Get a good job with good pay and you're okay.
-- Pink Floyd, "Money"
If you think about it, the average consumer uses the Internet for one of two things: browsing or shopping.
Browsing is clearly the older pastime. Millions of people around the world have learned that by tapping into the Web, they can obtain limitless amounts of information on boundless topics. News, weather, sports and stock quotes are all a single click away. Broad content companies such as Yahoo have turned into valuable portals, and vertically targeted properties such as CNET (publisher of News.com) and SportsLine have flourished as well.
Shortly after Internet users began to browse, Jeff Bezos opened an online bookstore in Seattle. This gave the Internet a new purpose: shopping. Three years later, and consumers all around the globe are increasingly using the Internet as their preferred way to shop. This is especially true when it comes to gift giving. Why bring a present home to wrap and resend when eToys can send a perfectly wrapped gift directly to the targeted recipient? As with browsing, online shopping has launched many powerful companies, including Amazon.com, Priceline.com, eToys and Webvan, just to name a few.
As we move past eChristmas 1999, look for consumers to see the Internet in a brave new light: not as a browsing tool or a place to shop, but as a place to make money.
Increasingly, individual Web users are being propositioned not to "look" or to "buy," but to "earn." This could be the most powerful Internet wave to date, as a new virtual economy emerges on the Web. We should also expect drastic shifts in user behavior as money enters the equation regarding where to click next.
The history of individuals making money on the Web begins with auction site eBay, which helped move the neighborhood garage sale into a global marketplace. Suddenly, obscure items covered in dust were much more valuable when offered to a global purchasing community.
Unlocking this dormant monetary value is a valuable concept, as it's easy to collect rent when one of your customers is "finding" money he or she previously didn't have. Just four years after eBay's launch, the company counts more than 7.7 million registered users in its community, most of whom are just like you or me.
The second opportunity for individuals to make money on the Web came in the form of affiliate programs. Though widespread on the Internet, most people have little appreciation for these subtle sales agents.
An affiliate is paid to drive shoppers from its home page to merchants, where users can conduct transactions. Affiliates are typically paid between 5 percent and 25 percent of the transaction if the lead converts into a sale. This allows individuals to monetize the traffic on their sites--even if they don't have their own e-commerce programs.
Refer-it, a community site for affiliates, lists more than 1,000 potential affiliate programs in which the enterprising Internet user can participate. Just to give you a sense of how widespread this is, Amazon has more than 350,000 affiliates (which they call associates), and BeFree, a technology provider for affiliates, claims relationships with more than 2 million affiliate partners.
Large community sites such as Yahoo GeoCities and Homestead.com aggregate these affiliate programs and make them easily available to their users. Yahoo's program is appropriately titled "pages that pay."
The next monetary opportunity emerged as a derivative of the online advertising market. If advertisers want users to watch and/or click ads, why not pay those users directly for their time? Companies like AllAdvantage and MyPoints are focused on this peculiar business of paying people to watch advertisements. It's still too early to tell whether this market will produce a long-term profitable company, but MyPoints has already managed a successful IPO.