revenue sources Archive

When people ask me to describe FriendFeed, I usually begin by noting, “FriendFeed is a social bulletin board service”. At the most basic level, FriendFeed is a forum. The only difference is that instead of users starting threads, they typically suck in threads from other social services like Twitter, Flickr, YouTube, etc.

There are a variety of popular forum tools including vBulletin and phpBB. I’ve been using vBulletin on the HTMLCenter web development forums for nearly a decade. vBulletin isn’t free; a license costs $180 for life plus $60/year for product upgrades and updates. The software is very powerful, administrative panel is easy to use and the email support is always very responsive. There’s only one real issue with the software – it hasn’t moved into 2009. The software still looks and acts as it did 1,2,3, 5 years ago. You can always tell when a forum is using vBulletin without even looking at the footer. They continue to add improvements and bug fixes which is great but it’s time to update the look and the usability to today’s standard. The same can be said for phpBB and most of the other forum software packages.

This is where FriendFeed comes in. They have an awesome opportunity to take over the forum world. While forum software isn’t as sexy as creating a Twitter app, there is a real market opportunity which could be there for the taking.

Naturally FriendFeed would need to create a self-hosted version of their tool and modify it to allow for better “forum-like” thread creation. FriendFeed forum owners could also opt to allow their content to be indexed into Friendfeed’s new search engine. Take a moment to think about how much more “real-time” data would be included in the FriendFeed search if thousands of popular forums were included/indexed.

The FriendFeed forum service would also allow for better integration with Twitter, naturally Friendfeed and all of the other services FriendFeed will push to in the future. What this means is that forum owners would have new ways to get traffic to their forums.

In addition, there are loads of developers who build apps for vBulletin and my guess is that they might switch to building apps for the Friendfeed forum service. It could be a way to get developers excited about FriendFeed.

I know I would switch my forums over to this new offering and would pay the same price I do to vBulletin. Create a tie into WordPress and it could became an even sweeter offering.

Not only are most of the hottest Web 2.0 startups unprofitable, quite a few lack viable revenue models altogether. This has led cynics like me to criticize these startups quite harshly over the past several years.

Twitter, for instance, is the perfect example of the prototypical Web 2.0 startup that has captured the hearts and minds of the Web 2.0 "community" but hasn’t captured any real money (outside of venture capital).

When confronted with questions about the financial viability of their hottest startups, Web 2.0 proponents usually have a similar response: Rome wasn’t built in a day. When Google launched, we’re reminded, it didn’t know how exactly how it was going to make money. For young Web 2.0 startups that are growing rapidly, we’re often told that growth and "critical mass" are more important than revenue models and profitability.

As we recently learned that Digg was still losing money on revenue numbers that look quite paltry, it occurred to me that Digg and some of Web 2.0′s other hot young startups really aren’t hot young startups anymore.

Continue reading “Web 2.0, Revenue Models and Profitability: A Web 1.0 Comparison” »

Xing has provided us with their latest user and revenue numbers this morning. As of January 2008, they have 5 million registered users. I’d love to see them share their active users as I have an account but haven’t logged into it in nearly four months.

Xing is Europe’s version of LinkedIn though they are starting to gain some acceptance here in the States as well. Over the year Xing launched a marketplace and acquired Neurona.

They have also released revenue numbers for 2007 that are on target with their guidance. Company revenues for the year ended at €19.61M (~$29M) and EBITDA at €6.89M (~$10.1M). This is double the numbers for 2006 and represents a EBITDA margin of 35.2%. 

Xing was one of our Top 10 social services in Germany.

I am always looking for ways to increase the income that is generated from my Web sites. I have used a variety of affiliate programs over the years including Commission Junction and Amazon. Amazon has always worked best for my sites but the income has dropped from the late 90s. When Patrick Gavin from TextLinkAds fame launched AuctionAds earlier this year, I didn't think such a program would work well on my sites. I don't know many techies who really use eBay a lot so I left the program behind. Then I gave it a try and here are my results.

First a brief overview about AuctionAds (AA). The program is very simple. Basically you are using AA to become an eBay affiliate. You signup and then create units in the same style as Google Adsense. You can also link to any page on eBay which makes the system even more powerful. There are many options for creating the ad units and there is no limit on how many you can place on a page. Quoting from the FAQ on revenue generation, "When your site's visitors click on an Auction Ad listing and take an action on eBay you earn cash. Actions are defined as a Winning Bid, a Buy-it-Now or a confirmed user registration." What's great about Auction Ads is that you can also generate revenue on affiliates as well. If someone clicks the "Ads by AuctionAds" link below the ad and registers, I earn 2% of all revenue generated by that user for the first 6 months. Pretty spiffy indeed!

Here is an example ad:

To create this ad, I used the term iPhone and selected a standard 468 sized ad. Total time to create/post was less than 30 seconds.

Results

Here are my results for June, my first full month using Auction Ads. And it is important to note that the ad was placed on ONE page only. I used the iPhone cost page as my test for this program. So the revenue earned in June came from this one ad on this one page plus any affiliates I sent (which is not reported currently).

Total revenue earned: $35.35 with a 1.91% clickthru rate. Pretty impressive. Frankly I was shocked to see such a high amount and inquired if it was correct! I received confirmation and did a big Yahoo! While I know that pushing the program out to more pages might not provide the same benefits overall, I am certainly excited at the potential. $35 might not seem like a lot but when you think about the fact that it was generated on one page with one ad unit, it certainly looks rich to me. I know I did not generate $35 from the other ad programs I used during the month on this page. 

Summary

I am excited about the potential of testing AuctionAds on more pages, especially on my web development site HTMLCenter. I will report back in several months with an update on earnings to confirm how the program is working over a longer time period. If you are looking for a potential new revenue stream for your blog or Web site, AuctionAds might be worth a try.

Note: This review was not paid in any regard, however for proper disclosure, if you click the "Ads by AuctionAds" link in the ad above, I will receive a commission on any transactions made through your use of AuctionAds. That said, feel free to click the direct AuctionAds link if you are not interested in the affiliate deal.

Performancing is receiving loads of buzz these days. Everyone in the blogosphere is talking about the launch of their Partners product and how it (could) offer another stream of revenue for your blog. So, me being Columbo-like wanted to find out more. I chatted with Nick Wilson, one of the co-founders of Performancing about what’s going on over there and what’s next. Nick was generous enough to participate in an interview with me and below is a transcript of our discussion.

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Allen: Can you provide a brief bio?
Nick: Nick Wilson is one of the co-founders of Performancing.com, the worlds largest organization of professional bloggers. Since early 2000 Nick has been involved in online publishing and community building in one way or another, with the last 3yrs being spent almost entirely focused on the difficult but rewarding task of building communities.

When not online, Nick likes to walk his dogs, and spend time with his daughter Robyn and wife Ivana in the Danish countryside.

Allen: What does Performancing do?
Nick: Performancing runs an advertising network for bloggers that we’ve just launched called Performancing Partners, we produce the #1 blog editor as an Firefox extension: Performancing Firefox as well as running a busy community of professional bloggers (25,000 or so) from the Performancing.com site.

Allen: What does the Performancing team look like? Where are you based?
Nick: We’re all gorgeous. Chris is in Barnsley in the north of England, Patrick is in Idaho, and I’m in Denmark.

Allen: Since you are all based in different geographic locations – do you find that hinders innovation since you are not all in the same office?
Nick: Quite the opposite actually. Because we’re all so far apart, we don’t have the time to mess around or chit chat about crap – we work, and we work hard. We use IM and email to communicate and for the most part we allow each other to get on with whatever needs doing, which means we probably get more work done than many web development teams.

We rarely have meetings, and we absolutely never have to make sure anyone is doing what they’re supposed to. We all have our areas and we all work tirelessly (well almost..) on them.

Allen: What is the Partners option all about?
Nick: Partners is a new type of blog ad network. It’s free to join, you don’t need an invitation or know the secret handshake, you just paste a small bit of code into your blogs template and within a day or so you’re blog is given a price, and is open to advertisers.

The idea behind Performancing Partners was to build something with community in mind, and to help bridge the traditional gap between publisher and advertiser by bringing them together within the system and enabling interaction and cooperation.

It’s early days yet, but so far we’re really pleased with how it’s working out.

Allen: How has the feedback been since your Partners launch? Any stats you can share?
Nick: Feedback has been overwhelmingly positive. People understand we’re a young company in beta and are giving us a lot of room to get things right and are actively helping us improve the system every day.

Allen: How do you compare Partners to Text Link Ads and Google Adsense?
Nick: I don’t.

Allen: What can a blogger expect to make from Partners?
Nick: That depends almost entirely on the blog, and their choice of settings. But advertisers are starting to buy ads on niche blogs and things so far are going according to plan.

Allen: How do you determine if someone is a blogger vs. a regular community type site?
Nick: We have a look at it.

Allen: Where is Performancing going in the next 1-2 years?
Nick: World domination, via the pub.

Allen: Where is the blog going in the next 1-2 years?
Nick: I think we’ll see blogging continue to grow, but also for the subset of commercial bloggers we’ll see an increase in skillsets, tools and a focus on quality niche content become a mantra for making money from blogging.

Allen: Which web apps do you use on a regular basis?
Nick: Tadalists. Mostly i find “web apps” to be an unproductive temporary diversion – fun though.

Allen: What do you think are the most important characteristics that are needed for a startup to be successful?
Nick: Big balls.

Allen: What would you say is the top thing you have learned since you started Performancing? positive or negative?
Nick: Hire your friends, or people your friends will vouch for. Everyone else will just waste your time.

Thanks for participating Nick and thanks to you for reading. I will be reporting back on the progress of Performancing. I think they will have enough publishers to be successful, the key will be whether they can get the advertisers to fill those ad slots.

If you would like to participate in a conversation on CenterNetworks, or if you have any comments or questions, let me know.