Forum Moderators: martinibuster
Let's consider all things being equal and that AdSense remains the market leader and that the AdSense style, or the new unknown AdSense baby advertising format, is here for quite some time.
Do you intend retiring or simply keep reaping the rewards you have sown leaving your relatives to sort out the problem after you have died?
Maybe you have considered selling the site as a "going concern"? The value is obviously what someone else is prepared to pay.
Do you have any children, relations or employees who could or even would take over?
On a further note, just how would the Tax authorities value such a business for death duties etc?
Here's a suggesting for a new business venture. Commissions gladly received for the idea:-)
A site selling established and provable AdSense businesses! Does this exist outside of the ebay trashy stuff?
Me?
I'm looking to progress my AdSense sites over the next couple of years well into the $00,000.00 per month, sell up all my UK assets except for the family home and move to somewhere nice and temperate but continue with the AdSense as my pension since the UK government sure as hell ain't going to give me anything worth having!
Where? I haven't decided yet. I'd better ask EFV:-)
Damn, is there an IslandsForVistors?
OK, can you give me one example of how this would work? You've piqued my curiousity.
This has been my goal since I first built my site many, many years ago. Now that my site is finally making decent money (still a long way from all of those goals), I'm excited about what I will do along the way.
I haven't thought much about what I would do with my site if I decided to stop doing it. I have no one to leave it to except my husband. Since does not have computer skills other than turning the computer on and off and sort of surfing the net, I made sure he has a very important piece of paper in the safe. It tells him who the web host is and what to pay each month and it tells him how to pay the domain name to keep the site going. From there, I guess he is on his own.
You will never get the "value" of your AdSense web site on selling them. Let us say you are making $10,000 a year. You would have to get $125,000 for it in order to re-invest in bonds that at best are going to return say 8%Putting it differently, are you really likely to sell a collection of sites returning you a modest $5000 a month for $750,000 - I think not
I think you have misunderstood my original post.
My intention is to sell the bricks and mortar businesses, which are multi-million Dollar businesses in their own right, but to keep the web sites running AdSense as a, hopefully, ever-increasing pension scheme without having to delve into the capital from the business sale.
Does that make sense now?
My fag packet calculations tell me that an AdSense USD 10,000.00 per month will keep me nicely in the lifestyle to which I have grown accustomed:-)
And especially so if I don't have to pay any tax on it!
Bottom line -- AdSense is my retirement plan, so I will be doing it (or something else) from now on.
I hadn't thought about what to do with it when I am gone. Thanks for getting me to think about this deeper. Mmmmmmm.
OK, can you give me one example of how this would work?
Did you mean the tax, or getting your kids to 'invest' and feel they have some kind of stake? Well, I'll answer both, as there can be some overlap. Also, I can only talk about the tax stuff from a UK perspective - apologies if you're from elsewhere in the world and this doesn't make sense.
One way to beat tax is to set up the business as a separate limited company and issue shares to members of your family. You can then avoid higher rate tax on income, and make use of tax allowances for each of your children. Perhaps you could even put the money straight into an ISA or the shares held in trust for them (professional advice would need to be sought for the best structure for you). You can decide how much money each gets by the number of shares - you have lots more shares yourself thus giving yourself lots more income.
Giving them shares with a small amount of income is one way to whet the kids' appetite and get them to take some interest. You can then encourage some proper investment of time and effort but setting up a scheme where they can then get more income (but not shares, in the short term) if they put more effort in. If they work on your website, you pay them either on a time/results basis, or on a bonus basis (%age of increase they generate).
Another way to get them to start investing (one that I'm using) is to help them start their own website on a topic that interests them, and either let them keep the revenue from that site or split the revenue with them. This enables them to learn the ropes themselves and get 'hooked' by the idea of generating money through publishing. Then, if they want to earn more from this, you could start to share other websites (if your account is structured like that).
The key thing is to work out a scheme that suits you and them, start small, and then match effort with reward. The more they invest, the more they get out. You need to follow the IF... THEN... principle. IF they do X, THEN they get more money. Don't "assert the consequent" (which is the name of a logical fallacy) - ie don't assume that IF you give them more money THEN they will do X. As I'm sure you know, that doesn't work.
This latter point means, for example, that you won't immediately issue further shares as a reward, because they can ease back and continue to get that income for no effort. Apart from the starter/taster shares, shares should only be a reward for long term investment of time/effort.
And especially so if I don't have to pay any tax on it!
My intention is to sell the bricks and mortar businesses, which are multi-million Dollar businesses in their own right, but to keep the web sites running AdSense as a, hopefully, ever-increasing pension scheme without having to delve into the capital from the business sale.Does that make sense now?
Makes perfect sense, particularly as I am further down that same route than you at this point in time.
You had me worried that you were going to offload web sites and not get the same return on employing the capital from them.
Surely the whole purpose for many here is to build a business constructed upon a pretty solid foundation?Heck, if someone came to me and showed me 24 months of provable AdSense income increasing from say $500 to $10,000 per month, then I'd be very rapidly interested.
The only problem is that you don't posses the main keys of the business.
Drought could come tommorow and last forever.
And there is no damn thing you could do about it.
21: OK, now that's making some sense. We're not to the stage where setting up a company is cheaper than just paying income tax, but we should be in 2-3 years. Then we'll have to investigate all the possibilities. I do like the carrot/stick approach you listed. Thanks for that!
And while I think AdSense alone is too unstable for a long term retirement, I too plan on a retirement based on a number of more-or-less passive incomes vs. sitting on a pile of money in a bank. For a while anyway. Maybe when I'm 80 or 90 I'll feel differently, assuming I live that long. :-)
If it was really that easy, everyone would be doing it.
(I assume most other countries have similar tax laws.)
I think if you spend less than 90 days per tax year in the UK, you don't pay any tax in the UK. At least, that's what my brother in Dubai tells me.
Oh, and people in Dubai don't pay any tax at all. At least, that's what my brother in Dubai tells me.
I'm not a lawyer, but I have come across this more than once:
"If you have your full time residence abroad for a full calendar year, or live there for 330 days out of any consecutive 12 month period, you can exclude up to $80,000 of earned income from U.S. Income Taxation for 2002 and $78,000 in 2001. If you are married, and both of you earn income and reside and work abroad, you can also exclude up to another $80,000 of your spouses income from taxation. These exclusions can only be claimed on a filed tax return and is not automatic if you fail to file your Form 1040 for the year it applies as well as the appropriate forms claiming this exclusion. This is a fantastic advantage for people who live and work outside of the U.S. Earned income is that paid you for your work or services and does not apply to rental income, dividend or interest income, or other types of income that is not paid for your own personal efforts.
You can also claim an additional exclusion from your U.S. taxes in excess of the $80,000, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $11,500 per year) established by the IRS. This exclusion only comes into play when your earnings are in excess of the $80,000 foreign income exclusion."
--- so you setup a bank account and move to the Caymans..? If AdSense will EFT there, and if you keep under that amount...? No taxes on that amount, right?
But Canada as far as I know has no exceptions to this. So as a Canadian I'd have to completely drop my citizenship. And our health care system is too good to do that... that's my #1 problem with moving to another country, finding an equal health care system and as great a sense of personal security as I have in this country.
I don't rule out moving the family to another country for tax purposes. Again, I'm the first to admit I'd have to do a lot more research on it. Use this as a starting point not advice.
On a side note, if you sell your adsense business, does that not make it a MFA site at that point?
Not unless you made the site for AdSense, in which case it was an MFA site all along.
In your opinion, What would be it's price?
That makes it very hard to sell on any business. Wherever you have a "key man" you have a weakness.
If you are looking to leave your web portfolio to your beneficiaries, anticipating that they'd run it rather than sell it, it's important to consider that problem and remove yourself from the "required" loop as best as possible.
TJ
I think if you spend less than 90 days per tax year in the UK, you don't pay any tax in the UK. At least, that's what my brother in Dubai tells me.
We're getting into the realms of double-taxation agreements etc here and anyone considering this kind of relocation really needs very serious advice.
Most "Western" countries now consider most types of income taxable regardless of source.
The crucial cut-off for most countries is 183 days and for UK AdSensers here is the UK Revenue's stance:
[hmrc.gov.uk...]
Obviously there are other countries which have similar laws but do not tax their foreign residents either as heavily or not at all on their outside income so long as they have a minimum financial status when moving there.
It is a much more complicated issue than even a couple of years ago therefore check, check and check again before doing anything since it could have serious ramifications.
On the upside of this, especially insofar as Europeans are concerned, just ask why it is that so many of our top sports & business people are not "normally" resident and why Monaco is so darned expensive.
There are much more less costly alternatives:-)
Please, no stickies about this issue.
If you are getting traffic and clicks Adsense ads, you could still probably make more money through either affiliates or direct advertising.
Adsense simply takes away the need for web publishers to have to find advertisors, place their ads, make them happy and collect payment.
So in theory guys if i can get over billion page hits a month I've got a nice 100,000$ a month to ride on by, 1,200,000$ a year is good enough for me. Unless someone offered me 50,000,000$ i would not sell up.
One of my sites is generating $3,800 / month.
In your opinion, What would be it's price?
The only thing that would make an AdSense business different from any other business would be the reliability (or lack thereof) of the traffic that arrives at your site. Since the AdSense account itself can't be transferred, neither can your history with it, a new owner would have to use their existing AdSense account or start a new one. That Google might see that as a problem is a risk a potential buyer would have to consider. Finding people who have transferred their AdSense account from one site to another and documenting their experiences would be helpful in selling the business.
The longer the period that the traffic and income have remained stable and the wider variety of sources for the traffic the better the case can be made that this will continue into the future and considered a valid forecast.
Yes, there exists the possibility that the traffic and/or income would just disappear inexplicably, but it could be argued that this possibility and this risk exists with any kind of business for sale.
The better you can make that case to a prospective buyer the more likely you would be able to use an ordinary formula in valuing an AdSense business.
In the end the correct price is the highest number that someone will pay. If one believes some of the people in this thread, that number is not very high. If you are serious about selling an AdSense business you should develop a narrative for discrediting these negative opinions. The most essential element of such a narrative would be a long and consistent history of earnings.
Unless someone offered me 50,000,000$ i would not sell up.
However that is not what this thread is about. We are discussing what plans, if any, we have for retirement etc, not theoretical market values.
So greedy player you are making $18,000 per month, what do you foresee as the future for your business?
Do you have children to take it over or have you not considered that far ahead yet?
Do you make $18k on your own or do you have any employees?
An AdSense business could be run from almost anywhere therefore do you pay much tax now, have you planned ahead with regards to minimising your tax exposure?
Any ideas where you may consider relocating to?
These are the simple questions you may easily find asking yourself much sooner than you believe.
Professional Webmaster Business Issues
[webmasterworld.com...]
WebmasterWorld Supporters Forum
[webmasterworld.com...]
Many of the contributors to those threads are people who buy and sell Web sites, so their opinions are worth reading.
The only thing that would make an AdSense business different from any other business would be the reliability (or lack thereof) of the traffic that arrives at your site.
Wrong, even that is not a sure variable.
Many experiences proved that:
a) Earnings are not directly proportinal with the traffic recieved. E.g. 20,000 legitimate visitors don't produce 2x earnings of 10,000 legitimate visitors, even with the same CTR.
b) 10,000 legitimate visitors make $x to publisher A, while 10,000 the very same visitors clicking to the very same ads produce three or four times $x to publisher B.
Which brings a lot of uknown to the valuation of an Adsense business.
Haven't turned on Adsense yet for him, not sure about the age thing, I know if I had the account in my name then it would be ok to set up but there could be something legallities to look into. I will look before I set him up. His first site already gets about 150 unique visits per day... at this rate (2 sites by 11 years of age)I am not sure that my son will have room for my sites by the time I am ready to move on who knows how many he will have.
In the future I hope to earn over 10,000$ per day on adsense. I know it sounds unbelievable but thats a Goal I am trying to reach.
As far as tax that is to be decided my earnings are faily new to me (this is why I see a future soon).
I want kids but without proper training my kids will have to employe someone else to run my site for them.
Personaly I believe that my market will not die and increasingly grow over time because each child receives a new pc and each new child enters the world of cyber-space increasing my member database and flooding in more adsense rich traffic via word of mouth etc etc.
The future is Bright. Very bright in respect to growth.
---Added---
I estimate a profit of over 150,000$ per year, without advertising.
Total expence of running site per year would be around
4800$ per year.
Tax would vary.
With the power of advertising profits would be very high... minus the expence of advertising of course.
I would certainly be prepaired to sell the site right at this given moment for over 2,000,000$ but as i see a pickup in the next 6 months probably earning me 10x as much I would likely be asking for 50,000,000$ Personaly.
On the upside:
If you got to $1.2 million a year, a "normal" business valuation would put you at, say, 5x earnings. Some places with growth potential can go up to 10x earnings - so, if you can demonstrate that you own your niche, and there's still growth potential at your $1.2 million range, a big company could pick you up for $12 million.
Weblogs Inc. - pretty much the most or second most famous blog network, with something like 80-90 blogs was making about $2 million in revenue, and they sold for around $25 million to AOL. It was a hot property at the time.
These are the kind of numbers you might want to be considering, versus $50 million in the future. But it really depends.
Now for the downside:
Some AdSense businesses go for as little as 8 months revenue. I've sold some for that, but they were small sites, very vunerable in their niche. I didn't want to take the time to develop them further because I have other big sites that are generating more, and I only have a limited amount of time (and the revenue wasn't enough to hire it out.)
It doesn't sound like your business is like that, but its something you need to be aware of as you plan for the future.
Finally:
Just because you're making X amount with Y traffic does NOT mean that your ads will continue to pay out at the same rate!
Think of it this way: An advertiser has a budget of $1,000 a day (and that's huge, right?) Once you run out his ads... there's no more money available for that day. So overall your ads will pay lower at some point.
I've seen this already - these are totally artifical numbers BUT for example - with 1,000 visitors we get, say, $10 CPM, but with 3,000 visitors we get $6 CPM, and so on.
The point is unless you're doing CPM ads, you can't count on a 1 to 1 ratio - you're making $1,000 a month with 10,000 people does NOT automatically equal you'll make $10,000 a month with 100,000 people.
And look at MySpace - their CPM ads are in the toilet, so what good does 68 million users do at $0.10 a CPM? Because you've added MASSIVELY to the overhead of the website, to the spam problems and bandwidth and other violations... but you're not getting the same return for your effort, you're just increasing the overhead and decreasing profit.
Just some things for all of us to consider as you ramp up to your future...
Not bad for a domain squatter monetizing with AdSense.
EFV -- I'd be interested in buying an adsense businesses at 2x a month's earnings. are you selling?
If Google is serious about partnering with publishers in the long run rather than have us see our own advertising, there's going to have to be some long term value.
europeforvisitors writes:
...so their opinions are worth reading.
