Issues in Web Hosting - Essay Example

The fixed costs of the company include web hosting, maintenance of servers and other information technology, and payroll expenses to its writers. The company incurs monthly marketing expenses to increase its web audience. Along with the writers the company has other labor overhead expenses it must pay to the administrators of the company.

Due to the vast amount of users which ranks in the millions of monthly customers providing the service to one additional person does not cost the company anything. For the marginal cost to manifest the company would have to evaluate an additional unit (person) in terms of clusters of tens of thousands of users. Utilizing such a metric would allow a cost to be determined based on the added cost of extra web hosting space.

The website utilizes online advertising offerings such as web banners and web links. When you search for a topic at the bottom of the article a web search portal will appear at the bottom with different related words. This search engine option represents an advertising revenue stream for the company. The website is not over-flooded with ads and the ones that are placed are located on the right-hand side, at the top, and the bottom so that the ads do not interfere with the reading content.

Entrepreneurs supply goods to the marketplace to make a profit from the sale of that goods. They may also supply the goods free of charge as a promotional campaign to build brand value for the company. A good can supply a good in the marketplace to test the product. In the case of About.com which works provides information services their incentive to provide such a product is based on building a large online community pool which creates value for the company in terms of advertising revenue. The company can sell online ads on its website because the 57 million monthly unique visitors are large crowds advertisers want to reach.