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By Mark Gimein [08/27/99] Column Is the Web "contracting"? The numbers show a bigger slice for the top sites -- but most of the pie remains in the hands of the little guys. By Scott Rosenberg [08/26/99] Silicon Follies Silicon Follies Chapter 47: The contractor's contractor -- migrant labor on steroids By Thomas Scoville [08/25/99] Complete archives for Technology - - - - - - - - - - - - - - - - - - - - - - - - Technology by e-mail Sign up here to receive our weekly e-mail newsletter listing recent and upcoming articles and events in Technology. Unsubscribe - - - - - - - - - - - -		Click here to make me rich \| page 1, 2, 3 OK, that's a little far-fetched -- but not as far as you may think. Last year, the top affiliate at the Internet personals site One & Only -- a guy identified only as Jeff from New Jersey -- pulled in $11,266.90. I know this because unlike most sites, One & Only posts the revenues of its top earners to encourage other webmasters to sign on. Learning that some guy earned $11,000 by posting a few links is really, really not healthy for me (maybe it was his only income). Nor was it healthy to spend time exploring a breathless site like that created by Declan Dunn, author of a $97 book and $40 audio tape set called "Winning the Affiliate Game," which he sells using an affiliate program. Dunn promises "obscene" profits (what other kind are there?) without working hard at all. His site reads like a late-night infomercial, but he obviously knows his audience. Who wouldn't be intrigued by the happy customer who says he created a cybermall of affiliate links that brought in "$35,000 our first month, $60,000 our second month and $100,000 our third month"!? As if to drive the point home, the testimonial is accompanied by a photograph of the obscenely rich webmaster and his wife on their living room couch, demonstrating the art of doing nothing, while presumably, in the background, the cash rolls in. The promise of easy money is what drives webmasters to sign up in droves with the hungry merchants who have followed Amazon's lead. It sure hooked me. Refer-It, a directory of affiliate programs, currently lists more than 860, and those are just the ones that webmaster James Marciano doesn't consider "schlocky" or outright scams. You can partner to sell T-shirts, home videos, construction contracts, horoscopes, the "Hooked on Phonics" reading program, cameras, stock newsletters, flowers, wine, pornography, computers, vitamins, office supplies, furniture, dog toys, bikes, Y2K kits and filtration systems for the coming "water crisis." (The latter may be the first affiliate program to have a celebrity spokesman -- Pat Boone! You know that water is clean.) Marciano says he receives about 50 applications per week from merchants looking for affiliates. Network sites such as LinkShare, beFree and Direct Leads make it even easier for webmasters to sign up: Enter your mailing address and site address and click, click, click, join dozens of programs in a matter of minutes. For the affiliate addict, this is the equivalent of giving a smoker free cigarettes. I know why I joined so many affiliate programs -- for the money -- but what's in it for Amazon or any other online business? The simple answer is that an affiliate program has the potential to create an instant, low-cost sales and marketing force. But the market research firm Jupiter Communications has calculated that affiliate sales last year accounted for 11 percent of the $5.7 billion in online consumer transactions (excluding business-to-business and auto sales). By 2002, that figure is expected to grow to 24 percent of $37.5 billion. That's a lot of dough. Presumably it must pain many online merchants, who are mostly profitless, to rebate a quarter of their revenues. I phoned Evan Schwartz, who has his own affiliate program to promote "Digital Darwinism," (I joined -- couldn't help it), to find out why affiliate programs are so popular. He explained that what pains merchants more than sharing their profits after a sale is sharing their profits without a sale. Using banner ads, which require payment in advance and don't guarantee traffic or sales, online merchants spend an average of $30 or more to attract each new customer. (Online marketers who use traditional media, such as television, might pay more than $100 to acquire a new customer.) Amazon, by contrast, might pay $2 to $5 in commission to an affiliate for a first-time sale, plus the cost of administering the program, much of which is automated. This new customer isn't likely to use the affiliate link for his or her next purchase; he'll go directly to the bookseller's site. So the commission is likely to be a one-time fee. At CDNow, about 80 percent of customers acquired through affiliates return directly to the music retailer for subsequent purchases. Next page \| What do you mean more's not better when it comes to links?


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