Everybody wants to make money on the internet!

How many of you are old enough to remember the dot.com crash in 2000? How many of you recall companies closing down one by one, with IT engineers, application programmers, systems programmers all retrenched? How many of you remember everyone wanted to "tok kong" (dot.com) his business?

Making money on the internet is not easy
If you read any business book about the excesses of the dot.com era, you will realise that easy money is not that easy. For every one success in the dot.com world such as Amazon (yes they still exist and are actually profitable selling books, toys, even groceries online!), there are many instances of companies that go into Chapter 11 or bankruptcy.

What does it take to make money on the internet? What are the actual business models that work and those that do not? How do you know if the "investment opportunity" or "high yield investment program" in front of you is a scam or not?

Ways to make (and lose!) money on the internet
Welcome to the real world making money on the internet. There are many ways, both legitimate and illegitimate to make money and for that matter, lose money via the internet. If you read any internet marketing book sold by a "guru" or attend an expensive course on internet marketing, you will realise that there are fundamentally a few business models to make money on the internet.

1. Sell your product or a service
This is a no-brainer. The internet or world-wide-web has vastly reduced the costs of doing business on the internet. Previously, most business was done largely within a geographic area, especially if you bought and sold goods. Only large organisations that specialises in import/exports typically engaged in global commerce as the economies of scale were large enough for them to defray the costs of transportation.

The introduction of the internet and the ability for the individual to get online via his broadband (or even 56kps dial-up) connection now allows us opportunity to sells services/intellectual property over the internet at very low transport costs. This has spawned multitudes of websites selling you e-books and get-rich-schemes for as low as USD 29.95! Many of these schemes are scams because the easy availability of information means that most knowledge is available via public domain or creative commons resources such as Wikipedia, personal blogs, groups, forums etc. All this information as well as misinformation is available for the cost of your monthly broadband subscription plus a little investment in a computer.

If you are thinking of selling something on the internet, start by selling stuff you already have e.g. using online auctions such as eBay or Yahoo! to get rid of stuff that you still own but hardly use. If you are already operating a bricks and mortar store or business, considering using the internet as a marketing and ordering channel for your distributors and customers!

2. Sell someone else's product or a service
This is where the market for affiliate marketing comes in. Basically, the internet is the new place for advertisers to place advertisements everywhere. So now the cost to advertisers are very low, i.e. virtually anyone can be an affiliate but only if you refer successfully your user to the principal's website or if he makes a transaction, then you get a commission. There are many affiliate programs around e.g. Commission Junction, AuctionAds, TextLink Ads etc. This is one of the means for full-time internet marketers to conduct their business activities.

3. Run a blog and website and get paid for advertising clicks
The way for small websites or bloggers to earn some pocket money is by monetising their virtual real estate. AdSense is one such program that pays you each time a visitor to your website clicks on ads relevant to them. How it works it that Google AdSense is able to intelligently understand what is the topic of your website through keywords and they will send relevant advertisements to your target audience. Each time someone who visits your website clicks on an advertisement, you make some money. In order to monetise your website, you need to have traffic. Before you can have traffic, your blog/website needs to have content, i.e. why would visitors want to visit your website or blog if there is nothing in it for them?

AdSense is something I am trying and it is not easy. You have to rack your brains to think up of good content and to visit social networking sites such as forums to attract traffic to your blog. In addition, search engine optimisation techniques such as keywords will only get you so far. It is a challenge to be able to produce consistent results. But this is a avenue for those who are able to build portals or communities where people gather and result in high traffic.

Many paths lead to Rome
Many roads take us along the path towards the goal of making money on the internet. Some paths are long, arduous but ultimately rewarding. Other paths may be relatively quick, fast but eventually draining. Whichever path you choose, remember this. Money is not everything. ;-)