May 5, 2013

Possibly Profitable

Now that I’ve had ads up on my webapps page for a few days now I thought it’s time to analyze the numbers. I assumed the amount of revenue earned each day fallows a normal distribution. (Actually, this is an over simplification that makes the math easier. I’m sure there’s weekly patterns at a minimum, and possibly seasonal factors as well. And really, it should probably be a mixture of Gaussians for each component – revenue from views and revenue from clicks with a hyper parameter of views but I digress…)

My model shows I have a 55% probability of earning at least $100 in a year with a $118 being the expected value.

Not bad for two scripts I basically wrote in my spare time. But not great either. It if was an order of magnitude higher, I’d have great confidence that I could start my own business. With time an energy I could probably turn my webapps into something substantial. On the other hand, if it was an order of magnitude smaller this path wouldn’t seem viable at all.

Of course, it would be possible for me to earn more if I cut out the middle man. Google takes a cut of 32%. Thus if I’m earning $118, Google’s cut is $56, and the total revenue generated from ads on my webapps is $174. This tells me I could charge $14/mo for ad space. Of course, then I’d have to find advertisers and convince them that my webapps are worth it. No, the cut Google takes is worth it.

On the job front, I did find a local data scientist job to apply for. It’s not the same data I’m used to, but I’d love to branch out. Domingo and I have often joked how at home I’d be in a “Black Friday war room”, analyzing real time shopping data. So why try consider something new?

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