Exactly a year ago I was introduced to the concept of web proxies. Well, the concept was not new; I know what proxies and what they do, but I wasn’t aware that people were actually making web proxies to make money.

A proxy like this, is used by users around the world to browse websites anonymously from their office, school or home. Usually they do this to hide their ip address or to be able to browse sites which are blocked by firewalls and so on.

When starting out with proxies, I used phproxy. As you can read on that page, the programmer quit working on it for ‘moral’ reason. Although I consider his reasons bullshit (watching p0rn is fine and I don’t mind ‘breaking the law’ for a good cause, and I consider allowing people in the middle east to use US sites a good cause), he is entitled to them. The software is open source so any one can work on the code and develop it further.

There is a lot of other proxy software to use, but it is not really needed to try and test that all in order to make money in this market.

Before starting with a proxy, there are a few things to know which I learned the hard way.

Late 2006 I started running a proxy based on the phproxy software. After a bit of tweaking it started making money. First a few $ per day, but after a while I averaged $100 adsense a day. That is very good for a proxy as I read and hear.

Running proxies seemed very cool, because it appeared to take little work with high rewards. In fact it appeared so easy that I wanted to start hundreds of them. In januari 2007 I noticed however that my server load was consistently extremely high. The uptime command gave a constant load of 50 and, because of it, the proxy got slower.

When I was on holiday begin februari, my proxy went down, and although it was only down for a few hours, I lost half my traffic and it never came back.

To fix this, I came up with a new company that sold a small script to fix slowness, load and downtime of proxies on Linux servers. This script sold well for a small but then the server it was on crashed and the sourcecode of the script was lost, making it impossible for me to continue supporting it. But it worked and still works on my proxies.

My Adsense income dropped from $100 a day to about $40 due to the loss of traffic. But things became worse near the end of februari; income and traffic dropped to next to nothing over night. At that time I didn’t know why; I blamed the overkill of proxy sites on the market. Ofcourse it was because the IP of the proxy got blocked and traffic couldn’t reach it anymore.

I reopened it recently and it got traffic fast again and it is doing nice income due to different systems of income which I will describe below.

Things I learned;

• Proxies are moneymakers, no matter how many there are in the world; there is no such thing as saturated; they are one of the easiest ways to make money on the internet
• Proxies are viewed as illegal computer usage in a lot of companies, schools and even countries; they get blocked often and fast and you get complaints of people browsing and spamming sites aggressively
• Proxies are going to kill your server; be prepared for it! Use a script to make your server run smoothly; mail to me and convince me to give it to you
• Proxy downtime is a killer for traffic; you will loose massive traffic through it
• Proxies will almost magically get traffic with a bit of promotion and they will grow over time but they will get blocked; make sure to have enough ips

So what do you do to start one;

First thing is to get a dedicated server; a lot of guys are selling VPSs or accounts to host proxies, but if you get a bit popular they will easily block you because you are taking up too much resources.

You want to start a business doing $100/day at least, meaning that you shouldn’t have downtime because your hoster kills your account. Do not try to save money too much on this kind of thing, as it will bite you hard when you are finally starting to make money.

If you would like to try shared hosting, I can advise you to have a look here. This hosting provider is very good and you can certainly run on it for a while until you get popular.

Your best bet however is getting a dedicated, fast server, if possible in the US. I would hire a server here, as they have a very good network, fast servers and great support.

Once you have a server you should decide which proxy you are going to use. In the olden days, you could choose between CGI and PHP. CGI takes much more resources than PHP, but the PHP version cannot handle MySpace, Facebook and so on, while the CGI version can.

With the latest version of cgi proxy (which you can download here), it is possible to run in mod_perl which gives you performance and server resource usage comparable to that of PHP, while you can offer all features of the CGI version. So I advice you install that one if at all possible.

After you have it installed and running, you need to put on a nice look and feel; you can find many free proxy layouts here which you can add to your site.

Now we get to the most important bit of it all; monetizing your proxy site. Monetizing is not that difficult; you just need two things, which will simply give you the best results. The first is an Google Adsense account; the ads created with that account should be on your main page and not on the other pages (the pages which your visitors use to browse the sites they are interested in). This is the first page users get to, but after they have entered their url, they will not get back to that. So you need ways to get money from the real traffic on your site.

To monetize that real traffic, just sign-up here and you’ll be raking it in; I did not know this when I started, but it is really a big moneymaker. Just put one of their ads on the top of your pages and select full screen ads as well as context ads to get the best (and most profitable) performance on your campaign.

Now all is set to go and you can get visitors to your site. There are different ways to do this, but for me, the best ones are;

• subscribe to a lot of proxy and free stuff directories on the web;search for them in Google and subscribe to them with your proxy; it works
• get on social networks, get bunches of friends and send them your proxy so they can use Myspace and such from school via your proxy
• buy a link on proxy.org; it is not as good as it used to be, but still very efficient for a starting proxy

If you are very interested in starting a proxy but you want (much) more information about setting it up and monetizing, simply download this ebook ; it contains this and much more and in much more detailed. It is not written by me or by anyone I know, but I can highly recommend it as it saves you a lot of work finding out everything by yourself.