How Companies Make Money From Their Website And How Steemit Is Different

Search engines and social media sites are (mostly) all free to use. As are some dating sites and places to blog. Yet successful companies of these sites do well financially. And you see new social media sites popping up, each one hoping to get a piece of the market. They are not doing this as a hobby. But where does that money come from? And why is steemit different? I like Google and I have no problems with other sites like Facebook and Twitter, they have their strengths. But I choose to spend a lot of my time using steemit and blogging on this platform. It has a unique form of monetization that is looking to be the way of the future. But let's start with the other ways sites make money.

Ads:

Advertising is a method that you see in almost every website. And on television and in magazines. It is simple and it works. You put ad space on your website and when people click on it you get paid money. You can make good money from this but it requires a lot of traffic. I mean a lot. A rough estimate is $1 for every hundred views (if you are getting clicks), so you need to be getting over 10,000 views for it to start getting into the hundreds of dollars. 10,000 is a high number for any new individual entering the market but a company that is getting 100s of millions of views, will find it worth it to set up some ad space. Ads have some advantages: they can be used anywhere, they can be photo, video, words and text and unless every human on the planet is clicking on your site, there is no limit to how much you can make from ads. But it does lead you to be dependent on the companies buying ad space and too many ads can be a real nuisance to users. There are, currently, no ads on Steemit.

Pay The Site To Have Your Work Showcased:

This is one of the reasons that high numbers on sites matter. There is only so much space on a website. Who gets their work on the front page? Social media or video sites can offer you the option to pay in order to get your content seen more or search engines can offer you the option to pay to have your work come up first when you look up certain words like cars or shopping. This can bring in serious money, especially for very competitive keywords. You could be paying a dollar or two for every time a person clicks your link. And you cannot blame companies/people who are willing to pay it. If everyone is using a website to look things up, making sure your company comes up first is a great form of passive advertising that can keep you above the competition. Steemit does have a promoted tab where you can have your work on top, but you are burning money to do this, not paying the company for it. Why would you burn money? The less units of a cryptocurrency there is, the better the chance it goes up in volume.

User Data:

Data is money. Your email, your demographic information, what you click on, what you wold be interested in. Knowing what to sell and who to sell to is a business. I am not saying what companies do or do not sell your data (even if I wanted to, I don't work for any of them) but if they choose to, other companies are willing to pay good money for them. We live in a world where we give up a lot of data willingly and companies can use it to tailor their marketing. I am pretty sure steemit does not sell your information, but as I don't work for them, I'm not privy to their business decisions :p.

Now if Steemit does not make money from any of these methods, how do they stay in business? Like bitcoin, steemit has a digital currency (steem) that steemit has a bunch of it. A set amount is created a day and given out to users, as rewards, so people will utilize the coin and, as the value of the coin goes up, they can sell their coins for money. It sounds like as odd thing at first, but with blockchain technology, coins like steem and bitcoin are finite, so you can treat them as an asset or as cash. It is a new way to monetize sites and apps that is starting to get big. And because of this, steemit can pay its users and make a profit. It also leads to a system where the company and its users are all invested to make sure the site succeeds. It is not a you vs me mentality.

@whatageek

*my upvotes/rep disclaimer: https://steemit.com/steemit/@whatageek/my-steemit-account-where-i-stand-on-bots-self-votes-and-multiple-account