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Experiments in making money online

Posted 17 years ago

Is it possible to make money on the internet, if you try really hard? I want to find out. I have always been interested in getting money for doing nothing. In an ideal business, you would do some initial work to get a system set up, and then wait for cash to come in. Here are some results, including revenue earned, from:

Shareware
Adware
Adsense
Donations

Shareware

My experiements in shareware have been a dismal failure. I created Hotkey Jumpstart, a utility program that lets you start any program or music file by typing a few letters of its name, in 2004. After posting it on dozens of sites, I do have a hard time getting downloads, and hardly anybody registers. In two years, I made a total of $25.12 US.

The association of shareware professionals, which I joined for a year, has a few examples of success. Winzip apparently made lots of money, and its creator could earn a living off it it. A few others worked well too.

Apparently, software utilities are a bad category for shareware, and they don't do well at all. I think games would work better, because my wife has bought several flash games online. But to create games, you have to use Adobe Flash creator, and it costs $699 to download. That's pretty hard to justify.

It is also possible that Hotkey Jumpstart doesn't even work for most computers. It has when I tested it, but if it weren't working at all, I doubt that anybody would bother to email. Having a shareware product makes beta testing difficult.

So shareware hasn't worked for me. I think it would work better in these areas:

BlackBerry applications Web sites like Handango have gotten people used to having to pay to download something, without trying it out first.
Apple shareware Because there is so little software for Apple, people are still willing to pay for good applications.
Games - Games are easy to monetize. You just have to make extra levels, or put in a time limit.

Adware

In the year 1999, the term "spyware" didn't exist. We had trojans and viruses and if I heard the word spyware I would assume it is some kind of trojan that steals passwords (this is not what spyware does today). After I released Banshee Screamer Alarm, it was wildly successful because it was a free, and I had consciously made it better than other alarm clocks at the time. It was getting thousands of downloads a month.

I got an email from the marketing director of a company called Onflow. Onflow was trying to compete with Macromedia Flash. Their product was better because it allowed smaller downloads. If they could get their browser plugin installed on a lot of browsers, then they could (like Adobe today) charge advertisers hundreds of dollars for their program to create ads. According to this marketing guy, if I included the Onflow installer with Banshee Screamer Alarm, they would pay me 14 cents a download. I accepted, and I included their installer in my program.

A few months later, I got a check for about $1014 US, which I used to buy much needed clothing (my wardrobe at the time consisted of T-shirts that I got by signing up for things online). Then the checks stopped coming. Apparently Onflow went defunct in the tech crash.

So at one time adware was a very successful model. But what about today? I recently researched this topic. We all remember when the Opera browser had banner ads. At one point, pkzip for windows had banner ads too. I searched for ways of including ads in my programs, but all the companies that do this have apparently gone out of business.

The most successful company is Zango Cash, which apparently pays a huge rate for installs (if their web site is true). I refused to work with them, however. After some research, I found that they are the creators of the CoolWebSearch toolbar, which crippled my grandmother's computer. I spent a couple of hours trying to remove it, so I will not inflict this on people even for .40 cents a download.

Web Ads

When I was first promoting Hotkey Jumpstart, I dropped $60 into the Google adsense program for zero return. I read horrible stories about sweat shops that get paid to sit there all day clicking on Google ads. So the entire adsense program stunk to me. However, when I released PhotoWipe I found that my web site was getting thousands of hits a day, so I signed up for adsense.

My main problem was that people didn't have to visit my web site in order to download PhotoWipe. So I modified the installer to open up a "thank-you for downloading PhotoWipe" web page after you install it. (This is also how I track how many downloads vs installs I have).

On that web page, I put in the google ad for Picassa, which is actually very relevant. It says "Organize your Photos with Google Picassa". So problem solved! Every install gets exposure to the ad. One important remark: Google claims their "referral" program pays "up to" $2 per install. This is a blatant lie. Actually, I get 10-20 cents per install.

One problem was that (as far as I can tell) google referral ads don't change their language according to the user, but most of my installs were coming from Japan and Spain. My php code takes care of that, my choosing the ad based on the HTTP_ACCEPT_LANGUAGE code.

Results for ads

If all you want to do is pay for bandwidth, it's okay. Right now, people downloading PhotoWipe consume about 1 GB/day, which costs me $1 from my internet provider. I get about 4-5 installs of Google Pack per day, which is just over $1. So I'm just scraping by with a few cents a day of profit.

Once a week or so, somebody clicks on a $1 ad and my profits skyrocket for that day. Also, I seem to get a few dollars more, for a couple of days, whenever PhotoWipe makes it to the front page of a major web site (usually in Japan). But such earnings are short-lived, and the bandwidth costs make up the difference.

Donations

Since my shareware business is failing so badly, I wondered if donation works. At Donation Coder there is a discussion of it. Overall, it doesn't work.

The "Thank-you for installing PhotoWipe" page also has a paypal "donate" button, as does the Help menu. In one month, I have had three donations that total to $18. At 15,000 installs (that's installs, not downloads), that's pretty dismal.

Conclusions

I will continue this experiment, and updating this entry as new facts come in. Right now, it looks like the Google Adsense is a clear winner for keeping up with bandwidth costs, but there is not enough to make a profit. Donations come in second, but there is not enough data, since they come in so sporadically. Shareware fails for the Windows platform, because people won't download it. If I were unscrupulous, I could probably make a few thousand dollars a month with spyware / trojans.

Steve Hanov makes a living working on Rhymebrain.com, rapt.ink, www.websequencediagrams.com, and Zwibbler.com. He lives in Waterloo, Canada.

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Paul L.Rogers

nine years ago

Making money online is always difficult from products and services, because ordinary end-user consumers pretty much expect everything to be free (and most stuff you're competing against is, unless you have something very unique).

My advice to making money is:

1) Offer value and identify a large ready made community that can benefit: Can you offer something WITH your product or service that brings a considerable value to the community. Maybe financial value, time-saving value, or something else. That value will have a price. If the price is reasonable (perhaps a few dollars a month), and you explain why it's valuable, many will pay it and word will spread in that industry/community.

2) Most online business models that offer free services or products do so on the high volume model and become very successful at it (that's how Google started remember). If you have 10,000's of users/visitors, that's advertising and marketing traffic. You need to analysis it carefully, value it, and use that add space.

3) Rather than just selling ad space to Google or whoever, look to forming your own affiliations. It's far more profitable. You'd be astonished at how much some companies/offers pay out (particularly things everyone needs like banking/financial/insurance services).

4) If you're a good programmer and interested in financial markets, check out the MT4 platform and EA's as a way to make money online directly and indirectly from the financial markets and massive global MT4 userbase. You can write an EA and sell or license it, you can do mirror-trading subscription services, or you simply trade yourself starting small with a few dollars and scaling up

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Jamie

14 years ago

I would like to say that your blog is a great resource, and for the past hour and a half I have been addicted reading your posts. I am prospective programmer and I am trying to get the ins and outs of the field and your site makes it easier to do so. Thanks!

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http://www.canadabusinessplans.org

14 years ago

hey im a spammer but still i really like your blog keep up your good work

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Pedantic

15 years ago

I think you made a minor error. You said you got 14 cents per download for your alarm then later you say that Zango pays a lot but you list their price as .40 cents. I assume you didn't mean to put the period.

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Kat

15 years ago

Steve - wow, that's really sad that people downloaded your software and didn't donate. I guess I'm weird, because I always "donate" something when I download a program that I keep and the creator asks for donations to help. I thought everybody did. I'm sorry to hear that I'm in the minority.

And to Scott, the guy who makes 22 million - are you married?

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Sean

15 years ago

There is money in shareware if you do it right. I get enough each month to pay the mortgage, which is not bad for a side business I spend very little time on. My brother does shareware full-time and makes a killing.

In my experience, the iPhone thing is overblown. There are a few devs creaming it, more scraping by and a lot failing miserably. There is money to be made there, but the goldrush days are other.

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Steve Hanov

15 years ago

Ha! I wish someone had bothered to crack my app. I put in a lot of tricks in that thing that would drive them crazy.

There are five separate, completely different instances of code that check the registration at different times. The most insidious part is that if any one of them disagrees, it would pretend to work, but only on that machine.

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Dax

15 years ago

One thing you forgot to mention about Shareware: Within 30 days of releasing your shareware on the world, there will be a crack or key generator out in the pirate scene. And I had a really sophisticated key algorithm, and they just reverse engineered it. Don't think that just because your application is almost unknown and costs $15, that they won't create a crack or keygen for it. They'll do it, not for economic reasons, but for ego gratification reasons within their pirate community, to lay claim to being first out with a keygen or crack. I had sold 4 copies of my app before a keygen hit the net.

Shareware is a really depressing business. Way too much effort for too little reward.

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Mark

15 years ago

I suggest you drop Windows, get yourself a Mac, and develop for the iphone... there are guys making a fortune on that platform.

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mindful_learner

15 years ago

Unfortunately, you have a product here who's functionality is now native to Windows Vista and in earlier versions of Windows there are good freeware alternatives. You probably need a much more useful/impressive product to start making some real money. All of these 'experiments' are really just ways of showing you haven't created something useful enough yet to make real money from.

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Scott

15 years ago

I just sell software and I make good money doing it. The software has to be useful though, not some crap put together in a week. And there has to be good customer service and you build up the product's reputation. For 2008, my gross income was $22 million and I now employ a half dozen other people. All run from my garage, and ten years ago I was unemployed and bitter.

You can waste your time selling spyware installers and begging for donations, or hoping for ad income, but if you spent the same amount of time creating one good product, you would be completely supporting yourself by now and have a guaranteed income for life.

Just saying.

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Aaron

15 years ago

If people are not willing to pay for your software, then it is of no financial value, then you shouldn't expect to make money off of it. If your software is valuable, people should be willing to pay for it and you shouldn't make it free. At most you should give a trial period but in general, the free business model rarely works.

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someguy

15 years ago

Switch your downloads to a CDN, simplecdn.net charges 6.9 cents a gig.

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Steve Hanov

15 years ago

I hope I am not encouraging people to take up spyware!

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madpinger

15 years ago

Thank you for this artical. It was very helpfull and informative from both a business and technical perspective.

In my own experiances, I have had about the same results revenue side. I have to say, I was able to pick up a few good ideas from you here. ^.^

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Jim

16 years ago

Thanks Steve..I will try the software and contribute if I like the way it works...and thanks for the read, very interesting

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SmartAlec

17 years ago

Great article! I personally have had some (limited) success selling software directly from the net, so I know this can work.

The big hero in this field right now is Will Shippley from Delicious Monster (www.delicious-monster.com). This is a 40$ application that only works on the Mac, yet he has sold several tens of thousands since November 2004. No employees (only part-time student help), no office (he works from a coffe shop) and no partner (his partner left to work for Apple). Now, that's the life ;)

The idea is to provide one function that everybody will want and concentrate on looks and packaging, to really get these "impulse" buy.

Look at his application, then look at yours. I did and it bummed me for a while. Then I got workin'....

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