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  1. #1
    SitePoint Zealot
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    How do they do it?!

    Can some more established web veterans explain how sites like the following:

    http://www.megaupload.com/
    http://www.rapidshare.com/
    http://www.flickr.com/

    Are able to make a profit?

    Megaupload for example has 1.5 million uniques per day, and a maximum upload limit of 500MB per file. How in the world do they make this work in their favor?

    It seems that the best idea sites lose to the sites with better business skills backing them.

    From my limited experience, development is an ongoing thing sucking every penny to continue with, and then the server management bandwidth issue is another beast in itself.

    I would really appreciate some Harvard type case studies for what it takes to make a site like those 3 above, and most importantly, make it profitable.

    What are all your thoughts?

    Anywhere I can seek more information?

  2. #2
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    Quote Originally Posted by xposed View Post
    Megaupload for example has 1.5 million uniques per day, and a maximum upload limit of 500MB per file. How in the world do they make this work in their favor?
    Google Adsense.

  3. #3
    SitePoint Evangelist
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    Also these companies are getting funds from few profit making top companies from back door. Once they have enough users they start making money by selling service contracts to users.

  4. #4
    Follow Me On Twitter: @djg gold trophysilver trophybronze trophy Dan Grossman's Avatar
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    Quote Originally Posted by xposed View Post
    Megaupload for example has 1.5 million uniques per day, and a maximum upload limit of 500MB per file. How in the world do they make this work in their favor?
    Hard drives cost nothing. When your ad revenue is in the tens of thousands a month, which it should be for these sites considering their ad placement, ad saturation and traffic levels, they can definitely afford an OC-3 or two for the bandwidth.

    As long as the ad revenue keeps coming in they'll make a profit.

  5. #5
    SitePoint Zealot
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    Arn't there case studies for how some of these sites made it to number one?

    Kinda like a case study for how walmart operates, how mccdonalds was built, etc..

  6. #6
    SitePoint Zealot codescribbler's Avatar
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    As an MBA at a top 20 school that relies heavily on Harvard cases, I can tell you that no, there are not many cases about this sort of thing. The closest I've seen is the launch of Gmail and of iPod.

    Sadly, the people who write these cases are not often tuned in to the latest trends online; worse, they often do not recognize the potential impact these trends could have on business at large.

  7. #7
    SitePoint Zealot
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    Codescribbler,

    What do you mean, the trends? I think I understand but I'd like your elaboration.

  8. #8
    SitePoint Guru Lars-Christian's Avatar
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    I think the business model of sites like these is pretty obvious if you take a look at Flickr. They start out being a great service (which Flickr most definately is), and then as they grow enough popularity they start charging for premium services. Flickr these days is more or less useless without a Pro account, at least in my opinion.

    I still think Yahoo is earning money like grass on it though, considering its immense popularity. Of course they also get more registered users into their system, which they can obviously use to their advantage as well.

    Of course, not all sites that experience with this business model are as much of a success story as Flickr. There are probably hundreds of failed projects for each successful one.


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