The Difference between an Online Business and an Online Hobby

Whether you are an individual entrepreneur or work for a multinational corporation, building a Web site with no concrete goal in mind is a hobby that probably won't generate any profit. Yes, some sites that are now popular, and some that are profitable, began as hobbies, but most Internet businesses that were founded during the Age of Internet Euphoria (roughly 1994 2000) with high hopes and shaky business plans (or no business plans at all) are now either dead or on their way out. A very few, including eBay, Yahoo!, and Slashdot, that started out as part-time labors of love, are still alive and doing fine, but for every one of these there are thousands that never made a dime.

There is nothing wrong with creating a hobby or vanity Web site that isn't expected to make money. If that's what you want, go ahead and make it, but do it with your eyes open. Putting up a Web site and getting a lot of people to look at it is fun, but without a way to turn all those pageviews into more cash than it costs to run the site, you'll end up in the same pickle Disney got into with its first online operation. Remember their highly-touted Go.com that debuted in 1998? Millions of people used Go.com as it grew from a simple and highly-regarded search engine into a general-purpose Web portal that tried to compete with Yahoo!, Excite, and all the rest of those beasts even though Go.com had neither a clearly defined focus nor, apparently, any sensible plan to make money.

Early in 2001, the Disney Internet Group ceased operating as a separate business unit, laid off 400 employees, and forced its parent, The Walt Disney Company, to take a total write-off estimated at over $800 million. Talk about an expensive hobby!

Can you (or your company) afford to do as Disney did, even on a smaller scale? I didn't think so.

But that's enough generalities. Let's move on to the specifics of building a focused, user-friendly, profitable Web site.