Have you ever wondered what the most profitable internet application is?

Web hosting? Book or CD selling? Merchant account providers?

You may be surprised to learn that it is none of the above although they can all be profitable in their own right (particularly industry leaders such as Amazon and Paypal). Why did I choose the above examples?

Because they are perceived to be ideally suited to online marketing and the fact that there are so many offering those very same products/services means they have to be profitable, right? Wrong!

The problem with the above examples and for merchants in general are that for the vast majority it is just too competitive to succeed online without viable offline sales channels as well.

Without any shadow of a doubt, the most profitable of all internet applications are those that provide exchange services. That is the single most important ingredient to any online success story. The reason is simple, they match buyers and sellers of a myriad of wants and needs. Economically speaking, they match supply and demand.

Lets look at some examples.

Perhaps the most obvious success story is Ebay - an online auction service that matches buyers and sellers for an unrestricted choice of product. Other good examples are search engines like Google and Yahoo which match information demand with supply.

Another biggie is MSN messenger which matches communication desires between friends (although they face stiff opposition from mobile phones in the offline world).

And I don't want to elaborate on the hugely successful marriage of pornographic sites to the demand for sexual fantasy.

High usage demand for these exchange services means huge exposure and advertising revenue in addition to any actual cost of using the service itself.

Many wise heads have identified the huge profit potential of online exchange services. Online dating, gambling, school reunion, broking (share and real estate), affiliate networking, and even customer acquisition exchange websites all utilise the exchange application.

The trick is to go out and find a niche exchange service, one that hasn't already got 10,000,000 search listings for it. If you can be one of the first to develop and market a new exchange service then watch out - your profits will be about to soar!

About the Author
Michael Lever is a co-founder and CEO of SpinningTornado.com, an independent company offering unbiased tools and services to help affiliate and network marketers build profitable online businesses. http://www.SpinningTornado.com Partnering affiliates the world over.