I am a tech enthusiast myself, and I follow online privacy-related news closely.
Have you ever wondered how does the internet works? how companies like Facebook, Google, and many more are able to provide their services for free? Ever wondered why do social media influencers and YouTubers do what they do online?
It’s high time that we start to understand how the internet works and whats keeps it going instead of just simply using it without putting our minds into the thought that how these things work.
This will not only make us knowledgeable about the economics of the internet but will also help us understand how things work in the background and will also help us to understand, what kind of sites and contents we should support from a good digital privacy perspective.
Going to the website side of things, one always thinks that how do these internet websites keep their lights up when they are providing their service for free?
The simple answer is investments. As an internet startup, one must keep in mind that for fundings, one has to get investors on board, especially when you think about scaling your company. Investors, generally are much more interested in the aspect of making money more than what they put into a business, so the philosophy of your company or what your company is trying to solve that you and many others see as an issue, doesn't matter to them.
It is understandable from their point of view but, it's where many new and upcoming companies give in, just for gaining the required funds to get their company off the ground, many a times the entrepreneurs end up going with the investors who don't have the same vision as them but the idea and the ability to make money is what matters for them.
Generally, most investors are interested in the idea of what the entrepreneurs bring to them and if it has a place in the market or not, can it grow in the future or not, and the ability or the assumption of the cash it can make them.
This is where internet-based companies struggle the most, most of the time the company either thinks of providing a subscription-based model or a so-called free service.
The subscription-based model is self-explanatory, an internet-based company providing its services on a monthly payment basis. But it is the so-called free services websites that get into a bit of a shady zone. These websites offer their services for free and in return show you ads that are based on your searches. The way they do it is a topic for some other time.
Role of Content Creators and Users:
It is easy to question that, how do content creators and other users of the internet play a role in steering the economy of the internet. But in contrast, it is very easy to explain.
The way any business works or sustains itself, let alone making profits is when there is a demand for the product the company is making. If there is no demand, there is no money to be made.
Just like a zoo is open for business only when people come to visit it, it's the same way for the internet. The internet is only functional and makes money when people like you and me keep on visiting our favorite sites.
To make people come for more, these internet sites need content, whether it be images, articles, videos, a job offer, a freelance job, or a simple meme. To make the content creators and job seekers and many more users keep doing their own thing, these companies incentivize people, usually in the form of money to keep churning out the content.
Sites like Youtube and Facebook have their partner programs where they share a percentage of the money they make from the ads they run on the page where they host your content. For writers, it's usually their blogs or some sites like HubPages which also has their partner program where they run the ads on your articles. Some sites like Upwork, Freelance.com also have their own program where they let you post your ads for making money doing freelance work and then take a share. Sites like Amazon offer third-party sellers a way to sell their products to the world and then take a share of it.
There are tons of such programs that help make these sites some extraordinary amounts of cash with sometimes little to no amount of work.
Then comes sponsors which is a topic for some other time.
The money that keeps the internet running is something that comes from so many sources, like subscriptions and sometimes some big company gives it for running ads, and it's this money that gets distributed to others, like content creators and site maintenance and for the engineers behind the whole show and so many more that we can't even imagine.
At the end of the day, it is this money that keeps on circulating and provides sustenance to the business and many people depending on it, which ultimately provides to the economy of the country and in some way or the other reaches back to the source company.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
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