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31 March 2009

Popularity before profit is the secret to commercial success on the internet

News that the micro-blogging service Twitter has brought forward plans to turn its popularity into revenue by next year, reminds us of one of golden rules of the internet- you need to generate traffic to a website before you can expect to make a profit.
 
Although Twitter has generated a massive following without actually making any money, if it follows a similar business plan to Facebook before it, you can expect it to become a multi-million enterprise before too long.
 
The secret to the commercial success of Facebook, and before that Google, has been to build up a loyal user base before trying to cash in financially on the original idea.
 
These companies provide a valuable lesson to anyone looking at there internet marketing with a view to generating revenue. It is almost impossible to create a website, launch it and then expect to make millions overnight!
 
Before you can even consider commercialising a site you need to generate traffic and this is more likely if internet users feel that they are not under any pressure to pay for any products or services.
 
Free to use websites, whether they provide news, customer reviews or any other form of information are more likely to be trusted if they are free from obvious commercial considerations.
 
Only when that trust is established and the website is attracting sufficient visitors is it possible to explore ways to raise revenue and capitalise on the popularity of a site.
 
This commercialisation may include on-site advertising or sponsorship, user subscription for additional services or downloadable content.
 
Executives at Twitter are reported as saying that the company has lots of time for experimentation with regard to revenue generation, so it will probably be trying a few different things this year.
 
It seems like the company is getting things right and learned from the success of others that any website, no matter how useful, entertaining or informative, needs to concentrate its efforts on popularity before considering profit.



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