It may sounds like playing with words.

To me ad revenue is one stream of revenue. So a website, or an online idea can derive revenue from ad. It can also derive revenue from selling products, subscriptions, service.

To view ad revenue as a business model. One would have to think of think harder. What do they need to do to get ad revenue flowing in? Some of those are describe in the post.

As for the question, Can website survive on online ad revenue?

Yes and No. Because each person’s definition of survive is different.

Domain cost $8, hosting cost another $40. So yes a website can survive if the ad revenue is more then $48 a year, $4 a month.
I am doing an experiment to achieve $1000 a month by this year.

As long as the idea can get ad revenue above business cost, it can survive.

Note that ad revenue does not you have to be wirting content like blogging. It can be creating a platform for content, like Squidoo or Newsvine.

Claris is right to note that only a few will make it.

Even on a smaller scale, my company runs a portal called brightsparks. Super niched targeted at JC students for scholarships, we sell quite a lot of ads on it too even though mass media like straits times has scholarship specials for years.

Moreover online ads have a strong value proposition compared to offline ads. They are measurable to the extent that we are moving towards pay for results. So marketing dollars can become pay for results or a variable cost rather than just a cost centre.

The example given is asssuming you outsource your ad selling to google. Most decent internet firm will not do that. What company outsources sales to another firm? Sales is core so most firms logically will not outsource it. Most will build strong team of sales staff and use them to build the relationship and value with ad agencies and the niche market of clients they have. So the scenario of ultimately competing with google is highly unlikely.

Frankly those local firms who are thinking of building site and outsourcing ad sales via google long term are not thinking that clearly.

Hi, I interviewed you a few weeks ago about a story of teen entrepreneurship. We talked on the phone, and I remember it was a very nice conversation we had. Did I ever send you a copy of the article? I am sorry my memory is not what it used to be.

Do drop me a note and stay in touch.

Yen Feng
ST journalist

PS The new website design is very nice.

Samewise for on line ad, there is currently no effective mean to automatically remove unwanted and useless advertisement since ad is very subjective thing. Removal of ad or even low ranking of ad might even result in lawsuit as happend to Google.

However, I believe online adv is diminishing in value because of increasingly large probability of “useless ad” than useful ad result in user ignoring them at best.

Thanks for the inputs!

You’r right about the Amazon empire where they provide something of value to the user that they could charge for. And frankly for a lot of successful online startups, that something was convenience. Actually even for these models, I would think that they need to continue releasing more innovations to stay ahead of the pack.

Ad revenues are good to have at best, and a means to supplement revenue. But, as I mentioned, unless you have a Google-sized user base, going purely on ads ain’t gonna last in the long term.

One more interesting thing to note is the for mose users who get bombarded by ads, the mind starts to filter them out sub-concisously. Actually, your brain grows to ignore ads on every kind of media, especially online. A quick test to prove this would be to ask yourself if you remember what the last online ad you saw was selling. I know I can’t.

the ad on the website must have to consistently provided the value to the user. A lot of website tried to link advertiser site that has nothing to do with website. As a result, when user go in, they tend to ignore the advertise link because subconsiously, they think it most probably be inferior site.

Nowsaday, user are getting more sophisticated and know where to seek for site that provides ranking and opinion of “product sites” which give user the power to compare price and quality of service etc

Most probably user will click on advertising link out of curiousity, and if going to buy something, may choose to do some research on other sites that may offer more competitive pricing and service.

Apparently, Google success rely on taking advantage of its brand. Instead of using advertising itself, Google create the tool for advertising and because of its brand can attract ppl to use its advertising service, and those who advertise pay google commission for sale or whatever.
So whoever create the tools and system can create the opportunity and market for profitability.

Similarly, Ebay create a tool and system , and soon $$$$ money follow.

“Give a person a fish, and he will live a day,
teach the person how to fish, and he will live forever”

It is the “how” part of Google that make Google rich. Much of Google is shrouded in secrecy to protect its market value.

http://www.eweek.com/article2/0,1895,1985576,00.asp