Creating own physical products is a good idea. Make sure you get a good patent on the idea, sel lto distributors etc I can see that being a really good way to make money....more of aprocess but much more secure and could get big.
I wiuldn't bother with software/ebooks/offline SEO at all. You have no controll over it. Any one can copy/clone/rip/pirate too easily.
Sorry, but this is terrible advice.
There are plenty of people who create their own software/ebooks and market it to to an ultra specific niche and make plenty of bank.
And to the OP:
As long as ad networks still exist, and the internet regulation remains minimal, you can always make money online.
Now... When it comes to internet marketing, there are always "hypes" that get the newbs thinking they can strike it rich.
7 years ago it was all about adsense. 5 years ago it was all about myspace. 3 years ago it was all about craigslist. 2 years ago it was all about facebook fanpages.
For all of the monetization methods listed above, people always cried out "SATURATION!" after a year or two. And guess what? They're right. The hyped up traffic source or monetization method will ALWAYS get saturated.
However, there is something that will always be a guaranteed money maker: product creation. This can take form in either a service (selling links in forums like BHW) or an ebook (selling ebooks in wafo or selling weight loss ebooks via media buys).
ALSO, there are always new trends. Take advantage of them. Diablo 3 is coming out? Then monetize diablo 3beta keys, cheats, etc. New weight loss controversy? Then spam the shit out of google to get your site to the top, and content lock that baby. A celebrity died? Sell t-shirts and merchandise. Hot trends can make big money. I've personally seen the $xxxx days and $xx,xxx days, and they always end quickly. But you have to go onto the next trend.
If you're lucky enough, a trend can last a LONG time. For example, let's say it's 2004 and you are the first to monetize world of warcraft guides and your brand name earns a great reputation. Well, lucky for you, your business will have lasted for a loooooong time because WoW is still played by millions in 2012. You may have not been able to predict the longevity of such a business, but all business entails risk. NOBODY knows everything about IM or business.
And when people say affiliate marketing is dead? They have no idea what they're talking about. Affiliate marketing is essentially marketing SOMEONE ELSE's product or service. Just pretend that you created the service or product that you're marketing for as an affiliate, and then ask yourself "How would I market this?"
If you know how to drive traffic, write sales copy, and create a great landing page (which anyone can do, btw) then you will be in business for a long time and make great money.
Now, I feel you OP. I've been in positions where I felt the same way you did. But if you truly want to make it in IM, then you MUST ignore the people who are telling you to quit. Fuck them. Yes, 7 years is a long time, but does that mean you can't succeed? Let me tell you something, there is a mentality among the IM community that ANYONE can largely succeed regardless if you dropped out of high school or if you just graduated from Harvard Law School.
IM is just something you have to "understand." And "understanding" IM isn't difficult at all. Sales copy, landing page design, programming, graphic design: ALL these things are easy to learn and are easy to hire someone else to do for you. Don't be discouraged if you don't quite get it yet. We ALL started at your position. For some people, it took a few months to succeed. For others, it took 3-5 years to succeed. But it doesn't matter how long it takes you. Did you know that the founder of Home Depot started his business in his late 50s?
IM is a goldmine opportunity for anyone who wants to quit their day job and to solidify an online income. Take advantage of it fast. There are tons of ad networks and traffic to be had, and LOTS of stupid consumers who are oblivious to online sales techniques.
So take advantage of IM NOW. IM allows the average joe to become a millionaire.Get rich, get money, get paid.
If i had to give more specific advice to your situation, here is what it would be:
Get rid of your websites right now. Obviously they are costing you lots of money, time, and frustration, so why don't you want to give it up? Yes, you may have invested years of time and money into the project, but if it's not going to make you any money, then WHY are you still holding onto them?
If I had to guess, I would say you're not getting rid of the websites because you have an emotional investment (after spending so much money and time) in your sites. Don't let that hold you back. Get rid of them.
Then look around you. What are other people doing to make money? Check out facebook ads, PPV traffic sources, SEO methods, media buys (don't let this phrase scare you, you can do media buys that only cost $xxx and still make a nice profit)
By the way, a
guaranteed method to make cash is to create a warriorforum account and sell ebooks. Make sure your warriorforum account is aged and has posts. Make sure you sell a good ebook. Make sure you know sales copy and know what the fuck you're doing, but to be honest, this would be the best and fastest way to make quick cash. It's the easiest money that can be made online, ever. I personally don't do it as I have other revenue sources, and you need to spend time doing customer support for newbs who don't know how to buy a domain. But it's a bloody easy way to make money. You just have to convince warriortards that they're getting their money's worth.
....
It's all up to you. Take small steps at a time to reach your goal. Start off at $30/day, then move your way up. Don't let IM be the focus of your life, otherwise, you'll be ripping your hair out a LOT. Just remember that you can succeed. If there are high school dropouts on this board making $xxxx/day and were told all their lives that they were failures, then why can't you?
Phew, that was a good break, now it's back to work!
edit:
i just read blueturtle's post and i wanted to reiterate what he said. He is spot on. Read his post once. Then read it again and get that into your head.
IM IS EASY. You're working from home on your computer. You can hire indians all over the world to do your busy work. Online consumers are so oblivious that you can sell ANYTHING to them. You can have ROIs of 1000%+ doing internet marketing, while ROIs of 50% and up in the offline world are UNHEARD OF. You have fiverr are your disposal. You can outsource sales copy, website creation, link building, EVERYTHING for very little money. Never take all of this for granted. See things from a different perspective, and you'll see the true abundance of IM.
In the offline world, people take out $30k loans, and the odds are that they will go bankrupt. Online, you can invest $xxx or a low $xxxx to decide if this is for you or not, and then proceed to make 6 or even 7 figures when you know how to do it and figure it out.
It's all a journey. A process. It took me years to acquire the knowledge that I know now, but I am grateful for it.