DIY: how to make money on free website Builder

One of the founders of the company Evgeny Kurt, uCoz

Going to the people

In the early 2000s, Russian Evgeny Kurt, Ukrainians Andriy and Vladimir Yuriy Yevtukhov interested in the hosting service Narod.ru launched in 2000, the shareholders of “Yandex”. The service allowed ordinary people to create free websites and post them on the Internet. Programmers Vladimirtsev Evtukhov and then worked on the development of voting services, and guest books for web portals, and a graduate of the law school, Kurt ran his own online store. Young people met on one of the Internet forums, web masters and began to discuss whatever business they create. “At some point it became clear that for the layperson to solve the problem “I want my site in the Runet not so easy, and the number of such people is growing”, — says Kurt. The same page on Narod.ru differed primitive design and a minimum of options to create a site that required programming skills, and the entrepreneurs decided to create something more comfortable, beautiful and same free.

The first investments into the platform with website Builder amounted to several thousand dollars. Young people used their own computers and do without office, the only thing they had to spend, was the server — its price was then $3-4 thousand, “the First server does not fit in the rack, and we had it with a hacksaw, rasp, it was a true startup story, although at the time these words we do not know”, — says Evgeny Kurt. Of additional costs at the start of Kurt notes only the cost of advertising and design, dealt with freelance designers.

The project started in 2005. Entrepreneurs chose the name uCoz — domain of the four letters they were able to purchase for just $10. However, a few years after that they often asked what they have to do to bankrotira at that moment NK “YUKOS”.

“After six months of life have appeared uCoz 100 thousand active users who have created their own websites. At present it seems to be a bit, but the size of the Internet were different,” recalls Kurt. Earned uCoz on advertising, which is placed on the pages of users. The first profit from the project has shown in just six months, but costs were minimal — entrepreneurs worked together.

Market designers

Code for any site you can write from scratch, but you can use a ready engine or a content management system (CMS, Content Management System). Only the Russian developers have created a total of more than 300 designers of sites that you can use for free or for money.

The most popular cloud-based CMS platforms — WordPress and Joomla! — distributed free of charge. Community of programmers around the world create software with open source and put it on the Internet. But the functionality of such systems is limited, and tech support nobody provides. Large online store is unlikely to use a free system unlike a freelancer designer, which to pay for the “engine” there is no need.

The undisputed leader in Russia among the commercial systems sold for money, — “1 C-Bitrix”. On this system, according to the “Rating Runet-2015” runs almost 14 thousand sites, in second place — UMI CMS, the third — NetCat. But the “Rating Runet” considers data from agencies which have been creating websites, uCoz is designed for ordinary users, non-professionals, it’s a different segment, so it is not included in the “Runet Rating”, says chief editor of the CMS Magazine, Anatoly Denisov.

A recent study of the “Amateur” market of CMS was carried out by the company Setup.ru two years ago. Turned out that the market is “Amateur” sites uCoz is the undisputed leader of: just based on it was created more than 20 million pages (of which were active about 1 million), on separate domains were 54 thousand sites. “It is the oldest and largest designer in Runet,” says Denisov.

Unwanted sites

In 2007, the project uCoz caught the attention of one of the most well-known Russian Internet investor, co-owner Mail.Ru Group Yuri Milner. His Fund DST Group for $1.5 million acquired 26% stake in the company. Appeared English, German and even Romanian version designers. “In the period of investment, our company is completely gone in the negative,” recalls Kurt. — If it pays for itself, then in 2008-2009 we began to actively invest in the development of the product”.

The crisis of 2008 played the project at hand, says Kurt. “If people could find $200 and take them to the Studio, so he made a website, now these people started coming to us and create sites on their own.”

By 2010, the number of user-generated active pages has exceeded 1 million, but the company rested on the ceiling. Firstly, uCoz has a lot of competitors — A5, Fo, Setup, Wix, and secondly, according to Kurt, the fashion for site building “your hands” was held. “The average lifespan of a website is two years. Since 2010, we began to witness the withering away of individual sites,” said Kurt. The market largely killed the social network, which then rapidly gaining popularity, why would a person create a personal website to promote it, if you simply start an account in “Vkontakte” or Facebook, says chief editor of the CMS Magazine, Anatoly Denisov.

Moreover, in 2011, Andrey Vladimir (he then took the surname Kroner) and Yuriy Yevtukhov has shifted to developing a new project — a private social network uNet, which eventually did not become popular. “The problem was that they left not immediately, but within the company continued to develop its new product,” said Kurt. In 2014, their stake in uCoz sold Kron, Evtukhov and Mail.Ru Group (s in 2010, transferred its share of DST). In Mail.Ru Group declined to comment, Kron did not respond to a request RBC, with Evtuhova could not be reached.

According to SPARK, is now 100% shares of “yukoz media” belongs to the offshore company “Composit limited from the British virgin Islands. According to Kurt, he’s not the only shareholder, but his new partners, he refused to name.

By the early 2010s was disappointed in the designers of sites and in “Yandex”. In February 2013, the representatives of the search engine suggested uCoz to pick up all the base sites of the service “Yandex.People” (about 1 million). Kurt refused. The press service of “Yandex” then reported that the transaction was not cash — “Y. the People” had to develop, and the company didn’t want to deal with this asset. uCoz received an additional 1 million sites, but to earn them could be hard.

Photo: Vladislav Shatilo/RBC

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Photo: Vladislav Shatilo/RBC

uCoz in numbers

100 thousand active users came from uCoz six months after launch

$1.5 million was invested by DST Group in uCoz

2 years is the average lifespan of a website

161 people work in uCoz in 2016

In 5 cities the company has opened offices in Moscow, St.-Petersburg, Rostov-on-don and the Ukrainian city of Cherkassy

116 “combat” servers from uCoz that is home to sites and system, $5 million — the average price of a single server

$7 — the size of the average check user website with uCoz

60% of revenue uCoz account for user payments

Company data

Total monetization

Difficulties with monetization is a key challenge free designers sites. First uCoz earn on advertising, which is placed on the pages of its users. Then he began to take money from those who wanted to post their ads, not the one that supplied the partners uCoz. But this model is allowed only at the minimum cost.

The company now has 116 servers (each of which costs $5 thousand), the staff has grown to 160 employees, offices in Moscow, St.-Petersburg, Rostov-on-don and the Ukrainian Cherkasy. Most of the spending goes to PAYROLL — approximately 60%, 10% on equipment, 30% — marketing and PR For the business growth, the company began to teeter on the brink of profitability. For example, according to SPARK, in 2012, “yukoz Media” received 6.7 million rubles of net loss on revenue of 23 million rubles, in 2013-m — 675 thousand rubles of net loss on revenue of 41.5 million, and in 2014 received a small profit 286 thousand on revenue of 65 million rubles.

Since 2010 uCoz began to work on a freemium model: the basic, essential piece of functionality the client received free of charge, and additional options, such as the function of an online store, or SEO-module (allows you to optimize your website to the requirements of the search engines) can buy. “We use uCoz for creating online stores due to the rich functionality. We have developed around 50 sites on their platform,” says Alexander Ananiev, founder of a design Studio MUST-STYLE.

The average monthly payment from inception to 2014 amounted to about $3 per month. However, two years ago, the rates increased, and the average check reached $7. Of 1-1,3 million users (their number depending on the season) paid packages purchased 50 thousand site owners.

In 2015, says Kurt, uCoz’s overall revenue was $3.5 million, 60% brought user fees, 25% advertising, 15% — “indirect payments” (e.g., sale of domains). uCoz interacts with several major aggregators of advertising: Between Digital, Criteo, Propeller Ads.

UCoz problem was compounded by the fact that the designers of the sites were used to host illegal content and spam. “Free website builders began to use spammers, peddlers of viruses, “pirated” resources, which, of course, affected the image of these resources”, — says Anatoly Denisov from CMS Magazine. Most of the top 100 most visited resources uCoz — torrent trackers, sites with free streaming videos and etc. Of top 10 most popular only Pedsovet.su Ekaterina Pashkova is not associated with “pirate” content. Designer and hoster, of course, is not responsible for the contents of websites that are created with it, but the ads on such resources is several times cheaper than conventional portals. “The most expensive impressions CPM cost 120 RUB per 1000 impressions, but very cheap — 10 rubles”, — says Kurt.

Roskomnadzor actively at war with the pirates, closing their domains. Last fall was set a sad record for one-week shut down from 50 domains on uCoz for “pirated” content.

uCoz was in a difficult position: the ordinary people go into social networks, big business prefers to use a paid “boxed” CMS, and the “pirates” will not earn much. In this situation, Kurt Eugene decided to bet on small business.

To try with small

In 2014 uCoz began to develop a CMS specifically for small and medium business — uKit. More than 200 ready-made templates for websites of businesses — car wash, travel Agency, photo shop, etc. the Tool is designed for the most inexperienced users to create a website by dragging function blocks with the mouse.

With the help uKit is possible to convert a public page in the Facebook website automatically. “This is a good move — many entrepreneurs are now beginning in social networks, and then decide to make your website. Integration with social networks the future of website builders”, — said Denisov. According to Facebook, the world more than 50 million pages of small business, in Runet their 150 thousand Similar service yet offer only two foreign project: Pagevamp and SiteFly. The sites to uKit are adapted for phones and tablets design.

First, in 2015, Kurt decided to make a new product at 100% pay, but it did not work: most users after a few days trial use did not begin to pay. So now the company returned to the freemium model — all the functionality is free, and for tech support you have to pay $4-5 per month. According to the company, uKit by April 2016 has already created more than 300 thousand sites. The average check user uKit is $7.5, you pay about 3-4% of users. In the uKit company does not place ad units.

“For a young teacher with a small salary was very relevant the free service”

Editor in chief Pedsovet.su Ekaterina Pashkova

“I developed the website Pedsovet.su in 2007. I was not a professional webmaster, creating websites was more of a hobby for me. The first website I created on the platform of “the People”, it was an unofficial school website, but there were difficulties with the addition of new materials, because each page had to be written from scratch, and it was not possible from users to participate in the development of the site, to add material.

At that time I came across uCoz and realized that it gives me much more possibilities. Here were ready-made modules: “news”, “Photos”, “Guestbook”, etc. was an opportunity not only I, as administrator, to publish their materials, but users to publish their development (lessons, presentations, tests). And in control panel as an admin, could assign rights to groups of users — so we have gradually appeared a team of helpers-moderators, who checked and published on the website of the incoming materials.

For a young teacher with a very small salary was very relevant gratuity of the service and its full functionality. In the future, we already bought the domain name pedsovet.su began to pay for separate services (for example, the expansion of disk space for storing files). I tried to watch other CMS, but there it was necessary to go into technical details, watch for updates, security, and programming a website.

Over time, of course, we faced some limitations, which are in the designer. Some unique services and functionality is impossible or difficult to implement. In recent years, however uCoz has given us more freedom in the management of the sites: the possibility to use PHP and the API database (i.e., the programming of individual solutions for themselves), there was a tariff, where it is also possible to implement customized solutions to make individual settings of the designer.

To date, our website has been around for nearly nine years — is even smaller, but the business”.