on Feb 20, 2007
I remember a long time ago – back when computers were made from clanking iron gears and most web browsers were steam-powered – in the run-up to the dot-com boom people were marveling at the idea that you could put ads on your website and make money when visitors to your site clicked on those ads using their crudely-made wooden mice.
At the time, people were scoffing at 10¢ click-through rates as a joke. Why, nobody can pay that much for a single visitor if they want to make money! I think it was true at the time, but things are much cheaper now. Bandwidth is cheaper. Getting some server space is cheaper. The software to run an online business is pretty much well-established and easily understood, so you don’t have to hire your own programmers to write custom software. Places like Google make setting up an ad campaign much simpler. Billing is more easily automated and shopping cart software is more or less free. (Every provider I’ve dealt with in the last few years has offered a shopping-cart solution in with their webhosting service, even with their $6/mo cheapo packages.) It really is a whole new game now. All of this is about six years too late – and in any case it wouldn’t have prevented the dot-com bust any more than opening an umbrella shop in New Orleans would have prevented hurricane Katrina – but it is nice to see these tools brought together, streamlined, and put into the hands of small businesses on the web.
Now, I’m not running an online business here, so these tools are of no direct use to me. What is of use is that they help companies who are trying to sell stuff online, which in turn has lowered their overhead, which has increased their advertising budget, which helped those of us who toss some ads onto our site. Not only is 10¢ per click-through perfectly reasonable, but now rates go even higher. (I average a little over 10¢ for text ads, but I assume Google is keeping a few cents for themselves.)
All of this confirms my belief that the dot-com boom wasn’t all vapors and dreams. There were real, honest-to-goodness opportunities out there, but they were buried under an avalanche of foolishness, buzzwords, and wishful thinking. Yes, your idea that you can make money by publishing interesting content and then living off of ad revenues was sound: The notion that you could support a staff of 100 people and make a billion dollars a year wasn’t. The dot-com boom was its own worst enemy. I think everyone would have been more successful if they had about a tenth of the money and a hundredth of their original ambitions.
(I have my own dot-com stories to tell someday. My company survived, although I didn’t like what happened to us during the boom and I really didn’t like what happened during the bust. Maybe I’ll put those stories up someday, although not just yet. I’m still at the same company and I don’t want to open old wounds. In fact, I think most of this post is an attempt to write about it without writing about it.)
But it is really encouraging to see some of those early promises paying off. The original dot-com model: Launch a corporate empire, then make a product, is absurd on its face. But now I see lots of smaller companies with similar – but more realistic – ideas surfacing. A lot of them show up as ads on this site. (Like Zwinkies, and a few others that I can’t think of and aren’t popping up as I write this.) And even those sites, by doing their thing, create a little bit of ad revenue for little hobby sites like mine. (Maybe mine is a bad example, as my bandwidth is leeched from mu.nu and if wasn’t for that I’d be losing money. Still, I think the point stands that some people can make money with hobby sites like this one.)
It turns out the dream was true, but only on a micro scale.