How I Built a Website to Earn Passive Income With Google AdSense

Sep 18, 2023

This as-told-to essay is based on a conversation with Avi Wilensky, a web developer from New York City, about how he created and monetized the Up Hail web application. It has been edited for length and clarity.

In 2014, I built a simple website over a weekend that compares taxi and rideshare fares. The site, which is called Up Hail, has been described as the Kayak of ground transportation. It helps users compare prices between Uber, Lyft, taxis, and other forms of transportation.

Up Hail was never intended to make money or become a business — it wasn't meant to be anything more than a weekend side project and a free resource on the web. But by luck and chance, Mashable named it on their list of best web tools that year. That motivated me to add some new features and optimize the site for search engines.

Now thousands of people come each day through organic searches and earned media, and ads placed on the site to monetize the traffic have resulted in steady six-figure-plus earnings.

For the most part, the site runs by itself through automation and is a passive revenue source. The only operating expense is AWS, which is less than $100 per month.

The major players in the space were expanding rapidly but were still not everywhere. I was planning a trip outside New York City and was not sure if there was a service in that area. I couldn't find any good resources on the web or in the Google search results with the information I sought.

My research uncovered a trend that other people were looking for the same information. When many people are searching for something and there aren't many resources that satisfy those queries, there's potential for a new niche opportunity. To fill the niche, I created a simple directory that listed the available services and prices in each city.

I find that designing on paper removes the distractions of a software application and allows me to focus on the core functionality. Plus, my background in web development gave me the ability to create the initial version of the app without having to hire outside resources or invest anything besides my time.

I then used my hand-drawn sketches to create some low-fidelity wireframes on the computer using software called Balsamiq, which removes the distractions of color and design and allows you to focus on the layout. It's simple to use and I recommend it to anyone who wants to mock up an app or website.

I other types of projects, I would usually hand off the wireframes to a professional designer — but since I saw Up Hail initially as a scrappy no-budget side project, I went about it myself. I used some off-the-shelf front-end components by Twitter called Bootstrap to build a basic front-end user interface based on the wireframes. I then created a simple back end by spinning up a low-cost virtual server, a database, and a Python-based web framework with the business logic.

I purchased the domain name (uphail.com) for $12 and pointed it to the new server. This was the genesis of the initial version. The site was announced on several sites and forums that publicize new product launches. After that, I did nothing else on the site for several months, as my client services business kept me busy.

I noticed a huge spike in traffic on a single day and clicked further to investigate. It turned out to be the lucky day in that Mashable added the site to their annual list of best web products.

I was shocked to see that this scrappy site that I cobbled together over a few days made the cut. This gave the validation I needed to make it better. I brainstormed some new features and added them to the site. I gave the site a new design and optimized the pages for search engines.

Soon enough, the efforts paid off and users were discovering the site in organic searches. Other major media outlets featured the site, and this earned media helped improve search visibility. It wasn't long until several thousand users were coming to the site each day.

Getting up and running with ads was as simple as signing up for a Google AdSense account, getting approved, and copying and pasting some code into the pages. From then on, every month, Google has been depositing a lump sum payout each month into my account — even when I do no work to the site and make no changes to it.

Here are four tips that I recommend to set up a passive income web application:

One of my favorite quotes is from Werner Vogels, CTO of Amazon: "Everything breaks, all the time." My site used to experience frequent outages. Besides being embarrassing, outages mean ads cannot be served, resulting in a loss of revenue for the business. Outages can also hurt a site's performance on search engines.

This is why it's imperative that sites are well-architected for high availability. Automation is what keeps a site up and running smoothly and makes it more resilient to outages, resulting in less time spent on infrastructure and revenue disruptions. If your site blows up while you're sleeping or on vacation and it doesn't have the ability to heal itself, then your passive income stream evaporates until you step in and fix it.

I wasted countless hours keeping the servers up and running smoothly on manual testing. Lesson learned: focus on the product, not web infrastructure. When new updates are made to the site code, automated checks take place before the code can be shipped to production. Automation alerts you if there are any problems in production that need to be addressed.

When I first started monetizing the Up Hail site through ads, my approach to keeping the income passive meant not having to spending the time trying to sell ad space directly to advertisers, collecting payments, validating clicks, etc.

This is where an ad network came in — using a network to sell ad space keeps the entire process passive. I chose Google's AdSense, which is the leader in this space is, but there are others.

The way that ad networks work is by auctioning off web-page real estate to the highest bidders. The network is also responsible for serving the most relevant ads to users that will maximize earnings. The network takes a big cut of revenue for these services, but they also do all the work. Once a month, they directly deposit earnings into my bank account.

Signing up and getting started is self-serve, free, and open to almost anyone. It used to require a decent amount of manual configuration to create ad units and place them on web pages, but now the entire process is completely automated.

For many publishers that are earning revenue through advertising, the economics of purchasing traffic — and then monetizing that traffic through ads — won't work. If you have a website and all your traffic comes from Google Ads and Facebook Ads, and your only means of monetization is through display advertising, you'll probably be deep in the red.

My approach was to find lower-cost methods of traffic acquisition, such as through organic channels. Most of the traffic to Up Hail comes through organic search, and I placed a lot of emphasis on SEO during the site development phase.

There are tens of thousands of pages on the site, and each page is optimized around different unique keywords. This "long tail" approach enabled my site to gain visibility in search right from the beginning.

New sites generally take time to rank for terms that are competitive, but for niche non-competitive terms, you can see results almost immediately. Getting press mentions and media coverage is another good source of non-paid traffic that will improve search visibility but takes some work and persistence.

The economics of this type of passive-income business work because of the minimal cost to keep it running online. The largest monthly recurring expense is from the cloud provider, which correlates with usage and traffic. For a small web publishing business, monthly net profit can be as simple as ad revenue minus hosting costs.

All the major public cloud providers like AWS or Microsoft Azure have a utility model for pricing, with free tiers for most services. If you have zero visitors, the hosting costs should be zero or near zero.

With this democratization of infrastructure, everyone has access to the same enterprise-grade products as the biggest corporations, and you only pay for what you use. This allows you to take risks and deploy applications and sites without being locked into fixed recurring overhead fees.

New technologies have reduced my costs further. Since switching from servers to a serverless architecture, my hosting costs are down from a few hundred dollars a month to about $100.

If I had to pay a significant amount each month to keep the machines running, I would have likely shut the project down after the first few months, and the business never would have been able to reach its potential.