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Making money from Internet
By Fiona Harvey
How can companies make money from the Internet? Many companies have tried and failed. Even big companies like AOL and Yahoo! They are doing less well these days. People did not buy enough to keep the dot.com retailers in business, and advertising did not make enough money for them.
Martin Child, UK Managing Director of the Internet Company Overture, says you have to make it easy for customers to find you. Overture began as Goto.com in 1997. Advertisers pay to get their products at the top of the list when surfers enter keywords into search engines on the Internet. This is called paid-for placement searches and it seems to work. Overture had revenues of $142.8m in the first quarter of this year, and a profit of $29.3m. Sixty thousand advertisers use its services worldwide.
The world's biggest search engine is Google. It first offered paid-Replacement searches to advertisers in January 2000. Now clients can buy keywords so that customers see their sites on the right-hand side of the screen. Google now has AOL and EarthLink in the US and Lycos in Canada as its biggest clients.
There is strong competition, and paid-for placement companies must offer services which seem to be different from their competitors. Staffan Engdegard, Senior Analyst at Jupiter Research, says, "There isn't much difference between them. So the market will be very competitive". If advertisers see little difference in service, the main competition will be on price. Google, says Engdegard, may stay in first place, but it too will have to keep prices low.
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