Granted I'm sure your comment is facetious, but I do want to point out that it's a bit of a naive view.
The best (outside of unethical methods) way of making money is to generate true value for a customer and allow a medium for that customer to transfer value (in the form of money) to you.
In some cases that customer is the end-user, but in many it is not:
If you make a tool for students, it is the parents or teachers paying for it.
If you make a tool for employees, it is the employers paying for it.
If you make a tool for people to surf the web, it is the advertisers paying for it.
True value would be if students wanted to pay for it themselves, employees themselves, people themselves. Price something correctly (not cost prohibitive) and if you really have a true value building product then people should be willing to purchase it.
If you had a better version of Excel, you could sell it to companies for lots... or sell it to the workers. I'd say you had a better product if you had a product capable of selling to the workers. And while this may not be as much of a cash cow as large corporations, I'd think this was closer to True Value.
But even that is not "true value." I'd think true value is something where you are generating a win-win. An example that came to my mind was Mint.com. Their business model (along with more retail advertising) involves giving money saving suggestions (credit card offers, better mortgage offers) and then charging the financial institution less than what it is charging them to generate a new referral. A "true value" is a win-win... not something like, "well I guess I could use a male enhancement pill, Google... I'll click your ad."
By "true value" I mean that the product creator has a positive ROI on his time, and the product consumer has a positive ROI on his money.
This does not mean that the user must be the buyer. A clear example is a productivity tool (product ABC) that Employer X buys for its employees. The employees save enough time to offset ABC's cost and therefore Employer X saves money by buying the tool. The creators of ABC used sufficiently small hours creating a reproducible product and therefore make a profit.
The less clear example is that of advertising. Google sells real-estate and guaranteed views and has a positive ROI. The ad company pays for the real estate and gets sufficient hits and hopefully has a positive ROI. You get to use Google's services with some distraction which you find to ultimately save you time, so you also have a positive ROI.
That is a good point about real estate and a great POV but I think this is not Google's value proposition.
Google is saying, use our search engine and you find what you want better and faster. We save you time. (Do no evil?) Google doesn't aim to be a "distraction" that ultimately saves you time, they want to save you time period. If they could, they would give you exactly what you wanted each and every time. But their algorithm can't tell when you're browsing for pleasure or looking for something in particular. It can come close, and in the end some people will be distracted by them whereas others will have exactly what they needed.
Google wants to make profit in the opportunity costs involved in searching for something. Searching for a product has all sorts of pains associated (analysis paralysis, getting lost, etc etc)... google wants to make profit between this consumer cost and the amount of ineffective money spent to reach consumers.
It also seems like you are focusing a lot on banner ads. I think one interesting statistic (sorry can't find a more recent one right now). Is that banner ads are about 20% of ad spend whereas search is 52%. I think Search is a even higher percentage now. Source: http://www.scribd.com/doc/12991408/Internet-Advertising-Tren...
A good way of making money is to sell things. But that is a way for a business to make money, not a site.
It has never completely gone away, but there was a time when instead of having ads, people thought sites should have shops. Newspapers would have shops. Sell mugs and pens. A lot of sites like news sites actually added them.
This idea never went very far.
Facebook and the like are here to stay n the internet. Even if Facebook itself goes out of business, it will be replaced. They are not a store. They do not magically turn their visitors into Amazon visitors by selling stuff.
Well, not to burst your bubble but there are many sites that use this exact business model.
One of the sites that comes to mind is homestarrunner.com - who have been doing this since they started.
Granted, it doesn't work for every business, but the fact is that if you create a service that your users genuinely care about, they will purchase your merchandise, because for those users, this enhances their overall experience.
It's a classic model that's taken straight from hollywood. Merchandising revenue is a HUGE factor in lots of productions.
You're limiting yourself. Selling things doesn't mean having a crappy web store with mugs in it. For facebook it means figuring out how to package and sell its massive database of golden marketing data. For Homestarrunner it's a matter of figuring out how to bring people into their in-group by uniting them with recognizable paraphernalia.
For you it might be something else, but it's almost certainly not mugs. Your comment boggles my mind:
> But that is a way for a business to make money, not a site.
If you are trying to make money with a website, that's called a business. Otherwise it's a hobby, which is fine too.
