When you've got a piece of software, and you're thinking about how to get money in exchange for it, there are clearly many sources advising you to give it away for free - the logic being that you monetize eyeballs. By far, the most popular way to do so is some form of advertising. One way this works is through site adds, where if you're clever you'll figure out how to make the adds targeted, such as Pandora. Another way this works is through some sort of affiliate program. In an affiliate program you get a fraction of the payment a customer gives a company you helped hook up through your site. Any coupon finding service works like this, like this one.

The typical value you get in exchange for an ad click, though, is extremely small. To get a feeling for the state of things, check out Guy Kawasaki's review of one year of blogging (for those unaware, Guy Kawasaki is an extremely popular blogger on tech entrepreneurship, who also happens to be a venture capitalist). He got on avg. 6,200 page views per day, and with the adds placed on his site, generated $3350 during the entire year. To contrast this, look at something like MySpace, which evidently makes $30 million in advertising dollars. And that's because they get, according to TechCrunch, 15 million daily unique logins.

What I"m trying to say is, this model makes financial sense only if you can attract a gigantic amount of traffic to your site. So much so that, in order to reach sufficiently many people, what you're doing has to appeal to the absolute lowest common denominator. Everyone has to be in the target market for your software.

Do you think Mathematica could survive with this model? Photoshop? Maya 3D? These are spectacular achievements of software that absolutely could not survive if the creators were gripped with the Web 2.0 mania that demands you give your software away.

So, if the circumstances are right, be unafraid to do the old fashioned thing and exchange what you've made for money. If you possess specialized knowledge which you've used to make something great, people will pay you for it.

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