The State of Things
By Will Stewart, TechSideline.com, 12/15/00
No, this isn't an article about Virginia Tech football or basketball. It's an article about TechSideline.com. Where we are, and where we're going. It's unusual for a business to be as open about its operations as I'm about to be, but the relationship between TSL and its readers has always been very unique. Together, we are more of a community, rather than a traditional business-customer relationship.
It has been an interesting and exciting sixteen months here are TechSideline.com/HokieCentral.com. Most of you know the drill: from March of 1996 until August of 1999, I ran TSL as a hobby site in my spare time, but in the summer of 1999, a company came along and invested in TSL, enabling me to go full-time with the web site. That was just in time, too, because the web site got very busy during the 1999 football season, and it has been a full-time job ever since.
Lately, particularly at the TSL tailgate on October 28th, I have been asked a certain question quite a bit. Namely, a number of people have wondered, "How do you make money on the web site?" Sometimes the question is asked out of general curiosity, but more often than not, the question comes up because the person who asks it really likes the web site and wants to know how, and if, it's going to survive.
Well, I guess it's time to explain all that. Many of you are savvy to TSL, how it works, and how it supports itself, but many of you may not be, and I think it's important for you to know.
It's important for you to know because dot-com's are biting the dust left and right in a spectacular flaming display of failed businesses, poor business plans, and blown investments. Hundreds of millions of dollars have gone down the drain, funneled into ill-fated sites such as Pets.com (where the URL has been purchased by PetSmart.com and is now redirected to their site). Even Internet stalwarts such as Priceline.com are taking big hits, canceling strategies and laying off workers as they pull back, downsize, or go under completely.
That's fine and dandy. You can get your cat food at the grocery store, so if Pets.com implodes, it's no big deal, right? But TSL is different -- you can't just go to Wal-Mart and find what TSL offers. And you guys know it. I can't count how many times I've heard people say, "I don't know what I'd do without your web site!" The implication is clear: many of you will do what it takes to keep the web site going, because you love it and it's part of your daily life. I am constantly amazed and always grateful for that.
I can tell you that for the last sixteen months or so, since TSL went full time, we've spent our time trying out different things, learning about the industry, and figuring out how we should structure our web site to (a) please Hokie fans and (b) be a profitable business. Both of those are important, and they both feed off of each other.
We've learned quite a bit and have taken a few false steps along the way. I won't bore you with the details, but after much pontificating and planning, we've come to some conclusions and have set ourselves up into a model that we think will be successful, both for us and for you.
The biggest thing we have learned is that running one of these web sites is expensive. Holy cow, is it expensive. Start with hosting costs, throw in some programming, accounting, legal expenses, and my salary (a meager pittance which allows me to buy as much macaroni and cheese -- the powdered kind, not the creamy deluxe kind -- as one human being can eat), and before you can open up your check book, the idea of running one of these sites on less than a six-figure budget is a distant memory.
There's a perception that running a web site is a cheap endeavor, but I can tell you from first-hand experience that that's not true, not if you want to run one correctly. This isn't like when I used to run it as a hobby, and my only expenses were $100 a month for web hosting fees and $20 a month for a dial-up Internet account. No, this is big-time stuff. TSL has grown immensely over the years, and it's impossible to run it on the cheap like that anymore. Any setup that costs just $100 a month would crash within ten minutes under the weight of TSL's traffic.
The second thing we learned is that advertising -- the banner and button ads that you see running on the message board and on the main part of the site -- does not even come close to covering costs. Let me repeat that: not even close. If you have a big in-house ad sales force like ESPN.com, USAToday.com, et al, you can sell hard and get some good money for advertising, but TSL isn't built that way.
We don't have the national clout that those web sites have, so we farm our ad sales out to a third-party ad server. They sell the ads and send us codes that we embed in our pages, and those codes retrieve ads from their servers and show them on our pages. It's easy and efficient for us, but it doesn't pay squat. Internet advertising has quite a bit of ways to go before even a heavy-traffic site like TSL can make good money by serving up ads from a third-party server.
(By the way, we've discovered that those pop-up ads that everyone finds so distracting, and that you see on other web sites, pay way more than banner and button ads, so don't be surprised if they show up here some time soon. There's a reason you see them everywhere -- they're effective advertising, and they pay well.)
So we have to come up with other ways to make money. In the industry, they call that "monetizing the traffic," but I prefer to think of it as offering up more things for our visitors to buy that they will find entertaining, beneficial, or of value. What we don't do, for instance, is sell our customer lists. We could make good money doing that, but our visitors wouldn't necessarily find that entertaining, beneficial or of value, unless you like junk mail, spam email, and phone solicitations.
Which is why we offer TechLocker.com and the TSL Extra, instead. Because in both cases, you can pay for something, and in return, get something of value.
TechLocker.com speaks for itself. It's an on-line store full of Hokie apparel and gift items, and profits made by TechLocker help keep TechSideline.com going. We opened TechLocker just over a year ago, and those who have shopped there have been very pleased with the quality offerings and the delivery times, which will blow your hat off your head. With your support, TechLocker will continue to improve its service and selection -- success begets success.
(And there's still plenty of time to stop by and get your Christmas shopping done at TechLocker, hint-hint!)
Then there's the TSL Extra, our monthly subscription-based supplement. It costs $24.95 per year and is full of in-depth articles that add to your understanding and enjoyment of Hokie sports. We promote TSLX as a look "outside the lines" of Hokie sports, but it includes lots of analysis and commentary on what goes on between the lines, too.
The point I'm making is this: we've put over a year of thought and planning into structuring TechSideline.com the way it is set up, with the banner ads, the store, and the TSL Extra. And along the way, we have beefed up content, with lots of articles, specialized message boards, and even a new recruiting database. We're ready to rock and roll, and we think that the way we've got the web site set up is the way you want it, including a full-time staff (me). I monitor the message boards and do everything I can to bring you the latest news as soon as it breaks.
But as I mentioned, it's pricey to run it this way, and thatís where you come in. Most of you spend hundreds and often thousands of dollars a year on Hokie Club donations, game tickets, travel, and subscriptions. We're asking you to fit TechSideline.com under your umbrella of Hokie sports support, by visiting the site often, shopping at TechLocker.com, and subscribing to the TSL Extra. If you can do all three, great. If not, do what you can afford and are willing to do. And as always, let us know if you are (or aren't) satisfied, so we can improve the site and the store.
We think this is a sound way to run things, and with your support, we can keep running them this way until we're all old and gray, and the Internet is ancient technology. I love where we've been, and I love where we're going. If you do too, then help us keep this thing on track.
If you're interested in learning more about the real challenges facing Internet businesses today, instead of the publicly perceived state of things, then take a look at this article from TheStreet.com, in particular the section titled "The 10 Biggest Internet Myths." It will open your eyes.
Will Stewart is the founder and General Manager ofTechSideline.com. He writes the News and Notes section, game previews, and game reports for TSL, and generally runs the place with his prodigious and productive brain.