6 Hottest Businesses on the Web

The Web is moving towards a new direction. From simply being an information resource, the Internet is becoming a user-centric platform focused on the needs of users. As Newsweek in their recent cover said, this new phase is “Putting the ‘We’ in Web” (April 3, 2006 issue, pages 47-53) with the “Internet’s ability to empower citizens and enrich those who help with the empowerment.” The Web is becoming deeply collaborative, allowing people to work simultaneously on the same tasks at the same time (example is project collaboration application such as BaseCamp). Many of the new success stories are riding on the powers of social networking (think the very popular MySpace.com); while others rely on user-driven content to create useful resources (great example is Wikipedia). The New Web has turned instant messaging into a crude application with the more powerful instant-voice-messaging and instant-video-messaging applications (Skype is a perfect example). It also allows for getting content here and there and mixing-and-matching them into unique content (Technorati puts together blogs and feeds in one easy to search site). Experts are all abuzz in defining this next stage of the Internet, calling it anywhere from Web 2.0 to Live Web to Next Net. Whatever name this new Web is called, it is important for small online entrepreneurs to catch on and learn how to spot opportunities with the changes. The new Web is full of new business models, and what Business 2.0 magazine calls, “oceans of new opportunity.” All it takes is the ability to see a new way of using the Net to enhance every day living. Here are six areas of the new Web that present new opportunities to small online businesses: 1. User Generated Sites Consumer creation is the big trend on the Web today, with users stepping up creating the content of websites. Think of the mega-successful site MySpace.com, the prime hangout of over 65 million mostly young people (and those who want to reach them) where users built their own little profiles, adding photos, videos, blogs or music. Blogs and wikis as well discussion forums are all types of user-generated content, and they have become mainstream web content in the last few years. Craigslist, the mammoth online classified ads website, is another almost completely self-service and community moderated website that relies on millions of people posting content on their site. As the Website owner, you don’t have to worry about hiring writers or buying content, because you have a loyal and committed base of users who are more than willing to create content for you. In Craigslist’s case, for example, they have become the 7th largest website in the world in terms of pageviews despite having only 19 staffs on board. Plus, your site will grow by leaps and bounds quickly – with hardly any advertising as your members will do the marketing for you and refer friends who in turn will invite friends. Think of areas or niches that you think people could become involved with, or even become passionate about. Build your site around your users, and make them an integral part of your community. Review sites are a great example of user-generated content. 2. Think Casual Casual is another big concept on the Web today. With broadband increasingly available, more and more people are using the Web to do even the most casual activities – chatting, connecting with friends, or sharing photos and videos. Entrepreneurs who have realized this, such as Caterina Fake and Stewart Butterfield of the photo-swapping Canadian startup Flickr, hit it big time. Flickr has 2.5 million members (and growing) uploading and sharing their photos. Unlike other photo sites that allowed you to upload photos in the hope that you order prints from them, Flickr went beyond this thinking and focused on users being able to share their photos. While the founders started “very small and very poor,” their fledging startup has now been bought by Yahoo. Even games now have what is called “casual games.” These are games sold exclusively on the Web as downloads, and are not found on n the shelves of video game or consumer electronic stores. The games are not for PlayStation 2 and Xbox game consoles. Yet New York Times (“On Screens, but Not Store Shelves: Casual Games” by Michel Marriott Published: June 27, 2005) called casual games as “growing more prominent in the ever-broadening game marketplace, becoming big sellers on a small budget.” 3. Google Adsense While Doubleclick may be to the 90’s banner advertising heyday, contextual advertising is hot right now with Google Adsense at the forefront. Adsense has provided Web publishers a great opportunity to monetize their content. Advertising is alive and well again for small online entrepreneurs! Adsense is not new; the program has been around since 2003 and similar programs have since been introduced (e.g. Quigo’s Adsonar, Yahoo Publishers’ Network, etc.). But smart Web publishers are continuing to find innovative ways to succeed with Adsense. PlentyofFish.com, a two-person run online dating website, veered away from the traditional business model used by established dating companies (which is paid subscription) and offered their site for free monetized by Adsense. Go beyond the approach of buying lists of expensive keywords and building a site around these keywords. Instead, find established markets that are traditionally fee-based and offer free service supported with Adsense. Better yet, think of a website whose content will be generated by users (see #1 above), and earn money from the site with Adsense. 4. Search Engine Marketing Search engine marketing has become a critical component in increasing awareness of a website and getting customers to buy products or services on the Web. In fact, advertisers in the U.S. and Canada alone spent $5.75 billion on Search Engine Marketing (SEM) in 2005, a 44 percent increase over 2004 spending, according to a report by the Search Engine Marketing Professional Organization (SEMPO). The report, “The State of Search Engine Marketing 2005,” also projects “that SEM spending in North America will reach $11 billion in 2010. The annual totals include payments to search engines and search-related media companies, search engine marketing agencies and in-house expenditures in support of such programs. The programs include paid placement, paid inclusion, organic search engine optimization and search engine marketing technology platforms.” Search engine marketing is so huge that this is definitely one segment where many smaller online entrepreneurs can actively participate and thrive. 5. Online Classifieds According to JupiterResearch, U.S. online classifieds is forecast to grow from $2.6 billion in 2005 to over $4 billion in 2010. The dominant market player is currently Craigslist, a bare-bones classifieds site launched in 1995 for people looking for almost anything -- from jobs, to apartments to pet sitters to concert tickets. Craigslist has become a flourishing network of online buyers and sellers while maintaining a simple look and feel free from banner ads. It currently takes its fees from a handful of users (e.g. real estate ads), while keeping the site free for everyone. Online classifieds is a potentially huge market that even the major players are starting to jump in the fray. Google has moved into the scene with their Google Base, Yahoo has Yahoo Classifieds, eBay has moved into the fray with Kijiji.com, while Microsoft, AOL and many other players are not too far behind. Even newspapers, which have stubbornly clung to their paid model and resisted the movement to free and instant listings, are starting to realize the wisdom of free listings and are now rethinking their revenue models. 6. Power of Mix and Match The Web has too much information that some cutting edge sites have sprung to help users filter all the information into useable content. Called “mashaps” or mix-and-match, they serve as aggregators, filters and organizers of available content. An example is Simplyhired.com , which is a 'vertical search for jobs' mashup. It gets data from various sources such as job boards, company pages, online classifieds, and other data sources.