In researching most successful online businesses, you start to notice a trend emerge. As far as websites go, there are a few giants such as Yahoo and MSN that cover every topic imaginable. For most people, taking on these established publishers head to head is an enormous task beyond their reach. After all, one or two people working from home or in their spare time cannot match the resources (billions of dollars and thousands of employees) of these corporations. At least not in all areas.

Focus, however, is a powerful weapon online. You'll notice most smaller publishers have an area of expertise, their niche. Yahoo may be a jack of all trades, but a master of none. Find your niche, something you love to read or talk about or have special knowledge in, and build a website around that. The profits will soon follow, for two interrelated reasons.

Reason 1: Your audience.

As a reader, you want insightful content, by an author who actually cares about what they are covering. And usually, people aren't interested in everything, they have a set of likes and dislikes. The general audience of the internet fragments itself according to taste, meaning visitors gravitate towards sites that cover their interests. By focusing on a niche, you are targeting a specific fragment of this audience. This helps you capture a following, but that alone isn't enough to profit from. This leads to reason two:

Reason 2: Advertisers want your audience.

One of the great advantages of internet advertising is the ability for advertisers to target specific demographics, as opposed to the television advertising technique of blanketing the airwaves with a general message. Advertisers, and subsequently publishers, know that the more specific their sales pitch can be, the more effective. And it makes sense.

Say for example, you are watching the evening news and see a commercial for car. Sure, it might raise you awareness of the product (a reason why this type of ad still exists), but you weren't really looking for a car. You were watching the news.

Now suppose you were reading a website dedicated to Ford Mustangs. There is a much higher likelihood that you may be interested, if not in buying the car, then in related accessories or insurance or reviews, etc. Advertisers know this and use the knowledge to increase the effectiveness of their campaigns. More bang for their buck, in other words.

By establishing a steady readership to your niche content, you have done a lot of the work for the advertisers. In turn, by featuring targeted advertising, your readers are more likely to respond, and find it useful instead of annoying. It is a virtuous cycle that leads to increased profits.