The Internet is maturing, and what that means

The Internet’s maturity stems from three basic developments: there are more people online than ever before (over a billion), these people are becoming increasingly comfortable with using the web, and lastly Google (and now other advertising platforms) offer internet sites a proven way to make money by offering free content to, and/or providing a community destination for, these online masses. If you’re like me, you need concrete examples to get you excited about what these developments mean. Well, I’ve got some good ones for you and if after reading them, you don’t pound your chest and smile because you’re glad to be a netrepreneur with a pulse in these exciting times, then I don’t know what will help you. And now, the examples:

For an idea of why having a billion people online is such a big deal, look no further than this Wired article called Tiny Slice, Big Market. Once you realize that a specialty niche can consist of a million or more users, you realize that being “small time” can actually lead to big dollars. For some actual numbers on what popular blogs (frequently updated websites that offer free content on specific subjects) are making, check out this Business 2.0 article called Blogging for Dollars.

The general rule of thumb is that the more you know about your readers, the more you can charge advertisers to reach them. Also, advertisers are shifting increasingly-larger portions of their advertising budgets from TV to the maturing web. This is partly why the ability to make great money off of writing for a niche market is a relatively recent development. There’s just more advertising money now. From that Blogging for Dollars article, here’s an illustrative quote about a blog called Techcrunch:

Arrington, a 36-year-old entrepreneur behind a long list of unrecognizable startups, has suddenly become one of the rising stars of Silicon Valley. Why? The answer lies in TechCrunch, Arrington’s blog about new technologies and companies. In the year since he launched the site, he has amassed such a strong following that he’s become a go-to person for VCs and tech execs looking to leak corporate tidbits or announce news. More than 1.5 million readers regularly check out his site. But here’s what gives Arrington real distinction: He’s pulling in $60,000 in ad revenue every month. That’s 10 times what the site was making earlier this year, which was when Arrington, convinced of the potentially monstrous riches ahead, quit his day job as president of a startup to blog full-time.

So now you know that you can make money by growing a readership around a niche subject. However, the picture is not complete. There’s something else you should know. You don’t always have to do all the writing yourself. Some of the best sites are big and popular because they enable their community to contribute content. For a perfect example of this, read about the political blog, The Daily Kos. According to the article, the proprietor of The Daily Kos contributes less than 1% of the site’s content.

The Daily Kos isn’t the only one making bank off of user-generated content. The Blogging for Dollars article linked to above talks about Fark.com, which relies on its users to submit links from around the web. Fark is just the place where all the discussion takes place. It’s the same situation on The Daily Kos. The point is that building a community is one of the best ways to grow your content and make your site more valuable to everyone using it. It’s a win for the site owner and a win for the community. Some people say that relying on user-generated content is exploitation, and I definitely am sensitive to that possibility, but I think it’s more like you are creating the cool place to hang out online, and if people decide that’s where they want to hang, that’s just a job well done on your part.

Finally, the fact that you can give your content away for free and still make money is a primary indicator of the web’s maturity and viability as a business model. In fact, it may be a harbinger of things right around the corner. Hugh certainly makes a strong case for this with his belief that “Blogs are a great way of making things happen indirectly”. He points to the story of Cory Doctorow, a professional novelist and blogger who has discovered that giving his work away for free online leads to a larger audience and probably more money, even if indirectly.

The last thing to keep in mind is that you want to follow your passion. Most of the people making money off of niches are people who care and know about those niches. So find a niche that you’re passionate about and is underserved online, and then get to work because the audience (and the money) is waiting for you.