We are pleased to announce our Internet Business Initiative (IBI) and our Internet Business Initiative Resource Center. In the late 1990s, dot-com businesses exploded onto the scene. New business models were developed and traditional business models were re-cast into corresponding dot-com models, giving them the potential for tremendous growth. There was a gold-rush mentality. Many people became millionaires, even billionaires-if they got out of the market before the bust. It was an exciting time that came to an abrupt end in the new millennium when people realized that, fundamentally, businesses need to earn profits-not simply "attract eyeballs," go public, cash in and run.
Now the Internet business community is coming alive after five difficult years as was clear at the recent Web 2.0 Conference in San Francisco. Venture capitalists are once again funding numerous Internet startups. The top five or six Internet properties are worth considerably more today than they were at the peak of the dot-com era, an especially significant fact considering that the NASDAQ is still about 60% off its peak. But now it's a more mature Internet and Web community. The new companies have reasonable business models, many of those based on monetization made possible by the exploding Internet advertising market, led by Google and its Adwords/AdSense programs, with competitive programs in beta at Yahoo! and Microsoft Network.
Since the late 1990s, the cost of starting an Internet venture has fallen dramatically. Hardware is much less expensive, Internet bandwidth is cheaper and ubiquitous, and software, through the phenomenon of the open source movement, is widely available and often free or very inexpensive. Entrepreneurs can assemble a small team, with modest financing and get a business going faster. This is resulting in an influx of new ventures. Compared to the Internet businesses of the late 1990s, today's "lightweight businesses" are smaller, faster to start, require less financing and have fewer employees. They also have a real flavor of openness and community.
People want free content on the Internet, yet the people who create that content still need to earn a living. It's difficult to convince someone to pay for content online, when so much similar content is available free. The advertising model seems to work well. People may prefer not to see advertising on Web sites, but it seems like a reasonable tradeoff for free content. Google AdSense makes the advertising on Web sites more palatable through contextual advertising, so many people feel that AdSense ads actually enhance site content. Google is good at this, as indicated by their stunning financial results-in the most recent quarter, Google's revenues approximately doubled over last year's results with profits increasing six-fold! The world seems to want this model-and the entrepreneurial community is responding with a growing stream of new businesses based on the advertising monetization model-at least initially. For many startups the philosophy seems to be "we'll use Google AdSense until we figure out other forms of monetization."
This advertising model is convenient and easy, even for small businesses. The payouts appear to be generous, although Google does not report its share of each transaction. This makes it possible to quickly create very small businesses with an immediate monetization model. The model that seems to be easiest to implement is the "content business," in which the entrepreneur creates a Web site or blog with valuable content. Search engines discover this content and send visitors to the site-in proportion to the relevance of the content. The "publisher" of the content designates space on the page for Google AdSense ads. Site visitors read the content, peek at the ads, and occasionally click on the links in the ads. Each click generates earnings for Google and the publisher. The value of each click is determined by an auction process among Google AdWords advertisers bidding for the keywords that searchers might enter. Google then pays the publisher of the content a portion of what the advertiser pays for the click. Advertisers like this model, because they are not paying simply for the ad impressions displayed on the publishers' sites-they're paying for clicks, where site visitors click only on ads of interest. Publishers like this model because they get paid for each click, not just those that result in an actual purchase.
So, there's now a model that makes it easy for people to start Internet businesses quickly and cheaply. This is appealing to people looking to earn some or all of their income on the Internet.
As a content creator, Deitel is interested in this model. As part of our Internet Business Initiative we are launching a content network of Web sites and blogs on many topics. We are creating some of the content, and enlisting experts and "the community" to contribute more. Subscribe to our Deitel® Buzz Online newsletter for updates.
Our content network will use XML-based electronic publishing technology and content management systems (CMSs). This will profoundly affect the way we create book content for our publisher, Prentice Hall. Many benefits will follow, enabling Prentice Hall and Deitel to publish Deitel book content, ancillaries, and electronic media faster and in a greater variety of media. Customization will also be a major benefit of this initiative. We're looking forward to publishing custom versions of our books on a school-by-school and even class-by-class basis, and eventually even individual-by-individual. We will publish in a wide range of media, including books, Web sites, blogs, RSS feeds, ATOM feeds, and others. We will be using content management systems (CMSs) to manage our content assets and feed them into various repurposing mechanisms.
To launch the Deitel Internet Business Initiative we recently attended four conferences:
- eBay Live in San Jose
- Search Engine Strategies in San Jose
- The Blogging Summit in San Francisco
- Web 2.0 in San Francisco
We'll be reporting on each of these in the Deitel® Buzz Online and at http://www.deitel.com/.
So, watch us grow and come grow with us as we launch the Deitel Internet Business Initiative. It's going to be fun, a learning experience and a growth experience. Along the way, we're going to push the edge of our publishing program with Prentice Hall to continue giving you top-notch programming-language books and ancillaries, customized to your needs and delivered across the full array of print and electronic media. And we're going to be launching exciting Web 2.0-based Internet ventures.