Making Money on the Internet

How much money will our company make on the internet?
This is a question I often hear from businesses.
The answer, the majority of the time is, "in the best case scenario; you'll break even."
When their color returns, I usually ask them this,
"How much money does a bank make off an ATM machine?"
Answer: The bank pays out thousands in installation, insurance, daily maintenance, rental, network linkage, upgrades, theft-prevention, etc. for each ATM. The bank does not make money from its ATMs, it pays money to provide them.
Next question: Would you bank at a place that did not have ATMs?
My answer: No. ATMs are a valued, often essential, service that we have come to expect. For example, I bank at a credit union whose nearest office is 300 miles away. I haven't seen a teller in over two years.
I'm not suggesting that your next modem should come with a cash dispenser. I am saying that the services provided by the web are fast becoming essential and valued services that will help the customer define who they will look to for their needs. Much the same way as the explosive growth of ATMs in the 80s, I expect web sites to continue to bloom in the near, medium, and far future.
Let's look at three areas where the web will become a necessary center for commerce:
Technical and sales support.
Intelligent web-mail processing programs, aka CGI's, can dissect questions for key words and phrases, assigning probability scores and grouping questions into defined categories. The batched results can be forwarded to the support or sales people best able to answer them or even directly responded to by the CGI. At the very least, the CGI can send a comforting acknowledgment to the querying user that the message was received and will be processed in a timely manner. All of these functions, not to mention the saving on tangible and intangible costs of keeping 800-number callers on hold for an hour, dramatically help ease the cost of providing support for the products or services sold. Providing these services, such as support, is not an area of income; the web can help reduce, but not eliminate the cost.
Nexus for product information and technical specifications.
How much information can be given in a 30 second commercial? We've all heard contest rules or car dealership specifications mumbled incredibly quickly at the end or beginning of a radio commercial. The information given there is an extreme précis, just enough to satisfy the legal department. Now consider the ads for prescription drugs in magazines. What's that, around three pages of ultra-small type? The point here is that there are limits to the quantities of information capable of being transmitted over traditional media. On the web, users can go as in-depth as they wish, without imposing this vast bulk of information on another, not-as-interested, user. It is an ideal place to present complete information about a product or service that cannot be summarized into a 30 second spot, and at a considerable savings.
Product purchasing, update, and upgrade distribution.
This is what most think of when asked about commerce on the web. It has become so ridiculously expensive to distribute software through the traditional distribution channels, that for the international corporation and independent developer alike, the web can be defined as a place to save a great deal of money. Software upgrades and updates cost a company tens of thousands of dollars to distribute through a traditional mechanism such as floppy disks and postal distribution. The one-time cost of setting up an easy to use internet file transfer system that can serve thousands of users a day, is a small fraction of that of the mailings. This promotes more timely updates and incremental upgrades. The newest, coolest stuff gets out as it is developed, rather than being held up for a major overhaul that would justify the cost of the mailing.
"This is all fine and good for software, or even hardware companies, but what about my business?" You may ask. This is just one model of how the web can save money. I have built subscription-based trade information centers, secure two-way database access points, internationally distributed scheduling systems, ordering systems that can assist the buyer in obtaining all the requisite parts of a multi-part purchase and many others. There are other examples and uses that stretch only as far as the imagination.