10 Weird Ways Big Companies Make Money Online

There have 10 weird ways regarding how the big companies make a pool of money:

Groupon

How does Groupon Make Money?

Groupon features local daily deals around the world. Companies choose to set up a group coupon that Groupon sells for a day and keeps a percentage of the price of the coupon (usually around 50%).

The reason it works so well is because the deals are 50-95% off, they only last a day, and nobody gets their coupon if they don’t sell a predetermined number of coupons. So when people buy the coupon, they tell their friends to get it too. If they refer three people, they get the Groupon for free.

Airbnb

Started as “Air Mattress, Bed, and Breakfast,” Airbnb is an online service that matches people who want to rent out a room with vacationers who are looking for short-term rentals outside of the traditional hotel.

How does Airbnb Make Money?

Airbnb has been labeled as “among the next generation of multibillion dollar startups” by the New York Times. They charge travelers a 6-12% service fee and require hosts to pay a 3% fee for every booking through their site.

With this business model, Airbnb was valued at $1 billion in July 2011.

Zynga

How does Zynga Make Money?

Zynga makes money through people purchasing credits within their games and through partnership agreements with large companies.

Using FarmVille as an example, players use real money to purchase “Farm Cash” so they can progress in the game. FarmVille also conducted an ad campaign with McDonald’s where people could, for one day only, visit the McDonald’s farm, grow tomato and mustard seed crops, and earn McCafe Consumables so their farms would grow faster.

In March 2010, Zynga also started selling prepaid cards for virtual currency at more than 12,000 stores across the US. I remember seeing FarmVille gift cards at a 7-Eleven in downtown Denver and thinking, “there’s no way anyone would buy that…would they?” I was wrong.

Activision Blizzard

How does World of Warcraft Make Money?

Activision Blizzard makes money with WoW by charging $15 per month to play the game. They also sell physical discs and expansion packs. It’s the bloggers equivalent to a membership site with upgradable accounts.

A neat factor about their game, however, is that people can play the game, collect virtual gold, and sell their gold for real money.

People and companies, yes companies, make a full-time income doing just that. Then they sell their high-ranking profiles to people who want to skip the grunt work of running through the first portion of the game.

Edit: Thanks to Joey’s comment, I found that selling gold and profiles is strictly against WoW’s terms of use. We don’t endorse this practice but it’s interesting how it works.

Dropbox

How does Dropbox Make Money?

Dropbox operates under a freemium business model where people can get started for free, but pay for more space as they want to host more files.

Dropbox is expected to reach $100 million in revenue by the end of 2011.

99designs

99designs hosts graphic design contests where graphic designers compete to create logos for clients. As a result of these competitions, clients get to choose from an average of over 90 logos and only the winning designer gets paid.

How does 99designs Make Money?

Clients post logo and other design projects and pay upfront. Then designers submit their logos to the client. The client selects his favorite and the designer gets paid, minus a small fee that goes to 99designs.

UserTesting.com

UserTesting.com offers low cost usability testing experiments where you can hire their army of independent usability testers to look at your website and give you a detailed report on what they think.

How does UserTesting.com Make Money?

They typically charge $39 per usability test and they pay their testers $10 per test. So they keep $29 per test for setting up the systems and processes that make this previously daunting task simpler.

The beauty of this company is that they can hire anyone – in fact the less savvy the better – to perform these usability tests.

Woot!

How does Woot Make Money?

Much like Groupon, they use creative copywriting and limited-time offers to sell other company’s products on their homepage. Since they drop-ship these products, they don’t have to offer customer support or manage overhead like traditional companies. As you probably guessed, they get a cut of every sale.

In June 2010, Woot was acquired by Amazon for an undisclosed amount.

QuiBids

QuiBids offers a radical take on the long-established internet auctioning industry. People have reported receiving up to 95% off things like $3.52 Apple iPads and $1.07 Nike putters. The catch is that it costs you $0.60 to place a bid and you have no guarantee of winning the auction.

How does Quibids Make Money?

Some products receive upwards of 1500 bids which means QuiBids is taking home $900 in revenue just from people making the bids. But QuiBids claims that they maintain a 5-10% profit margin as a company because they end up losing money on 50% of the things they sell.

Any Lucky Day

Any Lucky Day is a smaller company that’s run by a young entrepreneur named Giancarlo Massaro. Similar to Woot, they profile a company-of-the-day. But instead of selling the company’s product, they hold a contest where they give the product away.

How does Any Lucky Day Make Money?

It costs a base price of $150 for a company to be featured on Any Lucky Day. They also offer a few upgraded options including publishing rights and a small listing for an extra $50 apiece.

Compared to traditional advertising like magazines and billboards, $150 is an incredible deal with seemingly more engagement because you have to visit the company’s website before you can enter the contest.