How online companies make money — The internet economy — PT1

A lot of times I have conversations with people, and they have always insinuated or assumed that the moment you have a website you are making money, and this is false! Others just tell me the data they subscribe for are used to pay those websites when they visit them. This is also false!

As a matter of fact, someone actually said, he usually refuses to open some web links because he doesn’t want to give them “his” money. That was quite funny. And of course, I laughed 😂. The other day, a colleague was surprised to learn that we paid Google to increase the disk size of one of the company’s staff when it got filled up. He said all the while he’s been wondering how Google makes money. He thought it was “Free”, so I had to explain how it works, which is what I will do briefly in this post.

I’d try to describe and explain in simple terms how money flow on the internet, as it relates to internet companies. In other words, this post assumes everyone in the IT industry understands this concept already.

First of all, for anyone with a smart device, — say mobile phone or laptop, to access the internet, they need to subscribe to a data plan. This service is provided by companies known as internet service providers. For example MTN, Airtel, 9mobile, Orange, etc.

This data plan could be capped at any size (500MB, 1Gb etc) depending on how much you pay. Now supposing you purchase a data plan of 1GB per month, the money goes to your service provider. And that’s regarded as an income for them, because — of course, It’s their money!

Hence, each time you visit any website and depending on the site you visit, your remaining data size depletes. For example, you will consume more data when you visit an e-commerce website or a site like Instagram than when you visit a site like Nairaland/Quora. This is because for any web page on the internet to be displayed on a browser, it has to be downloaded. But because your device needs to download the images other users have posted on Instagram for you to view them, it consumes more data than Nairaland which is basically just texts.

In other words, how you choose to use your data plan is up to you, your internet service provider has no business with it. They’ve collected their money, you’re the one using your data. Your choice!

The websites you visited, have not and would probably not make any money from your visit to their platform except they provide a VALUE/SERVICE to their you, and other visitors of their website.

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Oluwatosin Olubiyi

Oluwatosin Olubiyi

Pronoun: He/Him. Backend Engineer. Passionate about building data-driven and interactive products.