Normalkid:Arnold Kim

The secret to success on the internet can be boiled down to one simple accomplishment: building traffic.

That’s it. If you have a site that attracts a lot of visitors, you will be able to make money. On the internet, traffic equals power, which subsequently equals money.

Depending on the topic of your site, however, it may be easier and harder to generate that money. But even a seemingly ridiculous site such as HotorNot.com has a revenue of $5-$10 million a year (with the bulk of it being profit). If you aren’t familiar with the site, the premise is simple: rate other users on how “hot” they are on a scale of 1 to 10. That’s it. You vote, and get sent to the next photo. When I first saw it, I thought it was amusing but saw no way they could make money from it. As it turns out, they managed to turn it into a casual dating site with a simple subscription service that allowed you to make connections. This simple $6/month revenue stream added up to a revenue stream of up to $10 million a year,

Now, generating revenue might not be enough if your expenses are high. One notable site that has never made a profit is YouTube. To be fair, I don’t think generating a steady profit was part of the original game plan. As a venture capital funded site, millions of dollars were invested in the infrastructure, employees and bandwidth to create what became a “killer app” for the Internet. In the end, the founders and investors did make an enormous profit on the site through its sale to Google for $1.6 billion dollars. Why did Google pay $1.6 billion to buy a site that has never made a profit? Because Google understands more than anyone the value of traffic, and truly believes that traffic = power = money.

As the founder of a well trafficked site, and with plans to establish other sites, the concept of building traffic is always on my mind. I have ideas of how other sites established their user base, but here are a few reasons MacRumors has grown to be as popular as it has:

- Good domain - I was fortunate to be able to pick up “MacRumors.com” as an expired domain in 2000. It’s a generic keyword-rich domain which perfectly encapsulates the topic of the site. It’s easy to remember, and well ranked in searches related to rumors.

- Addictive Content - it’s no coincidence that I started a web site surrounding rumors about Apple and the Mac. I was already an addict. I scoured messageboards and news sites around the web for hints about future Apple products. I don’t expect everyone to understand how this particular topic is as addictive as it is… but clearly it’s not just me.

- Little Competition - We weren’t the first rumor site on the scene. But what was interesting was that there used to be a clear divide between rumor sites and news sites in the Mac web. “News sites” would not report on rumors. They purposefully ignored the entire subcommunity. That seems ridiculous now, as the lines have since blurred, with even mainstream media covering Apple rumors. But I’d say that gave us a 4 year head start over other Mac sites. They weren’t willing to cater to the rumor-audience, so MacRumors was one of only a few rumor destinations for those intervening years.

I’ve owned an Apple computer since the age of 12 or so. My first Apple was an Apple //c. I later moved on to the Apple //gs, a Mac IIsi, PowerMac 7500 and so on. I’m presently on a Mac Pro Quad Xeon.

During those 20 or so years, one thing has remained pretty constant… Apple has had very little interest in encouraging game development on their platforms. I can’t find any original references, but there’s an underlying belief that Steve Jobs hates games. Whether or not that’s true… that’s how Apple has acted over the years. Even to my then teenage mind, it seemed crazy that Apple would actively discourage such a popular use of their computers.

All that may have changed with the introduction of the iPhone and iPod Touch SDK. At the launch event, Apple invited Electronic Arts and SEGA to demonstrate their latest games running on the iPhone and iPod Touch… could it be that Apple has finally changed their attitude?

It seems so… but even without Apple’s blessing, I believe the iPhone and iPod Touch will become a huge gaming platform. The potential market is just too large and the desire for casual gaming on your mobile phone is just too great. By the end of 2008, Apple expects to have seeded at least 10 million iPhones to the world.

Everyone finds themselves in situations where they are just killing time and all they have is their mobile phone. Text messaging, browsing the web, and playing the latest iPhone game are the activities that people will increasingly turn to.

Based on this belief, Blake Patterson and I have launched a new site catering to those interested in gaming on the iPhone and iPod Touch.

We’ve been filling out content and formatting over the past few weeks. News stories will obviously pick up after the official launch of the iPhone SDK in June, so we have just been ramping it up in the meanwhile. I can’t be certain what the future holds, but I believe this site addresses a very loyal and expanding topic of interest.

Last year, I wrote an article about how Digitime’s accuracy with relation to Apple-related rumors had been very poor. It based on their historic results at the time. Things have changed considerably, however, and I try to give credit where credit is due.

Over the past year, Digitime’s accuracy has been remarkably good with respect to Apple related rumors, and I now pay close attention to their reports. All the following reports turned out to be true:

Leopard Delayed
LED Apple Notebooks
Wifi/Flash iPod
13.3″ Screens for upcoming Apple Laptop (ended up being the Air)
September iPods

So, good job Digitimes…

As MacRumors editor, I read a lot of random articles…. and one of the most frustrating things is finding what sounds like a good relevant article… which at first glance seems fine, in the end, doesn’t quite make sense.

Here’s one I found yesterday:

Why Apple’s secretive approach is so effective - some researchers studied the effects of pre-announcing and not pre-announcing products and how that affected consumer spending.

It’s this pre-release hype makes people much more careful about what they buy. If you tell them that something is coming at some point in the future, they will evaluate everything that’s out there very carefully. But if you just drop something into their laps, all they’ll think about is the brand. And if they like that, ker-ching!

To sum up:

Pre-release announcement = more cautious buying habits
Immediate release = impulse buying

The article presumes that Apple takes advantage of this psychological tendency. The problem lies in the exact definition of “immediate release”. The research article isn’t published yet, so we have to rely on a press release.

If you define “immediate release” as actually available in stores (to see and touch), then Apple’s brand new products rarely fall in this category. Apple TV, Apple TV 2.0, iPhone, MacBook Air all had week to month lead times before they were available. The iPhone, itself, was 6 months from release, and no pre-orders were possible.

So how does this help prove the author’s point? I don’t think it does at all.

Now if you redefine “immediate release” to “can preorder immediately”, then an argument can be made for the MacBook Air. Apple announced the Air, and you could impulsively buy it, without doing research. Ok sure…

But what about Apple TV? The original one (codenamed iTV) was pre-announced months in advance, even before it adopted the “Apple TV” name. So, this would argue that Apple suffered (not benefited) from this pre-announce strategy.

What about the iPhone? Apple pre-announced the iPhone on January 9, 2007. No pre-orders were available and it wasn’t available until June 2007.

It was a nice theory, with some actual research to back it up, but in the end Apple’s “secretive approach” seems to have no correlation with this research.