Today’s opening keynote at the Add-on-Con conference in Mountain View CA highlighted the similarities between monetizing add-ons and monetizing Web sites. Although distribution channels and products differ, according to moderator Jeremy Liew of Lightspeed Venture Partners, in general add-ons generate revenue through: “search, advertising, affiliate type commerce and APIs.”

Methods of Distribution: AMO, Widgets, Webmasters and Partners

Alexa‘s Geoff Mack explained that if you want your add-ons distributed, the key is in exciting webmasters. “Offer them a benefit, be it social or monetary, and you’ll find they will be more likely to promote your service or product,” he said.

James Joaquin from Foxmarks, the startup we wrote about two years ago, explained that AMO (Addons Mozilla Org) has been a phenomenal source of distribution for Foxmarks. But getting on the front page is a trick, and Joaquin attributes much of that success to Foxmarks having a founder that has had a rich history on the Web: “Not so much for pulling strings, but for being there early,” he said. Mitch Kapor, Foxmarks co-founder has a long history on the Internet, being the co-founder of the Electronic Frontier Foundation as well as the founding Board Chair of the Mozilla Foundation.

Alec Jeong from CoolIris explained that a vital element to consider when it comes to distribution is the touch points with your user; find out where your user will be, and then make sure you too have a presence there. CoolIris, the extension that transforms your browser into a 3D experience for enjoying online media, has also been working on building partnerships for distribution over the past six months.

Alex Iskold, founder of Adaptive Blue, the company that recently released Glue, confirmed the importance of getting onto central hubs like AMO, but also recommended using widgets as a way of distributing your product further. AMO, Iskold claims, accounts for 90% of downloads for his company. Glue, the new browser plugin that uses semantic technology to connect you to your friends and what they are enjoying was recently covered on ReadWriteWeb.

Monetizing the Add-on Business

Search, advertising, shopping, recommendations and services are the main methods of monetizing add-ons according to the companies presenting today, but which business model has the greatest opportunity for success? Well it turns out that much depends on your personal philosophy, resources, and capital; there is no one right answer.

Alexa, purchased by Amazon in 1999 hasn’t been ‘under the gun to earn,’ according to Mack, who concedes it is a luxury not afforded to all companies.

OneRiot, the social search engine, is on the flip side of that coin; continuing to build toolbars for other people in order to generate short term revenue. Kimbal Musk recommends search boxes as a form of monetization, claiming that the company only recently added search to their toolbar but has seen unexpected growth and traffic: “People use the toolbar to search,” he said.

Adam Boyden from Conduit, the company that provides website syndication solutions for Web publishers, says that search is secondary and that the company’s entire business model is letting publishers put their interesting content on a toolbar.

And then you have advertising. Adaptive Blue wants to make commercial transactions without showing you an advertisement; CoolIris on the other hand is mostly concerned with giving you beautiful ads.

We’ve discussed whether browser extensions can be a business before, and if today’s conference is any indication they can and are.

Whether add-ons are on your site, or across the wider Web, the business of add-ons has now proven itself to be capable of driving user engagement and attracting investment, and judging by today’s sold out conference, one area of the Web that holds great interest.

Disclosure: AdaptiveBlue’s CEO, Alex Iskold, is a feature writer for RWW.