AdMoolah News and Views

Depending on the type of person you are, this story will either make you depressed, or will motivate you. Ashley Qualls, who is 17 years old, runs a MySpace layout site targeted towards teen girls – and she earns $70,000 a month from AdSense.

Fast Company has an article about Ashley.

Some of the more interesting quotes.

At 17 going on 37 (at least), Ashley is very much an Internet professional. In the less than two years since Whateverlife took off, she has dropped out of high school, bought a house, helped launch artists such as Lily Allen, and rejected offers to buy her young company. Although Ashley was flattered to be offered $1.5 million and a car of her choice–as long as the price tag wasn’t more than $100,000–she responded, in effect, Whatever. “I don’t even have my license yet,” she says.

She has taken in more than $1 million, thanks to a now-familiar Web-friendly business model. Her MySpace page layouts are available for the bargain price of…nothing. They’re free for the taking. Her only significant source of revenue so far is advertising.

“My mom still doesn’t understand how I do it,” Ashley says. To be fair, she did go to her mother for the initial investment: $8 to register the domain name. Ashley still hasn’t spent a dime on advertising.

This is really amazing. It shows that if you find the right niche and know your audience well, just about anybody can do really well on the internet. There is no more need to have an MBA, find funding, or even have a business plan to have a very successful business.

I’m testing out a new widget called BlugRush from Income.com’s John Reese. You should be able to see the widget in the right sidebar.

The idea behind the widget is that it displays headlines from other BlogRush users on you website, and your blog’s headlines get displayed on other people widgets. So it is basically a way of gaining some extra traffic to you blog. For every visitor that sees the widget on your blog, you earn credits, and those credits are used to display the latest headline from your blog on other sites.

They also have a referral system in place where you can get a percentage of the credits for every person that signs up under you. The referral system goes down ten levels, so people who get into this early may get quite a few visitors from this. I guess it’s too early to tell how many visitors, I guess I’ll have to wait and see.

Google’s officially approved way of doing AdSense Revenue sharing is through the AdSense API. Websites that use the API can allow it’s visitors to sign up for AdSense and create a revenue sharing program. Up until now, anybody could sign up for the program and start using the API. Starting tomorrow, however, only sites that have more than 100,000 page views a month will be able to use the API.

This means that if you have wanted to try out for the API, but have been waiting, don’t wait any longer. If you sing up today you can still use the API even if your site does not get 100,00 page views per month. The following quote is from their information page about the new minimum pageview requirements:

I have not started developing and do not meet the traffic requirements, is there anything I can do?

Run, don’t walk, to the Developer Information Form to register. If you do this before September 13, 2007, you will still be able to submit your implementation for approval, regardless of your traffic. If you do not meet the traffic requirement, you must submit your implementation for review before December 15, 2007.

There was recently a thread at DigitalPoint forums that asked the question, “Is AdSense a monopoly?”. Almost half of the people who responded to a poll thought it was a monopoly. AdSense is not a monopoly, and here’s why.

Investopedia defines a monopoly as “A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition – which often results in high prices and inferior products.” Given this definition, AdSense is clearly not a monopoly.

AdSense Does Have Competition

AdSense does have a large share of the self-service ad market, but could you say it owns “all or nearly all of the market”? A survey of the Technorati Top 100 blogs shows that AdSense is the biggest player, but doesn’t even own half of that space. AdSense appeared on 24% of the top 100 blogs, 21% had no advertising, BlogAds and Doubleclick each appeared on 15%, with other ad networks appearing on 25% of blogs. So there is clearly significant competition.

AdSense Doesn’t Have Monopoly Power

So, I’m sure there are those that will argue that the above survey is too unscientific and doesn’t count. Lets move to important part of the second part of the definition: “high prices and inferior products”. Does Google have so much power in the market that it can get away with treating publishers like crap? Hardly. It has been calculated that Google give 78% of the revenue to publishers. This is a much better cut than many advertisers give. For example ReviewMe keeps 50% of the revenue and Affiliate Network typically keep 30%. So with Google keeping a smaller percentage of revenue than many of their smaller competitors, they cannot be accused of using their market leading position to slack off. When it comes to features and innovation it is also clear that they are continuing to push the envelope. Just this year they have introduced major improvements like Video Ads and Referrals 2.0. If Google had a true monopoly there would be no need to continue to innovate.

Why Isn’t AdSense a Monopoly?

So given that Google has great brand recognition and it seems like all anybody talks when it comes to Web site monetization about is AdSense, why doesn’t it have a monopoly? Unlike the in physical world, it is difficult to maintain a monopoly in online services. For example, take Bloglines. Bloglines used to have a lions share of the online feed reader market. It was basically the dominant reader – until Google Reader took off and now has a larger market share than Bloglines. Also, take the example of MySpace. There are no arguments that it has dominated the social networking space. However Facebook is making huge inroads here. If Facebook continues to innovate and attract users like it has been, it will soon be a very real challenger to MySpace.

In the physical world large players can make it difficult to compete by very legitimate means, like getting great ecomomies of scale, or sother tactics, like setting up exclusive contracts with suppliers. In the online world, these types of competitive advantages are simply not possible. In the physical world, being bigger means you can do things efficiently, such developing large distribution networks that smaller competitors can’t match, or making sure you have a larger and better space on the supermarket shelf compared to your competitor. In the online world bigger is not really better. Anybody can get cheap, reliable hosting and compete with just a bit of time and talent. Just look at Markus Frind who run plentyoffish.com on his own and competes in the lucrative online dating service with much bigger companies like Match.com.

That is the reason that AdSense will never be able to have a true monopoly, there are so many second tier players waiting in the wings, and it’s so easy to switch to another service, that if Google ever really tries something unfair, then they will quickly lose their dominant market position. So in that sense, nobody will ever have traditional monopoly power in the online ad space.

AuctionAds has announced that they are offering an instant $25.00 for new publishers that sign up. They also recently announced that their referral commission is increasing from 2% to 5%. With these two announcements, right now seems like a great time to sign up.