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Comment by boulderdash | Hacker News Reader

how does mibbit make money?

Advertising!

We keep telling him advertising doesn't work, but apparently he's breaking even already, so the evidence seems to be against us.

I recall axod saying he made revenue from the contextual text ads above irc rooms. They change depending on what the room is about/talking about so they are actually pretty relevant.

I am in the advertising biz, and I have a really hard time believing this.

What part do you not believe? :/

Hi - text ads are about end user conversion. Otherwise it is just click fraud. People clicking have to buy something in the end. I have a hard time believing that IRC channels have a good enough conversion to pay for bandwidth and salaries.

I'm seeing that this is a longer conversation, but consider this simple example. Facebook ad rates have dropped significantly from their early days. When people are communicating in an application (which is all Facebook really is), they are not in the mood to buy/convert. So, if you are receiving income, great, but I doubt it will be sustainable. Take a look at the ads you get and see if you get re-buys.

Anyways, please don't take this as harsh. This is probably one of the hardest problems for a publisher to solve. Twitter is just trying to figure it out right now.

I think Twitter has larger problems. They have an open API which leaves little room to monetize.

"People clicking have to buy something in the end"

That's never been true. You have ads for brand awareness, signups, ad arbitrage, etc etc.

I believe the ads above GMail are pretty lucrative... also people on webchat are often trying to buy something.

  >> "Hey, what book should I get to learn javascript"
  >> "Hi what's a good webhost"

And that's not including the massive areas of non-tech IRC communities.

"Anyways, please don't take this as harsh."

hehe it's ok, I've been making money off online advertising since 1999. I'm 90% sure I know what I'm doing ;)

I didn't know you could use Adsense for such real-time dynamic content on a webpage. Doesn't the G crawler have to come around and index a webpage n hours later?

Oh yeah, I forgot to mention. I know about the GMail ads from Google's internal point of view. They wish they were as lucrative as you think.

Care to share more? I would love to know how much money they are making.

Well, I don't have the exact numbers... but the main message was that the revenue in comparison to other ad channels was insignificant (!).

This is hardly surprising given the massive scale of adsense (content and search networks).

It doesn't mean it's not a large absolute number though.

It is not a large number, and they do have a lot of inventory. The ads are just not as effective. Also, 3rd parties (aka you and me) do not get these ads, nor would we get the great pricing that google does.

So, to be clear, this is the fringe.

Ah - twitter raised $30+ million.. Is that is what you mean by larger problems :-)

Regarding CPC. People have to buy something is the VAST majority of the txt ad market. There is near ZERO brand awareness in that market. If an advertiser is buying txt ads on IRC and hoping for conversion, I would be really, really surprised that they re-buy. (aka - you are getting filled by a network)

Your example text tells me how you are really getting revenue. You are using context for affiliate deals. That actually might be viable.

Re: since 1999... cool, what sites were you involved with before?

>> "Ah - twitter raised $30+ million.. Is that is what you mean by larger problems :-)"

Sure, that's a pretty risky position to be in IMHO. Now they either have to suddenly be insanely profitable, or get bought for a lot, or raise more money. You have to have balls of steel to play that game.

Boulder, since Mibbit is using Adsense to serve ads, he should always have some ads showing up for whatever keyword the chat room is talking about, simply because Adsense ads are generally keyword targeted. An advertiser would have to specifically exclude Mibbit.com from showing their ads in their Adwords account, and they would only do that if they are wasting their money on Mibbit.com

But the fact is, Mibbit has been around for a while, and it is STILL serving text ads from Google - no exclusion.

I think axod should work on selling display advertising directly.

so axod - which sites were you rocking since 99? :-)

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