Note: This article is based on the author analysis. The reader discretion is advised.
Last week I received an email from one of the readers who asked my advice. He has a dilemma that he wants to share with me. He read so many times about people who are doing millions online. They all mentioned Google AdSense and “big money” in one sentence. His question was very simple: Is it true that people are actually doing millions of dollars online?
He asked my advice whether to put the effort and to develop his own Google AdSense websites network. He wants also to make his one million dollars online. “What are my chances…?” he asked.
Why am I bringing his story in my SEO blog?
Sometimes people choose the wrong reason to initiate their own website. One of those wrong starting point is Google AdSense. My advice is simple: Don’t ever think to launch a website just because you think you can earn few bucks from Google AdSense. In most of the time you will end up with a website that gains a total income of $1000 in a few years. You need to find a good reason to launch a website: a valuable service, a good knowledge to share with others or a good product to sell online.
The internet market is the largest market ever, almost with no boundaries and no limitations. People are truly making millions online, but not with Google AdSense. Most of them are selling products or service. The number of webmasters who earns the big money from Google AdSense is very low comparing to the total number of webmasters who integrated it in their website.
Allow me to base my argument. You don’t need a master degree in order to understand the following explanation. All you need is a good common sense and internet connection ;).
Let’s take a look at Google’s last financial reports. These reports can be found free of charge at Google website (http://investor.google.com/releases/2006Q4.html). Google is a public company. Therefore Google is obligate to publish financial reports quarterly.
In the report you will find a section describing the TAC - Traffic Acquisition Costs.
It’s the portion of revenues shared with Google’s partners. Google saying that she paid total of $916,000,000 to her AdSense partners during that quarter.
How much a single website is earning? It’s very hard to say, mainly because Google TOS is forbid webmasters to share their income with others. In an article that was published at the New York Times we found a clue for this question. It was mentioned there that Google pay ~$10,000 per month to the webmaster of Digital Point (DP), one of the most busy forums on the web. Meaning Google is paying DP ~$30,000 quarterly.
DP website is a busy website, loaded with traffic. How many busy websites like DP on the web? 1,000, 10,000?
Internet analysts estimates that Google has ~250,000 AdSense partners. I played a bit with the numbers. I tried to demonstrate that if I will assume that 7,500 websites earn like DP and the rest much below, you will be able to see that most of the webmasters barely make $500 per month.
At LifeAfterAdsense website you will find a survey that was made among large number of webmasters. They have been asked about the amount of money they earn per month from Google AdSense. The results are pretty much the same as my assumptions.
Don’t get me wrong. I don’t think AdSense is a bad business model to rely on. It definitely can be a very profitable channel. What I am saying is simple; do not launch a website just because you think you can earn the big money from Google AdSense. Don’t spend hours and days doing SEO for a website that has nothing to offer but Ads. In the long run it won’t be a profitable website. In order to earn lots of money from Google AdSense you need to have lots of traffic. Continually traffic will only exist for websites that have something valuable to offer.
