Making Money Out of Web Hits

One of the interesting dilemmas of online businesses is ‘How to make money out of all this traffic?’

It is a dilemma because in most cases the biggest hits on the web are sites that were not started to make money in the first place. Those that were started with the objective to make money, seldom did. Anybody among us who have tried their hands in building e-commerce sites, would most probably have experienced that bitter discovery. Making money on the web is hard (unless you join the dark side of porn or not-so-honest-MLM).

In Malaysia we’ve seen loads of money been thrown into sites like Catcha.com, Bluehyppo.com, Gua.com.my and innumerable others with negligible commercial success. Before anyone start self-humiliation thrashings, bear in mind that even global names like YouTube and Twitter is finding it hard to monetize the gazillions of traffic on their sites.

I don’t know what is the latest traffic count of YouTube today but you can bet that it’s huge. Now owned by Google that’s flooded with cash, they can afford to sustain but they’ll have to start to contribute to the bottom line soon. As far as I can see, Google is banking on the ad-supported model. You can see plenty of ads appearing on a layer above the YouTube videos nowadays. From what i can tell though, this model has not been bringing in the level of money required.

An interesting service is Twitter which has grown tremendously. Currently, they’re handling 50 million tweets a day, a 2000% increase from 2.5 million tweets per day in 2009.

With only 140 characters per post – certainly no room to squeeze in ad in the post.

Most of the Twitter users seldom visit Twitter websites either, relying on 3rd party apps to read and post their updates. So this make context-relevant Google-style ads on the website less effective.

The industry has been observing Twitter executives, how are they going to make money. And, until recently it seemed that they have no reliable plan in hand.

However, things have changed. Twitter has came up with a novel solution. They signed agreements with search giants Google, Yahoo and Microsoft – so that they have access to all public tweets. In turn, they can then develop whatever tools to process and publish Twitter posts as part of their live search results. Twitter call it ‘firehose’ of tweets (you know like firemen’s hose with unlimited gush of water) as opposed to the rate-limited API being used for free by 50,000+ applications today.

This back room data-mining

licensing arrangement has enabled Twitter to charge and collect money. It’s actually quite a good arrangement since the users are not affected directly. They never see any intrusive messages. Maybe there are privacy issues but public tweets are publicly available anyway.

What does it mean to us, mere mortals, though

The lesson here is – don’t just look for a direct way to make money.

Making money out of selling information has been available for a long time. The value of database has always been known though not utilised by many.

So if you have a popular blog, portal or applications, find out the characteristics of your traffic and think who will be interested in them? Maybe there’s somebody who is willing to pay for it.