Problems in the network business

Do you still think you can create the next Twitter or Facebook? Then good luck to you!

Many consumers see the overnight fame of Twitter and Facebook as saying: "It's too easy and I can do it." "If that's the case," he said.

In fact, online entrepreneurship is really hard. What I'm talking about here is not technology (though it's hard), but the business part: building a user base and finding a way to make money is the real problem.

Whether it is an emerging company or a mature enterprise, if you want to build a successful network of media assets, then the following are the indisputable facts that must be faced.

All the good domain names have been registered. All the name domain names have been registered, and each one of these domains is expensive. This means you are either making or creating words (like YouTube) or intentionally spelling mistakes (such as Digg) when choosing a domain name. But these names are not easily remembered by the user and are not easily entered correctly.

Once you've found the right domain name and set up your site, it's a problem to get media coverage. Modern PR channels are in a state of rupture. Everyone doesn't read the newspaper very much, and the newspapers only report some news. If the founders are not outspoken successful people, if there is no successful venture, then your business will not be the news. Blogs can add a certain amount of exposure, but blogs often have a limited audience size.

Offline advertising has little effect on increasing exposure. Don't spend your money on billboards, TV commercials, radio or print media ads, because that doesn't add up to your audience. People's focus on off-line advertising does not translate into their online actions. Spending money on such a marketing approach is doomed to failure.

Online advertising also doesn't work that well. Banner ads on the web don't work because no one is going to click on the ads. Search ads are a good option for one-off visitors (if you do have something to sell and those visitors want to arbitrage), they don't turn into system visitors. In this way, you can only win one user at a time, and it is impossible for you to form a large user base.

Optimizing search Engines is a choice, but the utility is limited. Of course you can search around for visitors, and visitors will increase, but there will be no direct traffic or a fixed audience. To make things worse, long tail searches such as the "German Shepherd's Daily supplement of vitamins", such searches are also very competitive. Only Wikipedia has built itself into a top-tier website through such search engine optimization, and even so, Wikipedia will need to use Google's 2% access traffic.

If your company is a mature media company, but your offline brand does not necessarily bring you a large number of off-the-shelf online user base. The network is a completely different medium, some old media brand has encountered many difficulties in the transformation aspect. If you look at the online operations of some newspapers and magazines, the answer is unclear.

In the case of online business, digging a competitor's corner will not result. Two of the most traditional ways to compete for market share, namely, price and convenience, do not apply to online businesses. The Internet media itself is free, and access to each site is a click of the mouse. The quality of the site itself is the only way to get a user base. Then your site must be able to give users a different experience, and this is not easy.

If you can successfully win your user base by crossing all of the above obstacles, your return is: low rates. The online advertising rates are priced according to CPM. Generally speaking, the average CPM for a typical news or media site (such as not web search or E-commerce) is 1 to 2 dollars. But if it is a social network, a forum or other community network, CPM drops to 0.15 to 0.30 dollars. That is to say, if you want to make money, you have to have a lot of page views.

In other words, Internet media Entrepreneurship is not for cowards. It's not easy to win a certain user base first, let alone achieve real profits. At present, e-commerce and network search is the successful model of the network media, of course, some successful network media also run a lot of other business.

So the next time you see a company build a website, win a big chunk of the market and start making money, don't say that success is because everything is too easy or just luck, on the contrary, you should admire the success in such a difficult environment.

Markson is one of Blekko's founders and vice president of marketing, Blekko is a search engine company based in California State Redwood City, and is still in secret operation mode.