As you might have noticed, I decided to jump on the AdSense bandwagon and add advertising to my blog. This isn’t because I think I’ll make anything more than $0.01 a year from it, but because I wanted to experiment and learn more about using AdSense in a live environment.
I had signed up a while ago to try it out, and Google kept sending me emails asking why I haven’t used it yet. I have to say that their emails came across as more personal than nagging, which is something that’s rare for an automated message. Maybe I was just in a good mood when I read the last one.
Almost everything I’ve read shows that you have to have an extremely high amount of traffic to earn any significant money from a program like AdSense. It seems most people who try to build their small business around advertising end up pretty disappointed.
However, take a look at this article, that talks about how Markus Frind, who single-handedly runs the free dating site PlentyOfFish, earns about $15,000 per day from AdSense. The article shows a picture of a $900,000+ check from Google for two months of revenue. Alexa ranks his site in the top 1000 of most visited sites on the web, which is a fantastic feat for using only word-of-mouth marketing and going against some very tough competitors, such as Yahoo.
I’ve been conflicted about the use of online advertising as a revenue source. Early on I had some inclination to base the Ponyfish business model around advertising, but have since backtracked from that. You have to have content that matches what readers are ready to buy, and strike the right balance between alienating your users because of the ads and placing the ads in locations that drive high click rates. I think that’s a lot harder thing to do than it might sound at first.
The up-sell business model requires that you get enough number of people to convert to your premium packages, and that you charge enough to support the free users. That too is a lot harder to do than it might sound at first. I think one of the truths about web service business models is that most users expect to get something for free. Since web services are relatively cheap to start and run, competition can potentially pull potential premium users away by giving away similar features for free.
The conclusion — if Recursive Function branches into online dating services, don’t be surprised. 
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