During this era where the NASDAQ has lost 60% of its value and Wall Street is severely punishing companies whose projections are unable to show a fast track to profitability, the savviest Broadband Service Providers (BSPs) understand that generating additional revenue from their existing infrastructure is vital. Further, BSPs' quest for profitability has become more complicated as the advertising revenues included in many business plans have been reduced to reflect the realities of today's economic climate.

Part of every BSP's path to profitability should include an affiliate program. In addition to mitigate potential revenue shortfalls, affiliate programs adds diversified and low risk revenue streams, helps reduce churn by increasing customer satisfaction, and enables BSPs to acquire customers and compete on a basis other than the price of their primary service - Internet connectivity.

Affiliate programs are "purely profit" to Broadband Service Providers - $3.00 in monthly revenue generated from an affiliate program can contribute the same profit as selling customers a new $10.00 service.

Most broadband customers utilize their fast connections to empower their online experience, and these Netizens increasingly subscribe to online services to enhance their productivity or enjoyment of the web. Services such as online shopping, making travel reservations, and domain name registration services are a couple of the more popular. However, consumers often find it difficult to wade through a blizzard of services and product claims from merchants that are unfamiliar to them. Consumers also worry whether these products will live up to their online promotion, and if the merchants marketing them are reputable.

BSP's can offer their customers a valuable service by conducting due diligence and offering a recommended list of broadband services and merchants. Merchants offering affiliate programs generally share the revenue generated with BSPs that partner with them. Some require exclusivity; others don't. Some have affiliate programs offer marketing support and incentive programs, while all either pay either a one-time sales commission or a monthly share of revenue that is collected. While the affiliate programs vary widely and many merchants have flexibility regarding their contract's specific conditions and are willing to negotiate terms, a predictable reoccurring revenue stream is deemed by most lenders and equity sources as being the most important element.

Affiliate programs enable BSP to receive new revenue streams from a wide variety of offerings without the requirement to make capital investments. Some BSPs use affiliate programs as a low risk method to gage consumer demand - and if it is warranted, later launch their own in-house program. Affiliate programs are pure profit to BSPs - and $3.00 in monthly revenue from an affiliate program can contribute the same profit as selling customers a $10.00 service. While the Net offers thousands of affiliate programs in a wide variety of categories, BSPs may find those offering ISP services, online shopping, and online services generate some of the higher consumer penetration.

Broadband Service Providers generate virtually risk free revenue streams by adopting an affiliate program strategy - no incremental capital is required and the operator may have substantially more flexibility to modify or discontinued these programs.

ISP services. Online backup technology offers users encrypted off-site storage in multiple disaster proof locations. www.atbackup.com offers users access to their protected files anytime and from anywhere in the world - they offer BSP's a $15.00 commission for every customer that takes advantage of their 30-day free trial. Alternatively, www.freedrive.com provides users 50 megs of free online storage, and pays BSPs a reoccurring $.25 per active user or 25% of banner revenue. For hosting, www.Akashik.net provides users an inexpensive hosting option ranging from $7.95 to $59.95 per month. They pay their affiliates 10% of the monthly fee. www.HostX2.com will customize a hosting website to match the BSP's look and feel, while returning a 25% revenue share. www.Domain-Maniac.com provides domain name registration for only $15.00 per year, and offers a 10% revenue share to its affiliates. Alternatively, www.AccurateDomains.com charges customers more for its suite of domain name registration services - but returns a higher revenue share to BSPs - a flat 25%. For ISP seeking to offer spam protection as a value added service without the infrastructure requirements of a server based solution, www.SpamKiller.com is worth considering. SpamKiller.com offers affiliates 15% of each sale

Online shopping. www.3Dog.net offers 4,500 products from over 100 manufacturers, while providing affiliates 5% on each sale. www.Prefer.com is an online catalogue aggregator and offers an assortment of clothing, home furnishing, cooking accessories, gourmet foods, jewelry, and gifts. Expect to receive from 8% to 10% for every dollar that your customers spend on this site. Even well know brand names offer ISPs the opportunity to revenue share. As an example, ZanyBrainy.com extends affiliates a 7.5% to 10% of each dollar spent, rewarding providers that send the most amount of traffic to the merchant's site with the highest commission rates. www.AllStarMall.com - is another online catalogue aggregator and offers a flat 10% commission for every dollar spent by a customer. Sites that sell products with higher markup extend even more lucrative revenue sharing opportunities for BSPs. www.DynamicDiversionsShop.com is a retailer offering jewelry, executive gifts, and unique gifts for the entire family - and they offer their affiliates a 20% revenue share. Online shopping is not limited to merely purchasing merchandise. Online medications are one of the Net's fastest growing sales segments - and www.UltimateRX is an online prescription site offering affiliates a 8% to 15% revenue share.

Online services. BSP customers often use the Net to research and improve their portfolio's financial performance. BSP's receive from $.12 to $1.40 per click through each time one of their customers visits www.quotes123.com. Travel is another popular activity of Netizens - and www.LapTopTravel.com offers a 6% commission, frequent sales contents, and marketing assistance to their affiliates. For affiliates preferring a flat rate form of compensation, www.HotelGuide.com provides a $4.00 commission for a BSP's customers that make reservations at one of its 65,000 hotels in 200 countries. This site also offers a structured loyalty system reward program for affiliates that send them substantial traffic. www.Shutterfly is a great place to print, share, and get creative with pictures online. Affiliates receive $1.00 for each customer that registers at the Shutterfly website. www.VirginMobile offers its users a combination of inexpensive calls both day and night, with no line rental or service charge. VirginMobile provides its affiliates a 15% commission on each sale. Cellular accessories are available at www.Yestopia.com - and pay affiliates 20% of the revenue derived from each sale.

Finding the right affiliate program that meets consumer requirements is often the first step to making money. The second step is negotiating a contract that meets the Broadband Service Provider's requirements.

Affiliate due diligence considerations. Entering into an affiliate program necessitates the same type of thoughtful due diligence required when contemplating any new business relationship. The merchants listed above have been provide to depict the variety and revenue potential of utilizing an affiliate program, but each will require the BSP to conduct ordinary due diligence. Some of the elements to include when conducting due diligence are:

* To help judge a prospective merchant's long-term viability, determine how long the company has been in business and how many affiliates are participating in their programs. Publications, including RedHerring, WinList, PCWorld, or CNET may provide industry reviews or awards for best of class affiliate merchants.
* Avoid arrangements that require affiliates to post logos, graphics, or hyperlinks to the merchant's website that are not a direct part of the commissionable relationship.
* Ensure the program does not require a "membership fee" or "enrollment fee" for simple involvement. Beware of merchants that stipulate a "check cutting" or "processing fee" when sending affiliates payment.
* Make certain that the affiliate has a published affiliate agreement with the provision that substantive changes to the program will be only made "in good faith." The agreement should require the merchant to notify the affiliate of material changes, including changes to commission rates and payment frequency.
* A BSP's customers entrust their BSP to safeguard their privacy. Affiliate programs should specify a privacy policy acceptable to the BSP's customers with opt out privileges. Check if the merchant is a member of the TrustE.com privacy program.
* Merchants that provide limited contact information can be a warning sign. If an affiliate program does not list the merchant's email address, postal address, and telephone numbers - consider avoiding them. Membership in the BBB online reliability program is a good indication that the merchant is reputable.
* Does the merchant offer arbitration or mediation in their agreement? An established and documented dispute resolution process could be an indication that the merchant is genuinely interested in resolving any disputes.
* When contemplating a new business relationship, it is wise to focus on an exit strategy. BSPs should understand what constitutes cause for termination from the program, and the BSPs' rights to end the affiliate program. It's important that the "cash out" provision be carefully reviewed.
* The merchant should provide details on what performance statistics will be available to affiliates and what tracking records are accessible by the BSPs. This will allow the affiliate to check on the success of the program and make certain that they are being properly compensated.

Much as the introduction of pay television helped monetize cable operators' infrastructure investment in the 1970's, BSP can offer online services that will both increase their customers' satisfaction and generate new revenue streams.
Affiliate programs have a disproportionate impact on financial statements since the revenue they generate falls to the bottom line - they are usually "purely profit." These services will enable BSPs to more effectively acquire new customers and compete on a basis other than the price of Internet connectivity.