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I got into the web industry in 1996 by simply being a DTP hobbyist doing print jobs on the side by playing around aside working in my actual original profession as a chemist. I did part-time work for a web company when websites really sucked compared to how websites look today. HTML was still even below version 3.2.

The building up of the dot com bubble

At around 1999, was when I was in the web industry full-time and when everyone just believed in the the online advertising business model after being inspired by so many companies where one of them was Yahoo.

This made everyone think, if you have a dot com, you will be rich! Just make a website and get people to advertise on your site and you will be rich! It was hyped up and it stirred the minds of businessmen that did not know how the web really worked and also web guys that did not really know much about business. I can say I was one of these web guys back in 1999.

Inspired by our dreams with some partners, we came up with our business plan that evolved to get better and better from the day we decided to go for a dot com business. Common word during those years were venture capitalist and incubator. The business concept was I’m a tech guy, and I have a service and/or product and I believe it will be a hit. You are the rich guy with the money. Give me some money and I give you the product/service and we share the profits where the amount of shares are determined on whatever is agreed upon by both parties.

Other common words those years, were new economy and human capital. Where people with ideas were proving that their ideas are worth a certain high amount of money, thus these idea people had, should give them some ownership of the company based on their knowledge and skill as capital. People were so optimistic in this new industry and it was like no business plan will fail. Many business investors were not knowledgeable of online marketing. Some were easily sold out by the idea of tech guys. Some invested millions right away. News on buy outs were happening everywhere. Some with very large prices. I still remember one of the craziest, someone bought the country code domain name beauty.cc for $1Million US Dollars and I never heard about them after that domain buying event.

If business people were ignorant, so were many I.T. people, they had ideas with no business knowledge. So many people requested so much from investors for their work environment. It even included crazy work areas that often did not look like an office but a play area. Aside from the capital investment to be very high, opex as well. Companies often had too many employees with high salaries as the start up company had zero profits starting out. But it was so hyped up, so many deals like these started coming out. Some making big press releases of the merger, buying, or creation of these companies. Some even trying to out-do the other in press releases even without any significant amount of sales going on. It was all hype building up. And this was the bubble building up.

The fall of the dot coms - the bursting of the dot com bubble

It only needed a year for larger companies to realize everything was just too crazy. Traditional marketing companies that believed in tri-media as they studied the 4th media very well, they started to be aware of what works and what does not work. Many dot coms also started closing down. It was just proven that a dot com business model with revenue from online advertising was just not enough. During this time, me and my partners were still in search of the perfect VC. We even had our own business consultant who prepared our business plan and our business presentation pitches and as many other companies were closing down, we were just starting and trying to improve on the weaknesses other companies had.

The term click-and-mortar came out which mainly meant to have an online business with online advertising as source of revenue but must also have a tangible brick and mortar component of the business. Something physical since the 100% web only dot com did not seem to work anymore.

By this time, me and my partners, as well as our business consultant just gave up on the dot com idea we had and knew there was way more education needed on our part. This was already the fall of the dot coms as well where all the dot coms started closing down except those that really had exceptionally great business models that was well taught of from the idea to execution. The whole supply chain is laid out well and also had the large enough investment backing to make it through the hard first years.

This was already when many business investors did not want to do a dot com business at all. They would go back to their old investment strategies in other vehicles like real estate, oil/gas, gold/silver, stock market and others. And the bottom line was:

Money cannot be made on revenue from online advertising alone.

Here comes Google that changes the search landscape.

First is they improve the search engine algorithm, although many may still complain about that today but it is definitely way better as how it was before that pushed other search engines to either rely on better search engines to syndicate their searches or improve on their own algorithms. This also changed the profession on search engine optimization (SEO) and search engine marketing (SEM) in general.

And with all the online ad publishing companies, it was when Google’s Adsense made a very good contextual ad system that many advertisers loved with their PPC model. While setting the trend, Yahoo’s Publishing Network (formerly Overture) and MSN is coming out with their new better contextual ads, together with other all other similar businesses with very good contextual and affiliate marketing, a new buzz word now is website monetization.

Using current day SEO knowledge, Internet marketing using viral marketing concepts, maximizing emails, mailing list, newgroups, blogs, forums and social networking, sometimes this can be created by one person at home, some Internet junkie doing nothing at home and studying these concepts, making websites that just generate a lot of traffic, to a targetted market and in combination with the many ways to monetize the website, there are several people making money out of online advertising.

As said before when it was the fall of the dot coms not so long ago, a dot com business model based on online advetising alone will not make money.

But thinking about that today… many people in the SEO community, Matt Cutts, Jeremy Zowodney, Aaron Wall, Todd Oilman, Greg Boser, Shoemoney and more, Adsense people like Jensense, the same SEO people, John Reese, the Metawebs people and more. We now have big Search Engine conventions, even local communities where I regularly participate in SEOPhilippines.org. This has just taught so many people how to make more money, if built slow and stable, they give a snowball exponential effect with passive income and there are many people out there earning more than $100/day on these monetization techniques.

If you come to think of it… most of all websites doing the monetization game have revenues based on online advertising.

Comparing it with the fall of the dot coms, dot coms were trying to be big companies with multiple employees, a big office, a bunch of operational expenses. And today, so many people monetize their websites, working alone at the start, building a website until if just grows so large where I have heard of many people earning more than $10,000/month. Although I am not there yet, with my efforts of website monetization, I am a few zeros short with $100 every 2 months, but it has been constantly improving.