Google Adsense is My Business Model

Get Eyeballs. Serve Google ads. Make Money. Rafe Needleman describes how many CEOs tell him that their business model is heavily dependent on google's adsense. (Via Allen Searls) I've heard this plenty of times too.

I think it is wholly unimaginative and risky if you are building a business and your revenue stream is dependent on one entity and one revenue model. Pay per click won't be the best way to advertise forever. And advertising isn't the steadiest income stream, either, over time. Do you remember 1999?

If you can't figure out a way to bring people together for a commercial transaction of some sort that doesn't involve google adsense, I'd say that you have a problem.

But, I wouldn't mind if you checked this out.

Comments

[kris]

c'mon peter, adsense is an AWESOME business model.... if you're Google.

*wink*

[Allen Searls]

Yeah, just slapping blocks of adsense on content pages probably is not sustainable. Wondir is actually primarily built around the sponsored-search model, running keyword triggered ads that look at your exact question and deliver ads from Google's immense inventory that best match your query, resulting in generally highly accurate, unobtrusive ads with healthy CTRs . We just happen to use AdSense at the moment to deliver most of those sponsored-search results ads, but this is very different than what most of the sites are doing with AdSense, and therefore makes us less dependent, as we can and do in fact use other deep-inventory advertisers to deliver those keyword-triggered, sponsored-search results.

Allen

[Joe Bartling]

Using Google AdSense is not a business model, unless you want to stay in the basement or your dining room. Anybody with a title of "CEO" should not say they are using AdSense as a big chunk of their revenue model. The proper title is "affiliate", not "CEO" ;-)

Back in the heyday of affiliate marketing late 90's, I could pick up a smooth couple of grand a quarter from my Amazon affiliate commissions. It didn't take long for Amazon to "adjust" the plan and "suggest" other products, hijacking much of the revenue opportunities.

Eyeballs are not really monetizable, unless you have billions of them, like AOL, Yahoo, etc. Click-throughs are not even monetizable in the long run. Many eyeballs are programmed to click, and many do, especially when affiliate commissions are in the mix.

In the end, successful businesses on the web either need to enable on-web transactions or off-web transactions. The larger the better.

The biggest and most successful online service flew under the radar for a number of years before corporate greed and avarice took hold. The service was Enron Online, and in 2000, it enabled $336 billion dollars of in transaction value in over 548,000 transactions. That's an average of over $600,000 per transaction and over 2,000 transactions every day. See this from their annual report. And on my day job back in 2001, I got to pull it apart from the inside out and from the outside in on behalf of the U.S. Government.

I think it will be a long time before something that transactionally massive and that financially successful will ever be accomplished on the web.