Who is making money on the internet?

We are going to discuss some of the different types ofbusinesses on the net and how they make their money. We will thendiscuss some basic "internet business models" you can use to make moneyonline as many people still don't understand the concept of thesebusiness models. There are only four basic types of companies doingbusiness with any impact in cyberspace today:

1. Large Corporations (A.K.A. "Fat Cats")

Manyof these companies don't do anything to promote online, perhapsthinking their URL and external promotions are sufficient. And they areprobably often correct in approaching the net this way. The ones thatdo promote online prefer to purchase banner advertising on high trafficsites; a tactic that apparently pays off (We are talking here abouthuge companies like Pennzoil, Nike, CNN, etc.).

2. Medium Sized, Savvy Businesses (A.K.A."Risk Takers")

Thecompanies referred to here are the electronic cowboys like Yahoo (thesearch engine), Netscape (the browser) and Netcom (the ISP). Thesecompanies took a very different approach to business on the net hopingit would pay big dividends in the end. Many failed, but a few succeededand grew to enormous size, such as the ones listed above.

Yahoofor example, gave away free listings anticipating people would come andthe net would "catch on" with the general public. They lost a lot ofmoney with no revenue stream in the beginning, but once the internetgrew, they could charge big dollars for advertising on sites with asmany as 15 million hits every day. They got so big they were able to gopublic and make millions with their stock offering.

Yahoo took abig risk and a loss in the beginning only to reap huge rewards in theend, and the same thing happened with Netscape. They gave theirsoftware away to become a dominant force and create a monopoly on webbrowsers and then made their money by selling advertising packages, andco-partnering with other products later. A risky strategy that has paidin the billions.

3. Small Inexperienced Companies (A.K.A. "Gold Rush Co.")

Theseare small companies run by individuals who are inexperienced intraditional business or the ways of the internet. They are of the "goldrush" mentality and make the same miscalculations made by inexperiencedpeople in any business venture. These business owners often think thereis one secret to success. They think if only they could just find thatone trick, their work would be done and they could then lie on thebeach with an ever-growing bank account. But as we will see, thereisn't any one big secret, just a whole bunch of little ones!

Thesebusiness owners often think there is one secret to success. They thinkif only they could just find that one trick, their work would be doneand they could then lie on the beach with an ever-growing bank account.But as we will see, there isn't any one big secret, just a whole bunchof little ones!

4. Small Savvy Companies (A.K.A "Winners")

The"winners" are smaller companies run by experienced business people whoexhibit a high level of awareness and hard work promoting theirwebsite. These companies are currently having the best success on theWeb, just as this type of business owner is having the most success inyour local neighborhood. They usually start as one-man operations andcan grow enormously into outfits with many employees.

But whateverapproach you decide to take, learn from others' mistakes. Don'tre-invent the wheel. If you try to, you are taking a big risk. Modelyour business after another that has already proven to be successfuland yours likely will be too.

Some keys of any successful product or service:

1.Goafter a very specific "niche" market (I did this with most of my onlinebusinesses). Try to offer a specialty product or service that isgenerally unavailable through traditional retail channels. It iscritical that the target market be specifically identified and locatedonline.

2.Go after the general public - something everybody wantsand try for high volume, not the profit margin or specialty productangle. Example: An online CD store with a selection like no other andbetter pricing to boot.

In my opinion, running two or three (ormore) websites and targeting a niche for each one is the easiest way tomake money on the net. Everyone is looking for the "big buck" makersand often niche markets are ignored. This is how I have made most of mymoney online.

I offered something in demand for a small market,and expected only to make $20-50,000 a year from it. But I soon learnedthat if I set everything up to be completely automated, I could runthree or four (or even more) businesses this size in only a few hours aday. By combining several small incomes like that, it is easy to earnin excess of $200,000 a year, all for investing about an hour a day(per business) now that everything is mostly fully automated.

Ifyou really want to "retire" after you set up your businesses, hire amanager to work a few hours a day to take care of the daily chores thatneed to be completed. This is how I started. I ran everything myself atfirst, then got so busy I had to hire someone part-time, then in lessthan 1 year, had to hire 3 more people full-time just to handle thedaily operations of the 2.4 million dollars in business I do between myfour online businesses.

So when you grow a little, hire anemployee to run your daily operations. I know many homemakers with kidswho would be thrilled at the opportunity to bring home fifteen grand ayear... and often have lots of free time between 10am and 3pm whentheir kids are in school. Your help could be doing all the routinechores and you could be traveling around the world or just sitting onyour patio knowing you're making $500 to $1,000 a day doing absolutelynothing. This is not a "pipe-dream"... with today's technology youreally can do it (heck, I do! -- although I have to admit, I love towork, so I work a lot).

I hope this helps in your future marketing decisions.

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