trafficked site, he had enough information to judge conversion rates.
Keep high converting categories represented at all times - Categories with lower traffic but higher conversion rates produced more sales, so he kept them on the home page at all times.
Look at navigation - The team observed that the left navigation bar (there are 4 ways to navigate) was used the most, so they focused on making that the best possible. Depending upon the page, the nav bar changes to give users the choices they want.

Read the article to learn more about Increasing ecommerce sales.

Interesting Article about Web Site Analytics

2006-05-10T06:55:00.000-07:00

This article from Internet Retailer had some interesting tidbits about analytics site metrics to improve sales.

Web Site Analytics

How Registrars Make Easy Money on Parked Sites

2006-04-26T08:47:00.000-07:00

Just read an interesting article written by Bob Parsons, the CEO of GoDaddy.com - . It talks about an add/drop scheme of how registrars make money using parked sites and a 5-day grace period for registering domain names. I'll include Bob's explanation of how it works, but here's the general idea:
A registrar will register as many domain names as it can on Day 1. It immediately creates basic web pages filled with targeted advertising for those domains. Registrars have 5 days in which they can cancel the domain registration and still get a full refund. So, the registrar collects whatever revenue it can from the advertising, and on Day 5, it cancels the registration and keep whatever advertising revenue was made. Pretty clever. Not sure if individuals have access to the same grace period. I imagine that registrars tack on a fee, so it would be harder for us to generate the same revenue for free.

Here's Bob's explanation of the process:

How the add/drop scheme works – first they make a large cash deposit.
The registrars who participate in the add/drop scheme first make a large cash deposit with the VeriSign registry.

Then they register as many names as the deposit allows.
Next, they go out into the market and register as many names as their funds permit.

Then for each name purchased a web page with search engine links is created.
For every name they register, they have a system that puts up a smart web page with traffic links tailored to that web name – so that if an Internet user lands on the page, they might be likely to click on one of the associated links. For example, let’s say they purchase a name called BaltimoreDocters.com (sic) they might list a number of associated search engine links for medical specialties in that city.

When a user lands on one of those pages and clicks on a search link money is made!
If an Internet user somehow lands on that page and clicks on one of the links, then money has been made! If the Registrar would go ahead and pay for the name, there wouldn’t be a problem.

But these add drop registrars never pay for their names!
Now let’s say that the 5 day grace period is ready to expire – what now? The add/drop registrar (or their client) simply drops the name. And then after dropping it – the registrar’s money on deposit at the Registry is instantly refunded. So, the name was used by the add/drop registrar – and some money may even have been made – without actually purchasing the domain name. The returned funds can then be used to register more names.

It doesn’t take much for a name to stay in an add/droppers portfolio.
How does the add/dropper decide which names to keep? As long as it throws off more revenue than the opportunity cost associated with the .COM one year registration deposit – this amount is very low and could be as little as 36 cents. For example, the deposit required to register a .COM name is $6.00. If a add/drop registrar has an annual interest cost of 6% the name only needs to earn them 36 cents for them to keep in their portfolio (36 cents = $6.00 x 6%).

You can read the entire article about registrars and parked sites here.

Online Bartering to Make Money on the Web

2006-04-17T11:14:00.000-07:00

I just read an article about a guy who is trading his way to owning a home. He started with a red paper clip which he bartered on Craig's List for a pen, and he has been on a roll since. Now, he has traded up to a year's lease on a house in Arizona, and he's still working on to barter for a home. The article can be found here: online bartering

As a personal observation, I wonder if bartering sites such as Craig's List can yield better returns than a site such as eBay. Selling something on eBay is typically subject to the 7-day auction time restraint (you can pay for longer auctions.) If interested bidders don't find your item within the auction timeframe, you cannot reap the true cross-bidding benefit of the auction model. If only one person bids, it's not much of an auction, is it? With so many items for sale all the time, is it possible for the auction to lose its effect? Part of the reason why people pay more for items in an auction is because they have to buy it NOW or lose it. If they know there will be another auction for the exact same thing tomorrow, buyers do not have that same impetus to bid now.

With bartering, on the other hand, you can leave an item available until you find a price or trade that you think is fair. As long as you can hold the item indefinitely and the place where you are trading gets buyers interested in your goods, you can wait for your price.

Thoughts?

Conversations with an Ad Network Company

2006-04-14T13:07:00.000-07:00

So today i spoke with a guy at www.bluelithium.com My goal was, for the travel website im considering buying, to better understand a) if advertisers would be interested in this type of a site, and b) what kind of incremental income I could make by doing so. He seemed very excited to get a travel website into their network, and listed off several major airlines and others that would be advertised on the site. Apparently he said I could expect to be paid about $1/CPM (so thats $1 for every 1,000 impressions). The site currently generates about 2M impressions per month. He also said they are trying out some good CPL (cost per lead) placements. In the case he cited, all the person has to do is click on the button, go to the linked site, and provide an email and that counts as a lead and you get $2 for each lead. He says the CPL is performing better, but who knows. He also said that a site like ESPN.com is able to charge $40-50 per 1,000 impressions, versus the $1 I'd be getting. This is because they are able to sell directly to advertisers. Makes you wonder how much you are leaving on the table!!! Sounds like bluelithium may be taking the lion's share! I'm beginning to wonder if it would make more sense to find a few good independent reps and give them 40-50% commission on first year's sales...

Finally, I think the sales guy at bluelithium may have pulled a sleazy move. I made the mistake of telling him the website that I am considering purchasing, and I spoke to the owner today and she said she got a call from an ad wholesaler. I am double checking with her to see if it was them, but if it was, major scum move. But lesson learned on my part!! Keep info safe.

How much to compensate advertising reps

2006-04-13T18:49:00.000-07:00

I am currently in the process of evaluating a couple of different content-based websites (travel guides to be exact), with an eye towards purchasing one of them. They make their money from advertising, an industry which I have zero experience in. Nor am I the world's best salesman, so I think I'll need to contract out to some independent ad sales reps to get the job done. I have to admit I'm having a lot more trouble locating these people than I thought I would. I've tried numerous google-type searches, but no luck yet. If anyone knows how to dig these guys up, let me know please! Also, I read an interesting article on how to compensate these guys, depending on what type of commission structure you set up. I'm definitely thinking 100% commission, for which the article recommends 40-50% of the sale goes to the rep. It's a whallop, but the way I see it, after the first year hit, you've got that company advertising with you and you don't need to pay the same level of commission to the rep the next year. You may opt for a trailing commission, say 20% in year 2, and 10% in year 3 assuming they renew. That also gives the ad rep incentive to bring in the types of companies that would be likely to renew. Anyway, here's a link to the article that deals with compensating ad reps: http://www.entrepreneur.com/article/0,4621,310791,00.html

This article confirms my suspicion that these guys are indeed hard to find, but that there may be a big demand for their services (any lightbulbs going off?): http://www.ojr.org/ojr/blog/200603/1031/

The article also touches on the concept of ad networks, something that I've only heard in passing and am not familiar with...I'm going to research them and get back to you all.

Great way to get help building your web business

2006-04-11T07:48:00.000-07:00

I am currently in the early phase of conducting due diligence on a website that I am considering buying. While I think I have some decent business sense, I am very weak on the technical aspects of analyzing and evaluating web sites, so I needed to find someone who could help me take a look at the site I am considering purchasing. Along comes Elance (www.elance.com). Elance is a very cool website which is basically a market where professional services providers can bid on projects. Just yesterday I put up an RFP (request for proposal) for the due diligence project that I needed done. It didnt cost me anything to do, and in fact its the service providers and consultants who end up paying Elance. I have already received 3 bids, one of which looks pretty solid. Many of the technical service providers are offshore (India, Singapore, etc) which is no surprise since they can underbid most of the US-based players. There is also a very nice feedback system so you can see how many projects a bidder has completed to date, and whether or not they have done good work (there is a simple 5-point ranking system). Its a great way to find affordable, expert help.

I haven't actually accepted any bids yet, but I will follow up this entry with an ex post facto and let you know how they did!

Cheers,

DC Chicken

Internet-Based Software Components

2006-04-05T14:07:00.000-07:00

In today's NY Times, there is an article about Internet-Based Software Components. The article talks about how open source software has sped up the development of interchangeable software components which can be used to build new programs. As example, the article mentions Writely, a web-based word processing program that was recently purchased by Google and S3, an online data storage tool.

Peer-to-Peer Lending Online: Another Online Broker Business Model Example

2006-04-04T14:37:00.000-07:00

Prosper.com is a peer-to-peer lending site. What this means is that users log on to borrow money, and other users acting as lenders bid on the loans. When the auction time is up, borrowers get the money and pay back the loan in monthly installments for 3 years at the prevailing rate of the bids.

It's another great example of the online broker business model for making money online. You can read the entire article here:
peer-to-peer lending online.

Save Money on Stock Commissions Using the Web

2006-03-31T06:43:00.000-08:00

I currently have a stock trading account with Ameritrade, and the commission per trade is $10.99. I figured this had to be a high rate given the competitiveness of the market. I went to Finance.yahoo.com and sure enough, I found that Scottrade.com has $7 commissions. So, I called Ameritrade and said that I was going to switch my stock trading account, and the operator said that we could negotiate on the commissions. I asked what that meant and within 5 minutes, a manager had adjusted my brokerage account to match Scottrade commission rates. That's an extra $8 I earn for every buy/sell combination.

If you have a stock trading account, you might want to try the same.

This was so easy that I wonder where else I can negotiate for lower rates.

Web 2.0 - What Is It?

2006-03-30T16:01:00.000-08:00

SEOmoz gives a good explanation of Web 2.0. Here's the link to the Web 2.0 Explanation, and I've included a clip from the article below. In general, Web 2.0 describes a new trend in web development that makes sites more user-interactive.

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As with all things online, the Web 2.0 phenomenon is somewhat amorphous. Semantically, tacking a version number to the Web doesn't make sense (and few agree on what it means) but practically, "Web 2.0" refers to a recent rebirth of sites that focus on user empowerment and open-source applications online. There is a loose set of criteria that bind these sites together and creates the synonymous language that web mavens like Michael Arrington (TechCrunch), John Battelle (BattelleMedia) and Tim O'Reilly (O'Reilly Network) have adopted. In many ways, these elements can be thought of as the formative definition of Web 2.0:

User generated and/or user influenced content
Applications that use the Web (versus the desktop) as a platform, in innovative ways
Similar visual design and shared functional languages
Leveraging of popular trends, including blogging, social tagging, wikis, and peer-to-peer sharing
Inclusion of emerging web technologies like RSS, AJAX, APIs (and accompanying mashups), Ruby on Rails and others
Open source or sharable/editable frameworks in the form of user-oriented "create your own" APIs

Like many loosely defined, emergent fields, however, Web 2.0 is often said to be in the mind of the observer. Even some of the trendsetters and writers in the field use the phrase "I know it when I see it." The above concepts represent only a rough framework and many sites that fall outside these ideals still rate the classification.

Not all of Web 2.0 is serious business, though. Many "Web 2.0 themed" sites are built just for fun and others are built entirely to satire Web 2.0 or the excitement about it. Take, for example, the Web 2.0 Validator, a tool that will tell you exactly how "Web 2.0-esque" your site is based on how much of the applicable technology it employs. There are Web 2.0 checklists, varying in degree from simple to complex, and even those that will tell you how to make your site "look" like a Web 2.0 application (Web 2.0 Design). If you think you want to give it a try, you can generate your own "VC friendly" Web 2.0 company name and product with the Web 2.0 Name Generator! There's even Web 2.0 Bingo.

Web Site Ideas - Food for Thought

2006-03-30T15:23:00.000-08:00

SEOmoz just released its list ranking the best Web2.0 sites, grouped by areas of innovation. This just has a wealth of information. Talk about some great business ideas that people have had. The list also contains interviews with representatives from the winners, so you can get their perspectives on how they developed their winning ideas.

I've used several of the sites before, and some of them really do make using the web easier, so I would recommend that you consider using them yourselves. The more you familiarize yourself with these tools, the better the chance that new ideas for making money on the web will come your way. Besides, they really can make your life easier.

I'll post another entry about Web 2.0.

Content--even directories--is truly king

2006-03-21T14:24:00.000-08:00

Sometimes something as simple as a directory (or many of them!) can make you a million bucks. Check out this ad text pasted from http://www.goabroad.com/advertise.cfm;

Averaging 500,000 visitors, 1.25 million pages and 9.25 million hits each month GoAbroad.com is among the most visited directories of its kind. the numbers alone are not as important as the quality of traffic. GoAbroad.com has 275,981 active subscribers to its newsletter. limited advertising space and detailed listing information means more informed and efficient traffic to your site.

pretty amazing huh? you can bet the site is making millions off of this sort of traffic. very little, if any, really compelling content...just directories and loads of ads. bravo.

Welcome, bienvenidos, gezuar, sawadee kap!

2006-03-21T07:41:00.000-08:00

Welcome to my first post! First, a little bit about myself. I go by the moniker of The Dark Chicken, a menacing mafioso that rose to the top of the poultry underworld. But all silliness aside, I'm just a 30-something guy who has worked in the business world for most of his adult life, but is tired of the grind, tired of working for idiosyncratic bosses, and realizes that he is never, ever going to become rich working for someone else. My motivation is simple: a desire to have more control over my own life and destiny, such that if I want to go travel to Spain for 3 weeks, I can do it. And the only way I can see this becoming possible at this point in my life, while still earning a good income, is to start doing business on the web. The internet is the answer. The answer to economic freedom, freedom from the bonds of the capitalist grind machine. It is your way out, Neo.

So, this blog is dedicated to all things internet that in any way, shape or form connect with making money. Whether it be buying an online business, examining various e-business models, figuring out new plays with content, mastering adsense, vetting bizarre money-making opportunities, etc., this is the place to talk about it.

I don't claim to have many answers at this point. All I do claim is a strong desire to enter the game, and a willingness to experiment.

Cheers,
DC