AdMoolah News and Views

I have been using twitter for a few weeks now and can now see why people like it so much. I’m not totally addicted yet, but I think that’s mostly because no one I know personally are twits. Once Twitter gets more popular and my personal friends are on there, I could see using it a lot more. Here are some initial thoughts:

• Twitter is to Blogging as IM is to EMail. Email and blogging are slower, more well thought out. IM and Twitter are quick and impulsive. EMail and IM are generally one-to-one (or one to a few), Blogging and Twitter are one-to-many. So think of Twitter as quick and impulsive blogging or one-to-many IMing.
  
• Great for staying up to the minute. It’s amazing how quickly news breaks on Twitter. After using Twitter for a while you feel out of the loop when you learn about something even a few hours after it happens.
• Off-twitter popularity translates to twitter popularity The best way to be popular on Twitter is to have a popular blog or site. There aren’t too many Twitter-only celebrities. If you have an A-List blog and start to Twitter, people will follow. Just look at John Battelle who announced today he was going to start to Twitter. He already has over 70 followers and he hasn’t even posted anything on Twitter yet!
• Lots of good tools. I have been using TwitterFox , a plugin for Firefox which shows you tweets from those who are following and allows you to send updates as well. I have also been using hahlo.com on my iPhone. There are lots of other tools and service out there as well.

If you feel like following me, see http://twitter.com/tlainevool. I only have 4 followers so I am feeling pretty lonely.

Back in February at Affiliate Summit West Jason Calacanis made some comments during his keynote that I’ve been thinking about lately. He seemed to think that people were wasting their time earning $100,000 a month in affiliate earnings and they should go out to create companies that they could sell for tens of millions of dollars.

I think Jason’s comments were probably more to get a reaction then a well thought out statement. I think there are some real differences between a “make money online” home based business and being a entrepreneur and doing a “real” start-up.

I think I have a pretty good perspective on this, I have co-founded a software product company, worked at several small companies, and am doing the whole home based “make money online” thing as well.

Here are several reasons why people might want to do one of these over the other.

1. Different Skill Sets. Building websites, doing SEO and running PPC campaigns takes a very different skill set than trying to organize a company, manage employees and raise funding. Presenting a PowerPoint slide to a VC is not the same as using keyword tools to come up with those winning long tail terms. Although being a “people person” can help with a home based business it is possible to get into it and make money without ever talking to a real person, but you can’t be a hermit and have employees and raise money from investors.
2. Different Lifestyle Choices. Running a startup usually means long hours, being responsible for other co-founders and employees and worrying about meeting revenue targets for investors. Running a start-up involves a lot of moving parts, and if you are the CEO, you need to make sure each one of those parts is functioning. (For example Jason Calacanis was fixing the air-conditioning at Mahalo today.) Although a start-up can have a relaxed atmosphere with no dress-code and free soda, it doesn’t compare with shuffling to your home office in the morning in your bathrobe and slippers to check the latest stats on you site, and than deciding to go skiing that day. I’m not saying the home business route is easy, but it is a lot more flexible then a lot of other choices.
3. Life Goals. To some people sitting around at home in their pajamas making a lot of money would not be very satisfying. There are those who would like to build something of substance that they could be proud of. If you start a company that you can sell for tens of millions of dollars you have something you can point to in your life and say “I did that.”

If I believed in things like personality types I would say that running a start-up is for type-As while working at home is for Type-Bs.

4. Different Risk Levels. When you start a home based business you can start expecting to get some money rolling in within a few months. When you found a start-up, you know it could be a long time before you can attract enough investment money to give yourself a salary. If you don’t have a good bank-roll, you could go hungry a few months into your start-up. If it flops you have nothing to show for it and you have to start from scratch. When you start a home based internet business you can have some reasonable expectation to make some money with enough hard work. And even if it doesn’t really take off you will have a small cash-flow going.

That being said I think there are some similarities between starting up a company and starting a home based business.

1. Need for IndependenceMost of the people who start home business or start-up companies aren’t satisfied working for someone else. They have their own ideas and want to see if they can make it on their own.
2. Self Discipline This is the flip-side of the last point. Now that you are out on your own and don’t have anyone telling you what to do, you need to get yourself to do things. If you’re not self-disciplined enough to put in enough work, no business that you start will succeed.

Of course, I think this is a bit of an artificial distinction between home-based businesses and “real” start ups. I look at people like Jeremy Schoemaker and Darren Rowse, who seem to be straddling the line between these two worlds.

Lately I’ve been thinking about the different strategies individuals use to make money purely online. By individuals I mean someone working alone (or maybe with a partner) who hasn’t gotten any funding, typically works from home and has no desire to build up a large company with employees. These strategies are also purely online, so selling items on EBay isn’t included since it involves physical goods. Here are the different strategies I have come up with.

1. Content Site Publishing. Building websites and writing blogs. Usually this involves make money from a combination of CPC networks like AdSense, affiliate programs and direct ad sales. Another monetization strategy for content sites is subscriptions. Often this starts by building a site for fun and then realizing that the site can be monetized. Darren Rowse (ProBlogger) is a good example of someone who uses this strategy with CPC networks. Jeremy Schoemaker (Shoemoney) is someone who has had success with subscription sites. John Chow is someone who has done well with direct sales and affiliate programs. I also put myself in this category with CPC and affiliate programs.
2. Paid Search Marketing. The goal here run massive PPC campaigns on networks like AdWords and Yahoo Search Marketing to drive traffic to landing pages. Affiliate programs are used almost exclusively for this strategy. Amit Mehta is a well known PPC Marketer.
3. Email List Marketing. Some online marketers build up huge email lists and then sell informational products (i.e. ebooks) through messages to the email lists. Almost any AdSense “Guru” uses this strategy. Examples are Joel Comm (AdSense Secrets Revealed) and Mike Filsaime (Butterfly Marketing)
4. Arbitrage. The strategy here is to but PPC traffic for relatively cheap and then send the traffic to sites that have a ads with good CPC on them. I can’t point to examples of people who use this strategy as they tend fly under the radar.
5. MFA Spammers. MFA is Made For AdSense. The idea here is to make pages having little content, or creating content by scraping other sites. You then place CPC ads on the page and drive traffic to them. Since there is little content on the site, people end up clicking the ads. This strategy is getting harder to do since Google has been cracking down on these types of sites. Again, most people who use this strategy aren’t willing to admit it because it is seen as unethical.

Of course many people use more than one of these strategies to varying degrees of success.

I’d love to hear your feedback. Which strategies do you use? Am I missing any major strategies?

I’ve decided to start using Twitter. I’m so far behind the curve on this that there are some people, like Hugh McLeod, are even burnt out on Twitter. There is also someone selling their Twitter account on EBay right now. The current bid is $465. The auction is set to end April 22nd.

I thought I’d see what all the fuss is about so I’m starting to Twitter. You can follow me at: http://twitter.com/tlainevool . I’m going to try to keep the tweets more aimed at online/tech things more than what-I-had-for-lunch type posts, but this whole thing is an experiment so we’ll see how it goes.

Here are some free e-books about making money online that I have run across lately. The important thing to remember about ebooks, or anything else you read, is that they can give you the best advice in the world, but that advice won’t earn you a penny unless you actually take action.

How to Develop Money-Making Niche Sites with WordPress
This is a good entry-level introduction to setting up a WordPress site with the idea of making money in mind. A great read for those not yet familiar with WordPress.

Make Money Online with John Chow dot Com
This book goes beyond just setting up a WordPress blog. It discusses the techniques that John Chow used to start making over $30,000 a month from blogging.

High Performance Affiliate Marketing
This is an extensive look at affiliate marketing, weighing in at 148 pages. It goes through an introduction to affiliate marketing, shows how to pick niches, build websites and then get traffic to the site via Paid Search and SEO.

If you have any favorites that I have not listed here, leave a comment. I’ll update the post with the books that I check out and like.

I finally got around to doing some much needed maintenance on this blog.

First switched hosts. (I highly recommend DreamHost, use this link and promo code ADMOOLAH50 to save $50. Yes that’s an affiliate link.) I used to have this site on an individual hosting plan that was costing me about $30 a year, which was way too much. The old host was also less reliable (lots of downtime) and slower.

I also upgraded to WordPress 2.5, and so far I like the changes. I know I should always keep up with the latest version of WordPress, but it usually takes me a while to get around to it. It really is pretty easy upgrading and only takes a few minutes, so I should do it more often.

I have also been neglecting this blog as far as posting goes, but I hope to change that as well. I’ve had a little change in job situations which should give me more time to blog here, and more importantly will give me more time to devote to the sites that actually make money for me.