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The Almighty Buck

What it takes to be a profitable Internet company 97

Zebulun writes "The Red Herring has a really good article that basically examines what it takes to have a profitable internet company and why so few make it. " I think investors are expecting this more and more-the next few years will see some shake outs, something which has already begun to happen. The question is, who will be left standing?
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What it takes to be a profitable Internet company

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  • Exactly - it shouldn't be hard to see that one competent UNIX admin costs less that 5 MCSEs.
  • IIRC, about half of the new noise came from AOLers who didn't know better, and the other half was people complaining about the AOLers increasing noise. Sure, the AOLer's were often dumb. And they definitely increased the noise on UseNet. But the people flaming them for doing that increased the noise just as much, while inciting more nonsense -- and they are the ones who should have known better.

    See a metaphor here? I see just as many posts on /. uselessly declaring that "the quality of posts is decreasing" posts as I do so-called "low-quality" posts.

    The inevitable occasional uninformed/childish posts will always be there, since this is a public forum.. so what I'd like to see is those posts followed by complete silence -- to keep from encouraging them -- or responded to by a knowledgeable person providing useful information (denewbiefication) without calling anyone names. Complaining about the noise is just part of increasing it, my friend.
  • Sorry, but I have to take issue with two of your points here.

    1) Don't dare try to install NT with more than 3 logical drives. It will only let you use 1GB of the primary drive.

    Care to explain, then, the NT box I have on my desk? It has a 6 GB C: drive / partition formatted NTFS. Yup, one piece. It's an EIDE drive in a removable case. Then, there are 3 more EIDE units before I get to the 2 IBM SCSI units. That doesn't even count my CD and CDR, and then there's the SyJet... That's nine physical units, with the potential for many more logical drives. I have the full capacity available on all my drives, and I've never had a problem.

    2) Don't ever start up NT with one of your external RAID arrays unattatched. It will basically list the drives as offline, and won't let you do shit about it until you recreate the RAID container. And for the RAID unwashed out there, that means you gotta wipe the drives.

    You're right, this can be a pain. It is possible to recover from it. With Disk Administrator, (under the Start / Programs / Administrative Tools (Common) menu), select all the drives that are affected. Select "Configuration > Restore". NT will now ask you for the disk that has your config on it. You do have a backup of your RAID config, right? Wait for it to finish grinding on the floppy, then NT will ask you to -- you got it! -- reboot.

    If the server is a new install, you'll probably have to go in and replace all the permissions on the files in the array. If you don't, you'll most likely get a "Device not ready, RETRY / CANCEL" message box. This can be rather confusing... it's the same message you get when you try to access the floppy or CD drive and there's no media in it...

    I'll agree with what you said about weird problems. It can take way too long to establish exactly what's causing NT to puke. Been there, done that, and all I got was this lousy t-shirt... and a head-start (pun intended) on grey hair.

  • oh calm down - selling out _is_ the best internet business model...thats no dis to Taco..
  • and how exactly does this differ from current internet businesses?
  • yeah i have to agree....i liked /. better when it wasnt so popular (and i was an AC). unfortunately there seems to be an influx of idiots.
  • A few points to make: One of the first things to remember when making claims such as this is "propogation of effects." While a choice may appear to be the more financially beneficial one at first, the effects of that choice may very well end up costing you lots and lots of money -- and that's definitely not a good thing (I think we can all agree on that.)

    For example,

    Don't use Oracle...

    Okay, so it may initally cost effective not to use Oracle because the help is more expensive and the license costs an arm and a leg, but you have to think about what happens when you launch your website. IMHO, Oracle running on a Sun or similar *NIX box is inherently more stable and will provide better performance than MS SQL on an NT box. If my website is /.'ed the first day it goes live, survives the onslaught (where MS SQL would choke and die,) I think that extra $$$ is well worth it. I think the shareholders would agree as well.

    Don't use Unix (any flavor)...

    Again - think about it. IMHO, a Unix-based box will crash less and handle a higher load than a similarly equipped MS SQL box (sure -- if you give MS SQL twenty clustered 4-way Xeon boxes it can handle a high load, but there goes your next years' profit out the window when you need to buy a room at Exodus and hire 5 full-time admins to keep it alive - by clicking checkboxes, of course)

    Don't support Linux (yet)....

    I'm not going to touch this with a 20-foot pole....:)

    In the end, the cost of your consultants and the initial fixed cost of the software/hardware itself can nicely be offset by the amount of money you'll save in the future by having a fast, stable website that doesn't crash and makes the users happy. And what does that get you (assuming you have an idea that doesn't suck?) -- $$$.

  • okay its _really_ ridiculous to moderate this comment down.
    p.s. the reason porn companies arent public yet is that the regulatory environment is up in the air. the moment the gov't defines the rules for online porn will be the moment seth warshevsky (sp?) is the next dot com billionaire.
  • to quote mutual fund investors "past performance is no guarantee of future results." that said, "platform" companies like Yahoo or Cisco probably will enjoy incredible performance in the future...
  • Caught me. My Pierre Sallinger filter was down at the time.
  • Yes, but you need a big server if you're going to get a few hits a day... more to the point, you're into mod_perl and mod_ssl instead of perl and apache-ssl, for starters, and probably some fine-tuning for performance.
    ...And some people to look after it all.
    Alternatively you could "out-source" some of the processing requirement by doing JDBC from client browsers.

    I'm sure there's still something more to it though.
    Oh yes, *cookies*! Got it, now :8]


    ~Tim
    --
  • No industry, the auto industry or any other industry has ever made a profit. Individuals and companies, yes. The whole point of this so called profitability is cash flow and you're dip into it. The overall cost of business, from environment to bad investments, it's relationship to Incorporation aka CorpGovLLC is totally constructed to enslave workers, siphon off as much money you can pocket to yourself and your gang (stockholders), which help you control your portion of the street. All while the real cost of oil spills, S&L bailouts and tobacco lawyering deals is for the profit of the barons. CorpGovLLC is "private profit, public risk". We, the public, built the highway system GM uses to drive it's business. Right here at home, the Internet was built with public funds, now CorpGovLLC thinks it's time for you to hand it over. All highways are built, not so we can get to town meeting halls, rather, town shopping malls. Try it any other way and you'll find military check points on your FREEway. Go out, stay in, whatever! Just buy something dagnabit!
  • Let's face there's not a lot on the internet that anyone will pay good money for.

    Who clicks on banners?

    E-Commerce: Where's the advance on a good catalog/mail ordering service apart from industries such as books and music where there is such a huge range. When I buy a car, I want a test drive..

    I think the internet needs a 'killer' app but if knew what it was, I wouldn't be sitting here sending this E-mail.`

  • Something like less than 5% of all companies survive their first 5 years. Most just plain fail. Internet companies just fail more publicly, with a few million spectators, instead of a few thousand.

    A winning company has to have a product or service that enough people want, and management that knows how to keep up with the demand.
  • Provided moderation is doing its job, useless
    off-topic threads will be down-moderated.
    Experienced (and tired) /.-ers will set their
    thresholds higher, and the noise will decrease
    in their eyes. Newbies are left with a free-for-all
    high-noise forum until they learn to raise
    thresholds and order by score -- thus a true
    newbie won't find much useful here until he
    learns (& desires) to filter out the junk.

    The only problem I see, though, is that with
    increased volume more moderator points have to
    be spent filtering off-topic posts and trolls,
    meaning that fewer are left to award to the
    good posts. Every time I've moderated I have
    always felt more like rewarding the good than
    filtering the bad (due to the limit of 5 points)
    and so a "0" or "1" point crap post stays that
    way.

    I have a feeling the moderators need more points
    (or there need to be more moderators) --
    perhaps based upon the comment volume / day.

    CmdrTaco - are you listening?

  • I would think something like this would only fly
    in a very technical savvy location. I work for an
    ISP in Dayton, Ohio and know how low the number
    of technical users are. Now, admittedly, they are
    alot more invisible than the problem cases (and
    there are plenty of those [dumb users]), but the
    number of them Could Not keep the isp afloat even if it were only one person maintaining the hardware. Silicon valley? Dunno, ask me when I live there, but in the midwest... Naaaaah.

    ///jeff
  • My company runs on the internet, and I'll tell you.... in this past 3 months, i made a whopping $37.20! so dont go saying internet businesses dont do good! ::cries::

    #----------------------------
    $mrp=~s/mrp/elite god/g;
  • My comment is offtopic. The above comment is as on-topic as one could be. I think this is possibly the worst moderation I have ever seen.
  • I visited your web site, and it looks like all your products are free - so how did you make $37.20?

    Maybe you need to make products for Linux? My impression is that the Windows market for what you're producing is pretty much saturated, thus the low revenues. Unfortunately, Linuxoids want it all for free.

    You might want to consider BeOS - there aren't that many people buying it, true, but those who do are comfortable with paying for software.

    D

    ----
  • No one vendor--even MS--will make you profitable. I'll make some suggestions, but first an obeservation:

    Let's see, just how profitable is Microsoft's portal business? Hint: it isn't. Compare them with Yahoo!, which is profitable (and has been for some time). Guess which one uses Unix? (FreeBSD, to be exact.) Guess which one is located in the SF Bay Area?

    Here's my list:

    1. Run lean. Hire self-managing people of proven experience who add directly to your product. If you need to, hire a few managers to make sure these people received what they need in terms of resources and coordination. Don't "bulk up" management until you absolutely have to. Leanness reduces friction, and means you can respond more quickly to opportunities--or problems.
    2. Listen to your customers. They will be a major source of your ideas, and the first to tell you if you're doing something wrong. Respond to them and personalize service, if you can. One reason there is so little brand loyalty is that customer service on the Internet is almost uniformly terrible. But even a fickle customer can give you a really good idea in the brief time they are around. The Internet makes it easier to listen; use this an an edge.
    3. Plan ahead. Establish goals, but don't be afraid to change them as your business and its environment change. Revisit your progress frequently as you go along. "How am I doing today?" "Where will this take me six months from now? A year?" Things like investments or an IPO are steps along the road, things that enable you to reach goals. But focusing exclusively or even primarily on them is a sure way to screw up your business.
    4. Manage risks. Establish contigency plans for when things fail. If you find yourself spending more than a little time in reactive mode (responding to problems as they appear and dealing with their aftermath) you aren't spending enough effort on mapping out the areas of greatest risk to your business and acting preemptively.

    Failing in any one of these areas--hiring, customer relations, planning, risk management--can doom you no matter how good your marketing plan is. Yet the overwhelming number of Internet startups I've seen have come up short in one of these areas--and more than a few are already gone.

    -Ed
  • Hire people who will post slanderous messages about your client's competitors, or positive messages about your clients on /. and similar places. Don't keep any personal records on them, or what jobs you assigned to them, to prevent them from being sued. Many companies will rush to pay for your services, esp. that Redmond-based firm with the inflated stock value, which seems to be spending a lot of money for that kind of activities at the moment.

    "NT for successful businesses" my a**, last time I saw NT running in a company, it was used for a Mail/Web/DNS/Proxy-Server - every time the proxy server crashed (several times every day), it took down all other services with it...

  • What an odd post. If it weren't for the San Francisco point I'd think it a simple troll. Anyway...

    Don't use Oracle - the "certified" Oracle people are more than twice as expensive than the MS SQL people

    There are plenty of non-Oracle, non-MS database managers. There are lots of cheaper RDBMSs than Oracle too. Most people don't need the sort of scalability SQL Server provides, let alone Oracle.

    [This stuff gets almost on-topic by the bottom, you know. No, really.]

    I mean think about how easy one could screw up a good Unix setup vs screwing up a good NT setup. Editing .config and .rc files vs clicking checkboxes.

    ROTFL. Having a GUI interface to configuration settings does not magically make the configuration settings easy to choose. A single clicked checkbox out of place could nadger the system just as easily as a line wrong in a .rc file. And a really knackered NT system means you have to reinstall the whole OS and all your apps all over again. I can cause this situation just be installing and de-installing parts of NT Option Pack - great eh?

    Try, GUI interfaces could provide a nice, friendly, safe-ish interface to configuration. But Microsoft don't use them like that. They use them to hide your settings away in the registry and metabase, rather than have them available in a textfile. So if you want to get the settings out and move to another platform - or just keep your settings over yet another OS reinstall - you are screwed. You are locked in not only to MS software, but one MS box too.

    [Don't believe me? I can get this on topic by the end. Betcha.]

    Don't use Unix (any flavor) Use NT. I don't meaan to sound like a Microsoft-lover

    Really. Odd, then, that you choose to list all the major systems that aren't by Microsoft and manage to systemically diss them without justification. I mean what's this all about:

    Real Player puts seven icons, links, and shortcuts on your computer when you install it. - Is this really necessary? This is how they prove that they are anti-Microsoft? WHY are they so antimicrosoft?

    Obviously this makes no sense (how does having icons make one anti-MS?) but you also forgot to tie it into the theme for today, namely What it takes to be a profitable company on the internet.

    And the answer, of course, is this:

    Get yourself bought out by Microsoft.

    Or any other big internet company. AOL is good. But Microsoft is still best.

    You can't really make much of a profit on a purely internet business at this point in time. But if you create an innovative new bit of kit you can get Microsoft or one of Microsoft's enemies to buy it to use in their little fight. Then cash in your MS shares and take a nice holiday.

    That is all.

    [Once again, I win. Give me yoghurt!!]

  • To clarify the first item...at the TIME OF INSTALL, if you have more than 2 (yes I know i said 3, it was a typo) logical drives, NT will only allow you to use 1gb of the primary drive. I have seen this myself and have verified it with many others. Post-install it doesn't mind more drives, but it's damn annoying during install, especially since it doesn't tell you WHY you only get to use 1gb of that 9gb drive.
  • Actually one of my first interviews out of college in 1982 was at Fairchild (I think) in Santa Clara, CA. It was to work on a Pascal compiler, Pascal being only moribund, and not totally dead then. The guy I talked to was very proud of the fact that their compiler could eliminate a branch of an if statement when static analysis told them that the condition was true or false. He was using it the way we use ifdefs in C.

    Also, when I was on the Ada 95 Mapping Team, then Ada 9X, we talked about adding something like #if to Ada, but the language reviewers always shot it down. They believed that using static constants and if statements is always better. I never figured out why.
  • and NOT hit a portal or a search engine, so I must disagree. You may not have seen any of the internet advertising trade rags, but look at http://www.usatoday.com/life/cyber/tech/ctf519.htm for a good article on the subject.

    Unless you can spend the $$$ on an inside sales team to bring in the ad dollars another portal is a bad idea. Most internet users have become savvy enough to not use them OR already have their favorite and pass that information on to those friends/family who are newbies. If you look at how many portals have sprung up over the last year only to vanish or be abandoned, you'll see that it is a lot more than Database + CGI scripts = Money (and marketing). OK, so you market like crazy, bring in the eyeballs, but how do you keep them at the site and keep them /coming/ to the site? How do you get those who have been to the site to come back regularly? How do you know your audience?

    /. is a prime example of a site which could be/is a success.
    Marketing/bringing in new viewers: The best way in the world, word of mouth and links (i.e. FREE). I found this site from a link at Mac OS Rumors http://www.macosrumors.com , and I have hooked half the geeks here up with /., and now they are junkies who have passed the URL on to others.

    Keeping viewers coming back: Two words, ya'll, frequent updates. If you have a site and you only update once a month, unless it is a really really hot topic those people who have visited once or twice won't be back again.

    Know the audience: Well, look at this board and at the polls that are done, and look at the articles posted at /. . You can see that the vast majority of the viewers here are computer savvy, male, and based on a poll I recall seeing the majority are in the continental United States.

    Another way to make money on the web, keep it original and free. By original I don't mean something that no one else has done, I mean your own content. Sure there are sites that syndicate their content, but why should an advertiser pay you higher CPM's/CPC's for content that isn't yours? Why should a company or person pay for a sponsorship on a site that frames someone else's efforts?
    And I suggest free because if you are selling the info/files/images chances are someone is giving them away at another URL or in a news group.
    Of course after a while if there are a huge number of sites all offering the same services/content the value will go down, but those sites that make efforts to stand out will make the best buckage.

    Just my 2 bits :) Take with as many grains of salt as you like.





  • I have bought a few things from internet traders, and I`m very reluctant to do so again. Why? They expect me to sit in all day waiting for it to arrive! I`m sure it can`t be hard to say `It`ll arrive at about three-ish` and stick to it, thus enabling me to get to work in the morning. Better, I could specify when I want it to arrive, and they could arrange it so that it arrived within an hour of that time. Until they do this, then home delivery is an inconvenience rather than a convenience, and it`s far easier to buy things from the high street like everyone else.
  • I do not think you can put Yahoo and Cisco in the same boat.
    Yahoo is a pure internet company, Cisco is far from it.

    A company like Cisco, which supplies much of the backbone and the "means" of the Internet has a much more solid foothold. While Yahoo has name recognition, I would not bet that they will be around ten years from now (though it certainly is possible).

  • For every company that has established a name for itself on the Internet, there are hundreds more each week that are coming out with the same products or services. The barriers to entry are that low. Already we are seeing some Internet companies give service away for free, planning on relying completely on advertising. That is not a strong business plan in my opinion.

    Another problem with pure internet companies is that while there is some loyalty, a better price on exactly the same service or product is only a "click" away.

    While this is wonderful for consumers, it makes it very dificult for the companies.

    Personally, I believe that the companies that make it will be the late-comers. Portals will be owned by "established" companies (many, such as Infoseek and Altavista already are). AT&T and Microsoft will become the largest ISP's. Wall Mart, Toys R Us, Barnes & Nobles, etc... will become the largest goods providers on the Internet.
    These companies have the revenues and profits to support a losing game like the Internet.
    Venture Capitalists throwing money left and right to anything with a "dot com", and insanely high stock prices are not going to last forever. The profits have to be there.
  • I admit it: amazon.com have my loyalty. It's for one simple reason, a $20 order didn't arrive, and when I contacted them they upgraded the shipping (from about $4 to about $30) on the replacement item.

    Their service is good, their responce to missing items is excelent. Overall, unless there's a large difference in price, amazon.com are known good and trusted, by me.
  • And just for you sssslllllloooooowwwwwww people out there, that was sarcasm.
  • Has anyone ever heard of an ISP that doesnt include any services other than dial up. Most especially lacking tech support. My thought is that without the expense of admining multiple servers and paying tech support people service could be provided to the geek niche for a relatively low monthly rate. Add the option of colocating and it would be my ISP of choice. What do you think?
  • Try being a bit more subtle.
  • I'm sure profitability makes the business-owners and investors out there happy, but I can't say I care too much about it. No self-respecting hacker is going to seriously worry about turning a profit, right? And it's not my goal in life to be part of something along those lines, either. But making a living and keeping the ball rolling is of interest to everyone, I imagine.

    How does one go about taking a neat idea, an impulse, an epiphany and turning it into a project or company that can sustain itself, though? There ought to be a HOWTO out there on that!

    How to be an entrepeneur and not obsess about making big bucks...the two seem to go hand in hand these days. Bah!

    And yeah, I'm obivously too incoherent to be a successful (read: profitable) businessman ;-P
  • that guy would need to buy some big-ass pants if he had ass for nuts like you said. man, that would suck.
  • it's not "hores", it's "whores", with a "w". rolling in bux my ass, you can't even spell "whores".
  • Is it just me, or has the quality of the posted comments really gone down hill lately? I realize that I'm contributing to the problem by posting off topic, but the preschool-ish posts that have been appearing lately are beginning to severely irritate me. Does this bug anyone else, or am I just being overly sensitive?
  • I haven't release a new program in a long time, I've just been releasing 3/4 year old programs I found on old disks, and calling them "Discontinued Products". If you downloaded any of the programs you would maybe notice they were made in Visual Basic (yuck). I no longer even have that program (yay), I need to buy a C++ compile, I dont like mine. I'm currently programming a lot of Perl, but for personal uses. I made the $37 from sponsor banners.

    as for the BeOS comment, makes sense, in fact I was looking into purchasing BeOS a few days ago but I contacted my hard drive maker and they say chances are the boot manager BeOS has wont work with the EZ-BIOS overlay installed on my master drive, so looks like i'll just write in perl and go poor. heh

    #----------------------------
    $mrp=~s/mrp/elite god/g;
  • Both of you raise interesting points.

    I think that the reply to the crap is probably just as bad, and I'm definitely guilty, but I guess I was just trying to figure out so what the heck :-)

    As for the moderator points, they are already generated on a ratio to the number of comments, but the system is definitely starting to sag. I also try to accentuate the positive when I'm moderating, but today I just flat ran out of points, and there was definitely still some good stuff that needed +1's and some crap that needed -1's.

    In checking back now, that's still the case, but I'm still out of points. Ah well, its just a website, so I'm not stressing over it, but it seems to be a bummer at the moment - that's for sure.

  • Can you say flame-bait? I thought so!
  • that guy would need to buy some big-ass pants if he had ass for nuts like you said.

    I just can't stop reading this sentence. It is pure poetry.

    Thank you.
  • Organic seems to be doing OK.

    The Bay Area attracts smart people. I know many folks who turn down bigger pay in cheaper places, because those places are fooking *boring*. Interesting, stimulating places are brain magnets, high rents or no.

    If you have a good idea and need smart people to make it happen, you would be hard pressed to beat SF or Boston.

  • The bias is bad enough, but there's another reason why the current moderation will always be flawed: immediately giving inflated scores based on a user's recent history, but with a moving window used for averaging their scores. I've seen so many mediocre posts given scores of 2 lately that it's not even funny. (And no, I'm not talking about pro-Linux rah-rah crap getting moderated up, which is lame itself -- I'm just talking about your average run-of-the-mill posts that don't really have much to say)

    Once someone reaches the plateau that is necessary for them to receive an immediate 2 on any post, it's a pretty sure bet that they'll never drop back down again, which (1) gives a false importance to everything they say, and (2) helps insure that their average will remain high. So, you end up seeing all these mediocre (and quite a few with outright factual misinformation)posts with scores of 2, since unless they're being inflammatory or stepping on the wrong advocacy toes, nobody's going to bother to waste their moderation points knocking down a so-so post.

    Oh well, just thought I'd mention it. I don't really mind this post getting knocked down for being off-topic, since as someone who doesn't fawn over Linux, I don't have any plans to reach the 2-point posting plateau -- it would just be nice for when I'm trying to read other people's posts and would actually like to make use of the filtering here.

    Oh yeah, and so that this isn't taken as mere rabblerousing, here's the solution: Reset every user's score back to +1 once a week or so -- people who say something interesting will still get other posts marked up for a short period of time, but we'd get rid of a lot of the deadwood who are just bumped up because they happened to say three interesting things in a row back in 1998, but who aren't really pulling their weight anymore.

    Cheers,
    ZicoKnows@hotmail.com

  • Sounds like good advice to me. The main thing I would add is to watch your competition - even those who aren't directly competing with you now. Internet based organizations generally have a tough time building anything like barriers to entry for potential competitors. "Branding" is the primary strategy most web entrepreneurs rely on and branding is a high risk approach at the start.

    It may be B-school - but there's some worthwhile things even techies can draw from there.
  • Yep, it's been downhill since the scoring system came on-line.

    I have to disagree. I was about ready to give up until Rob put that system in. I've set my threshold to 2 and never see any of the "first post!" or "NT rulz" crap. The only reason I even saw it today was because I read a post talking about it that had been moderated up. I bumped down the threshold to see what all of the commotion was about. Well, back up to 2, I guess.
  • In the midst of this anti-hype, it's still important to keep in mind that short term profits aren't everything:
    Amazon.com, which has never turned a profit, is worth much more than a mom and pop store making a
    modest profit.


    Yes, but the stock price of Amazon.com has already realized that potential.

    If you buy Amazon.com right now, for a long term investment, you are betting that Amazon.com will be able to succesfully run Borders and Barnes & Nobles out of business.
    They need to, in order to justify their market capitalization at the moment.

    So yes, you are buying on potential... but in this case, it has already gone well beyond what would be even remotely sane growth estimates

    I can give the numbers to back this, if anyone wants to dispute me.

  • ARE YOU INSANE!!! Let me address each sentence here. "Looks to me like it takes using Microsoft products." - You MUST be blind! "The ease of use and administration is important with a small start-up company." - Agreed. Microsoft products though, are NOT easy to use or administer. Is a system that can't perform well and crashes consistently, easy to administer? In my business, that's called an administrative nightmare. Windows on Unix is JUST as easy to use. "Not to mention the cheaper hardware Microsoft products run on." - and you shouldn't have mentioned it because Unix runs on more hardware platforms than ANY other operating system including the hardware that Microsoft runs on (and much more efficiently too!). If you were just being sarcastic then never mind. I just don't think anyone should take that seriously.
  • (imho)

    The real problem is that internet startups lack a product or good content worth selling. It seems that a lot of new internet startups rely on one of two things: banner ads, or internet sales. It seems to me that there are an aweful lot of sites trying to be an all-in-one solution. We have ebay for auctions, but now Amazon and Barnesandnoble want a piece of that pie too. I'm ranting off topic. My point is this:

    For a business to make money on the internet, they have to have a unique idea, good content or product, and a well designed web site.

    -Z
  • I've ordered books from Amazon.com, Barnesandnoble.com, and Buy.com. Both Barnesandnoble.com and Amazon.com had great customer service. I will never buy anything from Buy.com again. I won't go into my sob tale, but they "lost" my order, shipped me the wrong (and damaged) books, and then my books didn't arrive for 30 days. Their customer service people said they couldn't help, then told me order status info that conflicted with what their website's order status told me. Many times their customer service reps were so busy, I was transfered to a voice mail. Unfortunately, the voice mail box was full and refused to take my name+number. be-otches..

    I now buy books and music exclusively from Barnesandnoble.com. I would use Amazon except I live in WA state, so I would have to pay sales tax. Also, Amazon just started selling short films online, competing with the startup company my girlfriend works for (AtomFilms.com [atomfilms.com]).
  • What if giving someone a -1 didn't count towards the point limit? That way, all the trolls would get moderated down while the good posts still get moderated up. Although, if some of the moderators disagreed on what is good or bad, then we'd have a whole new problem

    ---------------------------
  • agreed they have differnt businesses but yahoo's gonna be around, bet your botton dollar
  • What a bone-head! You've listed 6 ways that you're planning to spend this fantasy revenue of yours, but 0 ways to start "the most profitable internet company". How do you propose to "get" any of this b4 you "then get major venture capital"??? Why don't you go back to sitting in front of your "blue screen of death", find yourself a feel-good hole and keep fantasising about it?

    Oh, you already are.
  • From what I have noticed, the sites that seem to be the best and last the longest tend to be those that foster a community around one central subject - /. is news...for nerds, MP3.COM specializes in music for the MP3 masses, Amazon for books, Ebay for crap (ok, not all crap - I have bought a lot of good stuff through it).

    The point is, sites like these create a following - mainly by the interaction. They site may have the interaction built in (like /.), or it might be external to the site - but the really succesful ones have some way to chat/compare/argue oppinions with others built in. If /. just contained news, but didn't allow posting or moderation, do you think it would be as good as it is now?

    How to make money on such a site is the next step - you could probably get advertisers - just don't overburden the user of the site with banners. Slashdot has it perfect, a single banner at the top, nothing more (not too much of a problem except when it is slow loading). I sometimes even click on the banner if it is interesting enough (and the banners should be targeted to the users of the site). An alternative to make money is to actually sell something on the site - software, bumper stickers, t-shirts. Another way is to sell the site - ie, have a "free" side (AC posting only) but pay for the privilage of a login (this may or may not work for some sites).

    I am sure there are other ways - but the point is that the most popular sites are those that foster community.
  • In the final analysis, turning a profit means that you've performed a service that people are willing to pay over your costs for. Nothing more, nothing less.

    Of course if you just want to do something cool, first figure it out, then co-locate a server where there's plenty of bandwidth, and you can develop it for costs in the $ 200/month range. Once you get big enough to be noticed, you'll have higher bandwidth bills, but at that point banner ads should be able to pull in money.

    You don't really need a big company to do something useful. Check out my web site [ http://www.amazing.com ] - I have FAQs and information on subjects from cruising yachts to digital video, and people find all of it quite useful. All it costs to put up is my bandwidth bill. In fact, this was basically how Slashdot was started, although obviously Rob is much more successful at creating a system attractive to his market segment than I've been.

    Now, if you want to feed, clothe and house yourself, that's another matter. That requires a profitable company.

    Basically, what you need is a revenue model - where's the money going to come from? With amazon.com, it was sales of books. With eBay.com, it's auction fees, with recycler.com it's early access subscriptions and ads from auto dealers. Once you've figured that out and put together a realistic business plan, you have something worth looking at.

    Hope that helps. Hey, if you got a really good idea, I have bandwidth to spare at the moment.

    D

    ----
  • by Anonymous Coward
    Its odd that they failed to discuss comapnies like IEG, which are pure internet comapnies that are making barrels of cash.

    Even if you find it distasteful, there is no arguing with the numbers - online porn is a huge business with incredible growth potential.

  • There are several that already do this. There is one in Maryland, I think it is somehow associated with the University of Maryland, that charges $6 a month. No tech support or installation software.

    Based on just equipment and bandwidth costs, I figure that they need about 13 - 14 users per line just to break even. That does not include any rent, employees, etc. Considering that the norm for the industry is 10 users per line, and that is for large POPs, busy signals would be a major problem. I know one person who uses it and says that getting online between 6 and 11 PM is next to impossible.

  • Those are the people with -failed- internet startups. Not everyone is so stupid.

    I don't think that any experienced business person would buy what you just stated, either - no matter how net-newbie they were. 90% of internet startups fail because the people who start them are not-so-great-techies with no business experience and not enough money to get things off the ground --- they don't fail because they can't make money, but because they can't get capital to even start making money.


  • What is Amazon worth, REALLY? I mean, take away the overinflated stock, and what do you have? Some servers, some T-1 lines, and a warehouse full of books?

    Somewhere I once read a story told by an economist, where he offered a reporter a million dollars for their left arm. The reporter, or course, refused. But then the economist said: "Ah, but you see, now you're a millionare! You have something that's worh a million dollars!"

    The point here is this: Nothing is worth anything unless someone wants it. If no one want to BUY amazon stock at it's current price, and the price starts to fall (see: supply and demand chart), you're going to wind up with a company that's suddenly got to prove to it's share holders what it's REALLY worth. As in profit. And trust me, this whole market share/eyeball stuff is NOT going to last long when you've got an angry horde of stockholders outside your door wondering why their $100+ stock is sudenly worth about a share of Marvel Comics stock.
  • In many cases, at least if the buyers are smart, they include a non-compete clause in the contract. I have this feeling that a clause such as this was (if it wasn't it should have been) in the contract to sell Slashdot. Almost all purchases are this way. Also it is not unusual to see these types of clauses in contracts with employees who bring in a lot of business.

    I don't know if it is online, but Inc. Magazine ran a couple articles (main subject of that issue) about this time last year that mentions this, but it was more in relating to spouses starting businesses and protecting the business from a divorce. Rather interesting read if you are into this sorta thing.
  • What is Amazon worth, REALLY? I mean, take away the overinflated stock, and what do you have? Some servers, some T-1 lines, and a warehouse full of books?
    That's the $60,000 question (or whatever it is up to now). Does the name "Amazon.com" mean anything to the American public? I know that at least for me, there is no such thing as retail brand loyalty online. I buy wherever has the cheapest price, not the place that I know the best (of course, I have to have at least heard a little about them; I'm not going to buy from a no-name). But what about the rest of the country/world? Will they all equate Amazon.com with books for the rest of their lives? If so, Amazon has a lot more than a couple of T-1 lines. It all depends on how pervasive things like agents become (not real agents but the excuses for agents we have now). If people can find the cheapest place to buy a book just as fast as they can find the book on Amazon, they're going to do the former. But will they? I still have to laugh at all the loss-leaders the online merchants have. I'm not going to stay around!!! But they don't know that. Another thing possibly in Amazon's favor is their developing distributor relationships. If they can end up having a lower bottom line than anyone else, they WILL be around forever.
  • Database + CGI scripts = Money

    Yahoo, Alta Vista, eBay, google, etc. They're all just databases and CGI scripts.

    Okay, maybe marketing too.
  • Whoever you are. Non ACs here only wish the best for "Malda" OAWS Rob or CmdrTaco; and the rest of the /. crew, and RedHat, and those to come: VA Linux, Caldera, Corel, ... Live long and prosper. It's good to see $$ coming down on righteous people. May RMS find 10's of millions of $$ raining upon his head.

  • Jason Priestley? Why don't they put his picture on the padlock cover?
  • People with internet start up companies seem to be under the delusion that NO MATTER how horrible their product may be, that since its on the internet, it will make money. Thats the general idea people have gotten through the media and such. Well, its very very WRONG. What it does take is the same thing as a business not on the internet: genius ideas (or at least profitable ones) or a product people want. There is no way around that.

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  • Actually if you did the exact opposite of all these you would do pretty well. You obviously never took admin time into consideration.
  • This is a touch off-topic for the article, but all of the comments seem to be about the comments, and I think I just figured it out: College is back in session.

    Remember when AOL first went online? The chaos and idiocy that ensued?

    Perhaps that is what is happening here. I have a hard time believing this is a bunch of Microsoft shills, so I'm forced to hope the posting will simply get better in time.

    Either that or /. will go the way of newsgroups, with abysmal signal to noise...That would make me sad, so I'll keep hoping.

  • Ok, here's a nice list of reasons NT basically sucks, coming from the viewpoint of someone who has to admin several NT servers:

    1) Don't dare try to install NT with more than 3 logical drives. It will only let you use 1GB of the primary drive.

    2) Don't ever start up NT with one of your external RAID arrays unattatched. It will basically list the drives as offline, and won't let you do shit about it until you recreate the RAID container. And for the RAID unwashed out there, that means you gotta wipe the drives.

    3) Need a BDC due to network growth? Better buy another server, cause you can't make an NT server become a PDC or BDC after installing it as neither. It's either reinstall an existing server or buy a new one.

    4) Want to change just about anything? Better schedule a server downtime, cause you're rebooting. And for those of you who say "at least you don't have to reboot after changing the IP address", ever noticed how fucking unstable NT networking gets after you change that there IP without a reboot?

    5) Got a wierd problem? Chances are you're gonna be stuck there for a nice long time with many many reboots, almost definitely a reinstall of the software in question, and a strong possibility of reinstalling NT.

    I'll take having to know my way around rc scripts over NT shit any day. At least it's really hard to fuck up a *nix box enough to require a reinstall, or at least a big dose of stupidity, in which case what the hell are you doing running a server?

    NT means MORE admin time, MORE potential to royally fubar the server, MORE downtime. In the last 9 months, I have been activelty administrating a number of *nix machines and several NT machines. I've never had to stay at work late as a result of the *nix machines. The NT machines have given me many long nights of extreme pain. Especially that one where I was at work till 4 am. I wanted to drive to Redmond right then and slap every member of the NT development team.

    "Microsoft. Where do you want to go today? Better be close, 'cause you're walking."

And on the seventh day, He exited from append mode.

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