Making Money Online

Although the Internet's golden glow of the late 1990s has long faded and many once-promising companies are now historical footnotes, the survivors of the dotcom bust are doing quite well these days, particularly in the business-to-business arena.

For e-businesses that offer products and services to consumers, the jury is still out. Some are prospering; others are not. While books, music, software, computer hardware, electronics, office supplies and travel services sell well, the bottom line is that e-commerce is still a tiny part of the overall economy. The good news is that in the United States and elsewhere, e-commerce continues to experience double-digit growth--although the rate of growth is slowing--according to Forrester Research.

One prevailing Internet myth--now soundly debunked--has been that once people discover your website, the money rolls in. As many failed entrepreneurs now know, it's hardly that easy. Literally millions of e-commerce enabled websites are already online. Getting customer's attention requires plenty of advertising, even if your website is branded with a name like Disney or Sony. There's a tough road ahead, so don't count on your site becoming the next Amazon.com of the Internet unless you really work at it. Having said that, you can make money in cyberspace, particularly if you run a lean operation. Here are two proven ways to generate income.

If you've spent any time online, you've undoubtedly seen ads plastered all over the Web. Companies large and small pay for banner ads, text ads and sponsored links to their websites from search engines and from other websites. Advertising rates vary wildly, depending on the site and its audience.

What determines which sites attract advertisers? Sites whose audience demographics match those of the advertiser's customer base. Let's say your company sells telecommunication services to businesses. You want executives who make purchasing decisions to learn about your product. If that's who regularly reads your blog on the telecom industry, it becomes a prime candidate to sport an electronic billboard for a telco. To put it bluntly, you're selling "eyeballs" to an advertiser. The more targeted your audience is, the higher rate your site commands.

Once again, the demographics of the Web are a key factor in determining whether this strategy will work for you. It's vital to understand who uses the Internet and who visits your site. Although computer technology makes it possible to gather some very specific data about site visitors, some demographic information is best gathered by asking for the information. That's one reason why many websites require you to register. They're trying to figure out who you are.

Rather than trying to sell ads on your own, an easy way for online publishers to make money is by joining an online ad agency, like Google Adsense.

By placing ads on content pages, site owners earn revenue each time a visitor clicks an ad. This is known as CPC or Cost Per Click. Even though the amount per click is small, all those clicks add up. Learn the Net uses this service and fully endorses it.

Another revenue model is CPM or Cost Per Thousand, whereby you get paid a small sum for every thousand banner ads served on your site. This can generate a respectable sum for highly trafficked sites that get millions of page views a month. The key here is to increase traffic to your site and the number of pages that visitors read.

Still, the amount of money spent by companies to advertise online palls in comparison to what is spent in traditional media outlets like radio, TV and magazines. Nonetheless, publishers of specialty websites and blogs can generate a decent amount of income, especially if the site is actively promoted.