Ever have a tire that keeps leaking and instead of just replacing the tire or rim, you just keep putting more air in it? Kind of stupid when you think about it right? To be honest, it took me about 2 years to figure it out why my site was leaking, and instead of fixing it, I just kept putting more "hot air" in it. Its human nature to fix something when you "think" it's broken, but when it's not broken and you still wonder why it's not working, you do about 500 trial and errors to get back at a place where you were once enjoying success. Did you know it took Edison about 900 tries to invent the light bulb? Actually, when somebody asked Thomas Edison why it took him 900 tries to invent the light bulb, he replied; I just found 900 ways it didn't work! Brilliant optimism don't you think?
Which brings me to people who do business on the internet and why they keep circling the wagons to find a hitch? You see, there's only 2 ways to make money on the internet, actually 3 if you live in a trailer park, but let's focus on two for now; you need to provide a service or sell a product. Period! When you have a service, you can either sell your service and ask for a fee; or give it out for free and hope for some reason it's popular and it attracts thousands of eyeballs. If you're selling a product like golf balls, then you don't need advertising money, just a good marketing strategy on and off line.
If you're product is information and you're giving it out for free, you better make sure it's popular, that's why vice content is the big money maker, things like Gambling and Porn, as it's one of the main things we do in our "social" time, and listing to music. However, the music angle is a tougher nut to crack, thanks to the guys at Napster for spearheading that headache for the music industry.
Nevertheless, my theory on doing business on the internet is Google has screwed up the whole internet, because if we want something, what do we do? Say it with me; "we Google it!" What do you do when you have a sore stomach? Go to google and type in symptoms for "sore stomach" or if you need help with a resume, you type in "resume examples". You see, why would people pay for anything when google gives everything out for free? I'm not a psychologist and I'm not related to Frasier Crane, but I do understand behavioral patterns, sort of; as I've got an addictive personality and when I do something, I tend to do it to extreme and do it well too!
I love reading articles on "social networking" sites when people talk about monetizing from their audience on such sites as "facebook" and "myspace". Give me a freaking break! I ask people all the time, when you go to facebook or myspace, when was the last time you clicked on a banner or bought something? Like never right? In fact, don't restrict that thinking to just social networking sites, when was the last time you went to ESPN, USA Today or your local newspaper site online and clicked on a banner? I would guesstimate 80% of people who go to social networking sites don't buy anything online. This is an "on-demand" world we live in and the only time you will buy something is when something breaks or leaks like a tire! Plus, keep in mind; we have more distractions and options in our lives now, things like 1500 specialty channels on cable and satellite radio, things that have "subscriptions" fees attached to them. Plus, you will see a day where it will cost you to watch any games on TV. Want to watch that Football game on Sunday, order it! This is fine with me, because I'm a sports junkie who chooses to have this as my main distraction in life.
Which brings me back to Google, we've develop a behavioral pattern online not to pay for anything, because you will find a way to get it for free off google anyway, or from a site you find on google. In fact, Google is finding out they've created their own 3-headed monster and are seeing their stock price go from a high of $747.24 a share to today's price of $465.25. Plus, just pick up a paper, they are worried that people will no longer buy "ad words" and that's because the people who were buying all the "ad words" where people trying to keep their own sites going and getting some of that saturated traffic. Plus, I have two other theories in life, your whole world changes every 7 years and the law of average always evens out in the end. Just look at your circle of friends? How many are still in your circle after 7 years? Those who stuck around are true friends, the rest were just acquaintances.
As for doing business on the internet, it took a few years, but people are finally realizing it's tougher to get a return on your investment these days and 80% of the advertising you spend online now, you might as well kiss that ad money good-bye, because you ain't getting that ROI back! How many times have you spent money on advertising in the last 2 years and got your money back? Advertising barely works, it's only good to keep your name in the game.
Granted, the world is a different place today and the fear of recession is on everybody's mind, but big companies are holding back the purse strings and if you don't have a site that draws over 2000 unique visitors a day, you might as well start looking for a new venture in life, because today's internet world is all about getting things for free and breaking even.
Where do I think we are going? Since the caveman years, governments have always relied on vices to ease the financial pains and that's why cigarettes and booze played a huge role in the 60's to today. However, now that the masses have realized google is their friend, they are realizing smoking cigarettes is an ugly way to die and it's slowly being phased out of people lives. However, what are we going to replace that sin tax with? You know what they say about addictions right, you always replace one addiction with another one! Say hello to online gambling friends?
Therefore, I feel online gaming will be the next big industrial boom "online" within the next 5 years, as evolution is taking more time than predicted. Plus, now that the industry has over 12 years of experience from the brick and mortar operations who were test driving the software and technology of the future and I'm sure they've worked out every software bug or have seen every types of schemes thieves will try to steal from the private and public companies of the future.
As for today's world on making money on the net, I believe internet advertising will only be beneficial for sites that draw over 5000+ unique visitors a day and they must be dabbling in some form of vice or music industry, as social networking sites are a recipe for a financial disaster. People will never pay to keep their profile in a space and they will just head to the next site who wants to pick up the tab or they will google one. Plus, there will always be somebody who will come along and build a new site and says "but this one will be different" and they'll be gone in 7 years too!
If you're in the online business and you don't have thousands of eyeballs on your site or a product that is "on-demand", then you're better off keeping your site as a "hobby" site, because the elite industrialist of this world will be very diligent on where they place their money and expect a return a return on their investments. Keep in mind, 90% of everything we need on the internet has been invented, what can you bring to the table that will make decision makers change their mind and advertise or buy from you?
Please excuse me, while I google "how to fix a tire leak?"
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