Home Engineering How Websites Generate Revenue
Engineering - Web Dev - May 23, 2011

How Websites Generate Revenue

The internet is and has been a gold rush.

For the past decade and a half, huge fortunes have been made and lost online. There’s the monsters, like Google and Facebook, and then there’s the individual millionaires. The supposed stay-at-home moms who make six figure salaries online. This post will teach you about the different ways to make money online. However, a note of caution:

This blog is not about how to become a millionaire overnight. I’m not trying to sell you any sort of get-rich-quick scheme, because those are inevitably false. At the time of this writing, I don’t even have this blog monetized. This is my personal blog, and as such, I am writing merely to teach what I have learned.

Without further ado however, the four ways to make money online are:

1. Collect Donations

2. Sell Advertising

3. Sell Your Own Product

4. Sell Someone Else’s Product

That’s it! Those are the ways in which people make money online. I think you’ll find it pretty all-encompassing. (However, if you have an additional method I’d love to hear it. Please reply in the comments.)

I’ll now go into a high-level overview of each method:


There are a number of websites which take in most of their revenue through donations. The most obvious are non-profit organizations or charities. The ASPCA’s website, which I have chosen for the puppies and kittens factor (www.aspca.org) is designed almost entirely around collecting donations. Examples of this are:

A: The middle of their navigation bar has a Donate link, which is also the only link with an icon, and it’s front and center.

B: They have a rotating slideshow banner which presents a large orange DONATE button

C: The top item in the left navigation is Donate

D: The bottom icon in the left navigation is Donate

There’s a number of other donate links on here, but the point is, non-profits and charities bring in an overwhelming amount of income through donations on their websites.

Please note: I do not specifically support the ASPCA or have any affiliation with them.

It’s not just charities and non-profits that collect revenue through donations, however. Many hobbyists, or people who create content just for fun collect donations to help support their hobbies as well. I’m the webmaster for Mordeth13, over at www.m13online.com. Mordeth collects a number of donations on his website from fans who like his videos and help him support his hobby of shooting videos.

Donation collection is a great idea, if you want to build a website where you share something that you create as a hobby and collect donations in exchange for it.


This is probably the biggest thing that’s currently happening online right now. Almost all of google’s revenue comes from selling advertising online. Advertising revenue is what the social media companies make their money off of too. Plenty of bloggers put up adsense in order to make an income off of their blogs as well. Other sites like forums will typically use a combination of advertising from google, as well as direct forms of advertising, such as sponsorships or so-called “Media Buys”.

The way to make money is specifically to find products that are relevant to your site’s visitors, and then to sell advertising space on your website to companies who have products relevant to your visitors. If your visitors don’t find any relevance or desire to click on the advertisements on your site, then you won’t make any money.

A word of caution about selling advertising, however. I frequently hear people tell me that they’re just going to put up a blog and put google adsense on it, and that they’ll be raking in the dough. None of these people have ever actually come to me and told me that they ARE indeed raking in the dough. Adsense payouts are relatively small. You have to have a huge amount of traffic to your website to quit your day job if you’re using adsense.

YouTube partners are probably the best example of this. I work with David Choi of www.davidchoimusic.com, who is a popular YouTube personality. He has millions of video views. You need to expect to be in the tens of thousands or millions of views per month in order to make Adsense pay anything substantial.


Personally, I think that selling your own product or services online is the best way to make money. I believe that if the entire internet is just made up of free content paid for by advertising, then it’s just advertising money chasing around advertising money, and pretty soon you’ll lead to a collapse, since nobody is actually purchasing anything to create money. So, the alternative to this is selling your own product.

Most small businesses who have a website are doing exactly this. There’s physical products (like a TV or a Car), there’s services (like web development, legal services) and there’s informational products (ebooks, music downloads, movies). Most of the websites that I work on and produce are built around selling an actual product. I am the senior web developer for www.stylelife.com, and Stylelife sells a number of physical and informational products. There’s a subscription product for the Stylelife Academy, which is aimed at teaching guys how to attract women. There’s also sales of conference tickets, books, and other materials as well.

I’ve also worked on websites that are designed around getting leads for a brick-and-mortar business. One example of this is www.rigidgarage.com. Rigid Garage is a company who specializes in garage door installation and repair in the San Jose area. Their website is designed around collecting user information so that they can then follow up and provide visitors to their site with quotes on installation, and sell their product that way.


The last option is to sell someone else’s product. This is the so-called “Affiliate Marketing”. Basically, you sign up as a reseller to someone else’s product. You create a website that is relevant to the same kinds of people as would buy the other person’s product (Similar to the advertising) and then they give you a special link to their website which contains your affiliate ID, and then they are able to track the amount of people who come from your site and purchase something on their website.

This can be as simple as sitting down with a friend who has a business and offering to send them sales, and them paying you per sale. This can also get very complex as there are Affiliate Networks, where the network essentially acts as a middle-man between many different sellers (affiliates) and many different products. There are different types of payment structures, but the two main ones are CPL (Cost Per Lead) and CPA (Cost Per Action). The type of payment structure determines if you get paid when someone actually purchases a product, or if you get paid when someone just submits their information.


I hope that this has helped better your understanding of the different ways to make money online. This is geared fairly specifically at people who are building or own a website, but you can use other avenues online as well, such as Craigslist (Typically selling your own product), EBay (Again, your own product), Google Checkout (For sales or donations), etc. There are many different outlets to make sales online, but I have covered the main methods, and will go into more detail on each method in future posts.

Please comment if you have any questions or there’s something that I missed.

4 Replies to “How Websites Generate Revenue”

  1. Makes sense to me. Good summary of the different categories, I hope future posts delve into the specifics of each.

  2. Thanks Jay! I definitely appreciate the feedback. I’ll let you know when I delve in detail!

  3. Hey Mike,

    It’s been a long time! I don’t see your presence at bike nights anymore, hope you’re good man.

    Anyhow, you’ve left out quite a few channels. Seems you’ve been hiding it for the better, huh? 🙂 I’m just kidding.

    You have my email, send me a buzz if you want to chat.


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