Like most people, I use Google search almost exclusively for my web searches. But I frequent Yahoo as well not only for my email (I’ll switch completely to GMail at some point) but also because I seem to like the news stories and cyclic format on the homepage. I had to laugh when I saw one of the latest articles:

Half the reason it was so funny is it made me think of the now infamous “Chedda Gets Cheddar” government grant ads:

We all know that the Gov Grants were scammy, quick cash programs for affiliates pushing crap. To each their own, but the Yahoo article attempts to explore legit ways of making money online. Here are the 5 they listed:

1. Selling Stuff on eBay
2. Blogging
3. Designing and Selling T-Shirts
4. Freelancing
5. Domain Name Flipping

Of the 5 listed above, I would NOT want to do eBay, T-Shirts, Freelancing or Domain Name Flipping. My reason is the exact same for each one: engaging in the practice does not build equity. Essentially you’re selling goods/services that are here today and gone tomorrow. Sure, you get paid immediately… but every passing day you face the same predicament of how am I going to generate revenue.

On the flipside of the same coin, I prefer blogging because not only do I cover topics I enjoy and write content that other people are looking for, but with every article I write I’m contributing to my site’s equity, increasing doorways to search engines and creating more opportunities to generate revenue that has no expiration date. That’s my problem with the others – they have an expiration date.

I’m not saying that blogging is the only way to make money online or the best way to make money online but it’s my personal favorite. eBay and T-Shirt selling programs like CafePress and Zazzle are harder and harder to make decent income from. Margins are shrinking and its just so much work and effort to make a few bucks. However, if I build a blog that gains in popularity, I can easily sell items and/or clothes related to the site’s content on eBay and/or Cafepress or Zazzle. I make passive income while other people do the daily grind of getting products, setting up auctios, shipping stuff out.

At some point we have to consider the fact that we’re all just middlemen. You just have to decide to yourself what position gives you the most leverage. And if you choose to sell an actual product and quit being the middle man, you had better make sure you’re operating on some sort of competitive advantage. There are plenty of ways to make money online but 4 of the 5 listed above aren’t my cup of tea.

Freelancing is an interesting one and I think its great if you have an area of expertise. I’m a jack of all trades but a master of none. Well, I consider myself an “idea” guy so I suppose marketing, creativity and ideas are my areas of expertise but it’s hard to really grasp that or “offer” that to somebody. For that reason, I find myself outsourcing a lot for things like PHP programming and designing. You can make a LOT of money freelancing online but again… are you building equity?

You could argue that the equity you’re building is in your reputation and I think that’s an incredibly valid statement. But still, generating additional revenue is always dependent on doing more work. If you’ve got your own websites, and they’re successful, the sites you’ve worked on can continue to work for you.

Considering the dying state of traditionl newspapers, it’s interesting to see what New York Times Chairman Arthur Sulzverger Jr. said back in 1995 about making money online:

This is all an experiment. We don’t know where this is going. In the end, it’s going to have to pay for itself. We do know that. In the end, it’s going to have to pay for itself. And there’s not a lot of ways to make money.

As far as I know, there are only four–three, if you exclude blackmail–“Mr. Roberts, I won’t put that information up in exchange for $100,” which may be the only way to make money at this business today. Either the reader is going to pay or the advertiser is going to pay, or we’re going to get a piece of the transactional action. If the reader decides that she wants to get theater tickets from the Shubert organization for “Cats,” one, we’ll try to talk her out of it, but if she still goes out to see “Cats,” then maybe we’ll get, you know, one one-hundredth or one-tenth, or whatever the heck it is, of that transaction.

He lists 3 ways of generating revenue:

1. Reader pays for something
2. Advertiser pays for advertising
3. CPA offers (affiliate industry)

He actually lists a 4th method – blackmail – saying you could force someone to pay you to NOT put something online or take something offline that is currently online. It’s actually an interesting business model and if you could figure out a legal way of applying this in a creative way, you could probably bank. But that’s all you cause I’m not touching it.

The comments are astute, however, and are relevant to the conversation today nearly 15 years later. I’m not sure what the purpose of this article is/was – at first I just saw the article on Yahoo and thought it was funny. But I guess that if you really truly and seriously want to dive in and try to make money online, you shouldn’t think ONLY about the buck you’re going to make today and tomorrow but also how that positions you in terms of a long-term success.

Build. Build. Build. Then enjoy the immediate revenue you’re able to generate while you sit on a big fat pile of equity.