Six distinct ways of making money online (the way an online company makes money largely defines its business model)

1. Affiliate programs

An affiliate program is a way for online merchants, like 1-800-FLOWERS, to get more exposure by offering a commission to Web sites and blogs that are willing to feature ads for their products or services. The merchant pays the affiliate a small commission every time someone clicks on the ads and buys one of its products.

2. Pay-per-click programs

A Web site or blog allows an advertiser’s link to be placed on its site and gets paid a small commission every time someone clicks the ad. Examples include Google AdSense and Yahoo! Search Marketing. You’ve seen many Google AdSense ads. They are easy to spot because they have an emblem underneath that says “Ads by Google.”

3. Direct ads

These are banner ads, skyscraper ads (all ads that run along the side of a Web page), or ads with pictures embedded in the content of a Web site. Websites, blogs, and other online companies get paid for allowing these ads to be placed on their Web sites.

4. E-commerce

Direct sale of products online (i.e., Amazon.com, Dell.com). Online companies get paid directly by the individuals and businesses that buy their products.

5. Subscription services

These online companies provide services that have sufficient value that people in their niche market are willing to pay for on a yearly on monthly basis. For example, eHarmony charges an annual fee for access to its matchmaking service.

6. Freemium models 

These Web sites offer a basic service for free and offer premium services on tiered pricing plans. An example is SurveyMonkey, a service that allows users to create their own online surveys. The basic service (10 questions, 100 respondents) is free, the Select service is $17.00 per month (unlimited questions, unlimited respondents), and the Gold ($25.00 per month) and Platinum ($65.00 per month) plans offer additional features.