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Preparing for the next burst bubble - Protecting Income

How some companys may already be doing it

6:38 pm on Sep 25, 2012 (gmt 0)

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We all remember the dot com bubble bursting - and the "sub-prime" debacle.
There are numerous accounts (on this forum and others) about how advertising revenues have fallen off.
Seeing that that is how many site members earn a living, that scenario is really scary, especially in this economic climate.

What in the world is going on?

Lets look at Facebook for a few clues.
They did an IPO at a price that was (in the opinion of everyone who was NOT a broker selling the IPO stock or the victims of these brokers) "somewhat overpriced".
Please remember that these are the exact same brokers that invented the "sub-prime" "instrument" that caused the financial screwup of 2008.
So Mr Zuckerberg is now uber rich and schmoozing with the "broker" gang. But essentially he has lost touch with his company and it is running wild.
Try using the Facebook Login on your site - the code that is now available is buggy and the "help/how to" pages are for previous versions or the links just do not work.
Seems like the technical boys and girls are celebrating / spending their IPO bonuses and the whole lot is falling apart.

Now it would appear that Facebook has not got an iron lock on all the information within the company because somehow it leaked out that the advertising models that the brokers were using to estimate growth and profits were "somewhat flawed".

Essentially the issue is that the Facebook membership is moving away from large format devices (pc's, laptops) and using small format devices (cell phones, pda's etc) which ARE NOT REALLY SUITABLE FOR ADVERT DISPLAYS

So, that is a triple whammy
  • a development staff that are not delivering usable and reliable core functionality - in fact they are rendering what was there unusable
  • an IPO that was hyped out of this world, leaving shareholders that are somewhat "annoyed" at the performance of the share
  • an advertising strategy that has no hope of fulfilling the promises sucked out of the thumbs of the brokers and their spin doctors when they put the IPO together

Now Facebook has to bring their side - they have to pay the dividends promised at IPO time.
Add to that, advertising revenues are shrinking due to the ongoing economic climate AND the fact that no-one has effectively resolved the problem of putting adverts on small format devices - even just putting normal content on these devices is in most cases a mission.

So, the next step will be that the "financial experts and advisers" (some of which are probably the brokers who were promoted due to the "incredible success" of the IPO) will be called in.

This gang will very quickly figure out that they are not going to be able to bring more income into the company, they are going to have to do some "internal redirection" and the only place to do that is with the only source of income, the advertising.

How are they going to do that?

Pretty easily as it turns out.
Remember that there is no way for you to find out what ads were placed in your earning space, who the advertisers were, what type of ads (CPC, CPM) they were and what the money amount was.
Also, there is no way for the advertiser to know where his ads were placed.
Ads will be sold as normal.
Ads will be placed as normal.

All the "MAGIC" will happen during the accounting step.

The process is as follows:
  • Your part of ANY CPM ad will just get reduces - you don't know what the bids were - you just have to accept what they say.
  • If the ad is a CPC ad and IS NOT clicked you do not earn anything anyway
  • If the ad is a CPC ad and IS clicked you will only get every 10th (or whatever) one given to you as a CPC ad clicked (where your share will be "adjusted") and the rest of the time you will be given CPM ad revenue (.005 cents each)

Impossible? Not at all.
Worthwhile? Definitely!
Already happening? In all probability, yes.

Now I have to say that in my opinion, ALL politicians lie (Hint: Monica, WMD) and EVERYONE in the banking / brokerage sectors would not know the truth if it grabbed them by the gonads and twisted real hard. (Bernie Madoff, Barklays Bank, Enron...) And that applies equally to the majority of companies that are "listed" (Hello Mark - fancy meeting you here.)

And the reason that will be given for NOT making full disclosure as far as this subject is concerned will be something along the lines of "we cannot do that because we have to protect our competitive edge and intellectual property".


If you believe that then get in touch!
2nd hand bridge for sale in California. Just been painted red.
Yours for 1.5 million cash - real bargain!

Now how does this slot in to what we know about the biggest advert placement company (along with sooooooooooooo much more) out there?
8:10 pm on Sept 25, 2012 (gmt 0)

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Where's the "like" button for this post?
8:31 pm on Sept 25, 2012 (gmt 0)

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WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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Like would be too short and inadequate a word..:)
8:48 pm on Sept 25, 2012 (gmt 0)

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Thanks for taking the time to share this with us. Great post.

9:11 pm on Sept 25, 2012 (gmt 0)

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I feel alive, reinforcements have arrived :) ...so much so that I'm posting from my tiny mobile device because I'm away from PC.
5:33 am on Sept 26, 2012 (gmt 0)

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Thanks guys
The tirade is a result of a "robot moment" and I am sorry if it is a post more suited for a blog but...
Robot Moment
You are sitting stuck in the traffic, casually checking out the hot blond in the sports car next to you who is absent-mindedly picking her nose when there is a bolt of lightning and suddenly a whole bunch of seemingly random facts, issues, comments or whatever just fall into place and the light goes on.
4:48 pm on Sept 26, 2012 (gmt 0)

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I'm taking the time to re-read this post this morning and I have a question. What would you consider to be the point when the bubble bursts? What would be a telltale sign that the threshold has been crossed such as last month we were not there but this month we are?

As far as I can see the bubble already burst back in 2008 when the DJIA dropped 7% when it peeled off 777 points, that was a burst. (I luv those numbers btw, beautiful choreography).

Also, what was the effect of the last one back in, was it 2003 I think? It didn't really stop internet growth. What it did affect was it caused venture capitalists to back off injecting money into companies that were only flying based on ideas rather than concrete business plans. The mood of the time was that if it's on the internet it's going to be wildly successful so VCs were throwing money at charlatans. Of course it had to burst.

Whereas since then the internet has matured, and legitimate businesses migrated to the internet en masse. That has created a stable perception that the internet is legitimate and useful for commerce but it's not a one-size-fits-all situation.

Needless to say there are still going to cases like the one you point out such as facebook but don't you think they are the exception rather than the rule?
7:24 pm on Sept 26, 2012 (gmt 0)

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Am I in the Twilight Zone?
8:01 pm on Sept 26, 2012 (gmt 0)

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We don't so much have a bubble, we have a manufactured market. High frequency trading algorithms are near 70% of the volume on any given trading day in every major market (nasdaq, NYSE, etc.).

The money to fund these algorithmic trading accounts is coming directly from central banks (The Fed and ECB) via "asset" purchases and swaps, this is where the insolvent banks take their worthless mortgage backed securities and put them up for collateral at a central bank who then lends them real money (via currency debasement) at near zero interest rates for their worthless paper, it's known that the federal reserve bank has lent out over 16 trillion dollars to foreign and domestic banks since the meltdown/heist of 2008. That money has to go somewhere to chase a yield so it goes into the "markets". With all that free money being thrown at stocks you get crazy stuff like Apple having a market cap of near a trillion dollars, this differs in my opinion from a bubble, this is levitation, as long as free money is being pumped into degenerate gambling/banking concerns the levitation will continue. So, really folks welcome to the centrally planned economy on steroids. It should be fun while it lasts.

And remember every time you hear that they are "pumping money into the economy" to check your bank accounts, they don't mean YOU, what they mean is that they are pumping more money into insolvent, degenerate banks so they can go play in the casino called "the markets".

If you have further interest, poke around for info on "high frequency trading".
10:22 pm on Sept 26, 2012 (gmt 0)

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We don't so much have a bubble, we have a manufactured market. High frequency trading algorithms are near 70% of the volume on any given trading day in every major market (nasdaq, NYSE, etc.).

At first I couldn't understand that statement but I was thinking "manufactured economy" rather than manufactured market like you said. When I got it, it brought to mind a talk on TED by Kevin Slavin: How algorithms shape our world. His presentation is very good and confirms what you are saying -- 70% of trades are actually controlled by black box trading -- a computer algorithm unleashed.
10:30 pm on Sept 26, 2012 (gmt 0)

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Am I in the Twilight Zone?

Oh yeah and Innovate, you would know better than us if you are in the twilight zone -- that video I mentioned above points to it on the map at the 11:57 mark.
4:28 pm on Sept 27, 2012 (gmt 0)

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Hi All
Please do not think even for one second that I am any sort of guru or that I have some magical formula that will precisely determine when what will happen
I don't!
I am the head of my family and as such it is my responsibility to ensure that the income that my family needs to survive is secure.
To do this, I need to do some "forward thinking" and run some "what ifs", see what the results are and if they are not good for me, either get out of the situation or get some kind of crash helmet.

The big dotcom bubble put an end to a large amount of "everybody" in the dotcom industry.
Many fell, some were badly wounded but survived and there were even some that profited big time because someone had had the intelligence to look beyond the hype and study the figures BEFORE the whole thing exploded
Amazon for example went thru the roof as far as I have been told all thru the bubble burst.
And there were a whole bunch of others who also made good.
Someone had ignored the hype, diligently done a "risk/reward" analysis, identified the problems and the opportunities and acted on them BEFORE the shit hit the fan.

And in hind sight, almost everyone would agree that giving a brand new "company" that has an unproven idea, not one brick nor square inch of land or any other assets a valuation in the millions, if not hundreds of millions takes the meaning of "stupid" to altogether new levels.
And there were hundreds of thousands of these "visionary" startups that never started up.

Enron was similar - in hind sight everyone can plainly see that there was no ways it could work sustainably.

The Wall Street fiasco started when some greedy idiot say that he could raise mortgages that were doomed to fail, then wrap them up in bundles of spin and sell them to Joe Public who would take the knock WHEN they failed.

The mistake that the Wall Street Robber Barons made was that they started believing their own hype and started buying these "fantastic investment opportunities" themselves.

In each case, any normally intelligent person could easily see that something was seriously screwed up and the so called leaders and gurus were speaking pure crap if they had bothered to look behind all the hype and bullshit.
If they had had the backbone, by challenging the "gurus" and "leaders" the whole mess may have been headed off at the pass.
The problem was that everyone was too greedy and making too much money to even consider that it was all a cross between a ponzi scheme and a downright fraud.
(mmm... I seem to remember that a certain Bernie Madoff was also considered to be a "guru"....)
(Big reason that I don't want to be known as a "guru" of anything!)

So, to bring it forward.
As far as I can see the bubble already burst back in 2008...

Yes, that was one bubble - a big one - hopefully from here on in, they reduce in size and frequency.

It didn't really stop internet growth.

No it did not stop the internet - The only thing that will stop the internet (as we know it) will be if Congress passes anything that looks like SOPA, PIPA and all the other "Lets chuck free speech out the window to please the businessmen who have bought us" bills.

And if the US does commit internet suicide, it wont be long before the rest of the world tells the US to put the gag bill where the sun does not shine because the cost to implement anything that looks like SOPA/PIPA or to enforce it will be ridiculous.

So, the US will then strong-arm the rest of the world because of a little known "snippet of info" which may be the topic of another thread.
Effectively the Government of the United States of America has complete and total control over the internet.

Let me explain how:
  • All Top Level Domain Registrars are under the control of ICANN - ICANN DOES have the power to "switch off" every .com or indeed .anything should they feel the need to.
  • ICANN is controlled by the Pentagon - everyone denies it but personally I did not believe the "WMD" and "I did not have sexual relations..." stories either.
  • So, once the edited and re-spun version of SOPA/PIPA (lets call it the "SpeechBuster" Act)is passed, some Congressman will be told (by the record label that showered him with money so that he could win the last election) that they think that abcde.com is in violation of the "SpeechBuster" Act and in their opinion it is a matter of "National Security".
  • So a secret meeting is held, abcde.com is found guilty of using the color pink in their logo which will confuse children and lead them away from the site they need to be (the record label) and instead will corrupt their morals
  • All the paperwork is done and then..........
  • The "com" TLD managers are told to remove abcde.com and at the same time they are slapped with a gag order enforceable under the Patriot Act.
  • The "com" TLD people are definitely not happy and refuse to do it.
  • The US Government gets hold of the Pentagon who log into the ICANN system and the entire "com" TLD goes dark until they comply

The above will happen once - thereafter, every "remove" request will be rapidly expedited and no-one will be any the wiser.
Except the poor sod whose website it is.
It is an unfortunate fact of life that although the internet is "unbreakable", the DNS system is NOT - it is VERY much under the control of the Pentagon.

And an alternative to the current DNS system is definitely a discussion for another time.

...has created a stable perception that the internet is legitimate and useful for commerce

It is stable because the perception is that it is stable.
To most people, the internet and the world wide web are one and the same - BUT that is the PERCEPTION
The Internet is definitely stable - it was designed to be stable and keep on working.
The Domain Name service which operates on top of the internet protocol is IS stable at this time - that is true.
That is why the perception that the web is a stable platform is not really challenged.
However, should the "SpeechBuster" Act become law, the Domain Name service is immediately under such a dangerous threat that everyone that earns the family food doing anything connected to the web is at a serious or even dire long term risk.

Just think about it... the "SpeechBuster" Act is not even here yet and there have already been numerous cases of sites being disabled by the FBI, CIA or whatever arm of the US Government was involved.

Should it be possible to shut down websites for various reasons? I vote a resounding "Yes".
Should it be done in secrecy and under threat of jail time for treason if you talk about it? Definitely NOT !

What we need is an International Internet Arbitrator to handle the problems.

Or we need an REAL alternative to the current Domain Name system.

Needless to say there are still going to cases like the one you point out such as facebook but don't you think they are the exception rather than the rule?

No! - They are definitely not the "exception".
I used Facebook in my explanation because they are the one that all this stuff is happening to and who is the most public.
However please recognize that there is a rather much larger "elephant" in the room - one who is rather better at preventing "dangerous" information from getting out there.
  • And most of us are interacting with said elephant in thousands of small and different ways every day as we work to earn our income.
    And said elephant is the largest advert middlemen.
  • And guys are getting their ad accounts cancelled in large numbers.
  • And they are not understanding why.
  • And some have got up to 180 individual domains all running out of one ad account and lost all the income in one blow

SERIOUSLY! 180 domains? I didn't know that that many eggs even fitted into one basket.

If I remember correctly, the guy mentioned $12k plus income - thats some serious impressions - and with one form email, all those impressions were released so that they could be used at top/bottom and right of search results pages.

Very good news for the nett profit and excellent news for the shareholders.

Not so good for some of us though!

Now I am not an accountant so I would not know where to look for the figures but seeing that the elephant is a publicly listed company, the financial statements should be available somewhere.
Hopefully there is someone who can take the last 5 years results and put them thru a food processor and see what comes out.
Essentially, if the nett profit increases year on year by a percentage while the gross turnover increases by a lesser percentage, it stands to reason that somewhere between the gross income and the nett profit, an expense has been reduced.

I wonder if the unexplained dumping of advertising display partners (some who have been there since day 1) without a reasonable and meaningful explanation has anything to do with it -- -- -- just a thought!

Maybe I am wrong - to be honest with you all, I hope I am - however, I am not going to hold my breath waiting for someone to "CUTT" us a break and let us have the facts and not some sanitized garbage hype that is just more of the same old.

Where is the internet/WWW going? That answer is worth BBBBillions but I have absolutely no clue.

When I started this thread I wanted it to go in the direction of "how to build multiple business entities each with less than 10 sites generating income streams".

Where is it in reality?
Financial skulduggery, fraudulent activity, collusion, thievery and who knows what else!
All we now need is "Roswell" and "the gunman on the grassy knoll" and its all here.

Don't you just love the way the internet works?
8:31 am on Sept 28, 2012 (gmt 0)

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So lets start looking a Protecting Income
Now there are a number of ways to monetize your websites.
You can charge a fee to allow visitors to view your site or use a service provided by your site. (Simple - Membership Fees)
You can market and sell a service, software app or physical product/s on your site. (Simple - Online Marketing and Sales)
Or you can build up a site that has information that will draw users to the site and then allow adverts to be displayed on your site based on the content of the particular page being shown, thereby generating an income. (Simple - Just develop a killer content site)

If it was all so "simple", everyone would be doing it!
The fact of the matter is that a lot of "everyone"'s are doing it - well, trying to at least.
Some are succeeding, some are not. And not every attempt by the successful ones succeeds either.

Lets call our intrepid entrepreneur Harry Blogs - married, 2.4 children, owns his own house and is incredibly bored with his job.

For the last 2 years, Harry has been developing one site per month - regular as clockwork, and he seems to have cracked the "finding" technique and his "content" technique has also become pretty refined.
Now about 14 of these sites are regularly earning better than $100 a month in advertising revenue with Elephant.

Recently one of Harry's buddies sent him a link for an article about some guy who had his advertising account closed down on all his (well over 100) sites and how this guy is now getting divorced, has a drinking problem and....

Suddenly Harry realized that his own little endeavor was actually making a rather significant contribution to the he and his family.

But how to prevent a disaster from happening to him started to become the question that he pondered more and more.
Eventually an "overall strategy" started to take shape - Start using a whole bunch of "BASKETS"
Whats this "BASKET" nonsense?
Essentially, if you only have one advert account and are running 24 sites through it, then if that account is shut down, you loose ALL your income.
However, if you have 4 accounts and each account has 6 sites, shutting down one account is not as big a disaster.

Cool! Lets go and open up multiple accounts and start splitting things up - easy-peasy!
But it is not quite so easy - or so advisable.
Firstly, you as an individual are only allowed one account - EVER!
(Go read up on all the legal stuff on the elephant site - A lot of it is in "legalspeak" and you have to read it a bunch of times to understand it but it is advisable to make sure that you understand the "rules", event though one of the rules is that they can change the rules at any time without notification!)

Ouch! So Harry is not allowed to open a second account! Harry is screwed.
But maybe not.
Elephant deals with "legal entities" and no "legal entity" is allowed to have more than 1 account.
So the solution is to create a separate "legal entity" and let that "legal entity" do the interaction.

Put simply, Create a company (legal entity) and use the company (legal entity) to do everything.
Now this may be "the answer" but it has got thousands of pitfalls, any one of which may trip you up.

Different countries have different rules and ways of doing things.
Each state/county/province in each country may have different rules.
Different cities may have different rules.

Some rules favor you as the company owner/shareholder/proprietor/whatever and some do not.
Make sure that you understand them!

And when picking a name for your "legal entity", do NOT use names that are obviously trying to mask something or other - example "Protected Income LLC" would not be a good choice - nor would "Harrys Advertising Income #1 (Pty) Ltd" be very advisable.
Something like "Seedapple Investments LLC" would be better.

Step 1
Once you have figured out which "legal entity" would be the best for you, get it set up but for heavens sake be careful of things like audit requirements (means you will have to pay an auditor to sign off the books once a year which may be costly)
Also, make sure that you as the human being in the equation is insulated from the "legal entity" - you do not want a situation where something goes wrong, the site gets sued, the "legal entity" gets sues as the owner of the site and you get sued in your personal capacity as a shareholder or whatever in the "legal entity".
You are spending good money setting this whole thing up, do it properly and protect yourself!

Maybe it would be a good idea to find out some of the auditing companies or "man alone" auditors in your area and find out if you can do their site for them and they do your audit sign-offs. (and possibly give some advice along the way)
If you are able to swing something like this, it would be a good idea to put your absolute best work into such a site.

So for about $100, Harry has now got another site to do (the auditors site) and has a LLC, (PTY) Ltd or whatever "legal entity".
(Quick "heads up": make sure that the "legal entity" you decide on is able to operate bank accounts and other "useful" stuff.)

Step 2
The next thing to set up is some sort of financial transaction account.
It does not have to be a check account or a savings account or a credit card account specifically.
Nor does it have to be with one of the Wall Street Rapist banks - in fact, if it is with a local or regional credit union or building society all the better - you are keeping the money you pay in fees in your local area and community.

Be very careful of "minimum balance requirements", "transaction fees", "minimum transaction requirements" and the like - every financial institution needs to make money and at some time or other they ALL at some time or other get some a$$hole in charge that thinks he can "improve the bottom line" by screwing the customer.
And they get VERY creative with the names they give to these "rape fees" - one of my accounts suddenly started showing a "STD Acc Fee" and when I asked I was told that "In an effort to streamline the transaction processing, the bank had outsourced the transaction processing and this fee was raised to cover the cost". WTF? "Oh but it is standard practice to pass costs along to the client!" - YEA? Well, its MY standard practice to tell banks who try to screw me to "GET F@%$@#CKED" - especially when MY information and transaction details are being handled by third parties without my permission. 20 minutes later I walked out with my balance in my hand and the account closed.

ALWAYS check the fees that have been charged to your account each month and if there is something that is wrong, some fees are going up when the transaction count and total values have remained the same, query them. If you do not like the explanation or if they cannot/will not explain in detail what is going on, maybe it is time for a change.

Step 3
So now you have a "legal entity" and it has a bank account.
Next you need an email address - Please do not use any of the "normal" freemail services - they are not secure.
A large number of financial institutions offer a free email account to each account holder - if yours does, use that.
At this point, you sign up as a user with Elephant using your "legal entity" email account and name - Remember that the only place where your name and the name of the newly formed "legal entity" are linked is on the registration papers. NOWHERE ELSE ! Keep it this way.
Or you may want to register "legal entity".net (or whatever) in your name and then "sell" and transfer it to the company making sure that the the DNS record reflects that the ownership has changed.

Step 4
This often is where people screw themselves - they use the same physical and/or postal address for all their "legal entities" - its a dead giveaway!
So, what can be done?
Well, that depends on where you live and how creative you can get.
If you live in a house and you can name it "Joes Office Park" by putting up a small sign next to the letter box, you could use a postal address like "Suite 21, Second Floor, Joes Office Park, 1435 Somestreet, Sometown, Somestate, 16589, United States of America"

Should work pretty well!
Yea- Right!
If 1435 Somestreet is viewable on ElephantMaps Streetview then anyone can very quickly see than it is a single story residential home, not an office building with at least 2 floors.

If you live in a gated community that will not allow the streetview vehicle in, it will work.

The easiest one would be if you had a family member (Bob - your uncle) that does own a commercial property.
It should be the easiest thing in the world (if Bob agrees to it) to simply add a letterbox for "Business Suite 23".
And Bob's your uncle, (come on--- you must have seen that one coming!) you have a pretty valid postal address, and a physical address that will pass the streetview test.
Once you have it figured out, sign up as a user with Elephant using your "legal entity" persona.

Step 5
Now you need to transfer one of your good sites to "legal entity" - THE CORRECT WAY - DNS RECORD AND ALL.
Make up a couple of ads that match the existing ad sizes that tells everyone that the site has a new webmaster, that anyone wishing to advertise on the site must contact advertising@legalentity.net and some others and replace the current ads on the pages with those you have just created.
At the same time you can make all the "I'll do that later" mods and adjustments that you need to.
Then you put the site in your webmaster account, do the verification and wait for it to be properly worked over by the bot.
Then you apply for a nice shiny new ad account for your "legal entity" user name and point them to the site that has been transferred.
And hopefully you get your advert account.

Step 6
Start transferring from your personal stash "legal entity", doing the DNS record thing, making changes to the sites as needed, replacing current ads with "change of webmaster" notifications and placing "advertise here" ads, register in the webmaster account, submit sitemap, once the site is crawled, create Elephant ads and place them.
Maybe you have gotten some takers for your "advertise on this site" ads. Cool! Try to convert them because if you are clever and don't get conned into ridiculously low CPM rates, they should give you more income than the Elephant ads.
If they want a CPC model, you will have to come up with the necessary scripting to allow the clicks to be recorded, monitored and reported.

Cardinal Rules:
ALL payments for adverts are up front and cleared BEFORE THE FIRST AD IS DISPLAYED!

You may have a site that is able to generate income from in house ads that is greater than the income generated by Elephant ads.
If this is the situation, congratulations! You have hit the Holy Grail of monetizing websites !
But for us "normal" folk, we won't be that lucky.

One last note:
When transferring sites out of your personal "bucket" to your different "legal entities", try to keep type with type.
Before you create a "legal entity", think about what sites are going to be in there eventually.
Possibly name the "legal entity" appropriately.
As you transfer the sites in, create a bunch of "cross-links" - it an only be good because then visitors start moving around your sites and that can only improve earnings.

Lets use a "For Example" here:
You are passionate about wind surfing.
You have about 15 sites that are about some aspect of wind surfing, anything from a venue listing site to competition results to a what an I doing wrong forum to a blog site where you interview competitors and you even have a medical site that shows the basics of how to set an emergency splint on a broken leg.
You have set up Max Wind LLC and the associated bank account
Max Wind LLC has an Elephant ad account which pays into the Max Wind LLC bank account.
Max Wind LLC has a number of its own ad clients and distributes ads to all the Max Wind LLC sites - money goes to the Max Wind LLC bank account.
Your auditor is able to easily and accurately audit Max Wind LLC because everything goes through one bank account - he is happy.

Over time the #1 sail company has started advertising on your group of sites and the advertising has been effective.
And as usual the bean counters eventually get involved and start doing calculations.
  • They want to increase sales
  • To do that, they will have to increase advertising
  • That will cost more money ongoing.
  • Then they figure out that if they take the advertising spend for 5 years and use that to buy your sites, they will not have to keep spending - they will own the assets on which the adverts appear and that is cost effective.
  • They also realize that then they can stop competitors from advertising on these very popular sites.
  • Their market share increases which increases their turnover which increases the dividends which makes their shareholders extremely happy which earns then a big bonus and some equity in the company. Everyone is happy.

So they make you an offer you cannot refuse.
And you accept it.
Normally at this point, things start getting messy where you have over 100 domains and they want 15 of them - how do you accurately determine the profitability of only those 15 sites - its a mess and you will be beaten down as far as price goes.

But because those 15 sites (and only those 15 sites) are owned by Max Wind LLC and there are audited books, everything is simple, straight forward and accurate and you sell them Max Wind LLC.
One transaction and its done.
No transferring of domains, transferring of bank accounts, transferring of Elephant ad accounts or webmaster registrations, just the name of the owner of Max Wind LLC is changed.

If anyone has ever sold a bunch of active, income generating sites to a single "someone else" where the sites are owned by you and your bookkeeping system is is the back of a 30 pack of cigarettes and little squares of paper and "someone else" brings in his bean counter to verify everything and make sure that "someone else" was not getting ripped off.
I cancelled the deal - too much stress!
Then I started selling them one at a time - after the 3rd one, the bean counter was not a part of "someone else"'s team and eventually it was done.

It would have been FAR easier to just sell Max Wind LLC.

And most importantly, if Elephant had decided to close my Max Wind LLC ad account for some reason, I would 'only' be loosing the revenue from those 15 sites. My other 165 sites (divided into blocks of between 10 and 15 sites each) would NOT be affected

Now there are probably a number of things not yet take into account, a number of things that some may skip and all sorts of other stuff that may be useful.

I said before that I am definitely no "guru" - I'm just an a$$hole that got bit - BADLY - so whatever anyone does, PLEASE DO NOT accept anything that I have written as "gospel" - Ask yourself "Why", "What If" and a thousand other questions.
I see many articles about "niche" sites where the absolute emphasis is on key words.
For the development phase I will accept that keywords are very important.
However, as soon as you start the next "niche" site, ring fence and protect the previous one.
Otherwise you may loose the lot - that is not nice!
11:01 am on Sept 28, 2012 (gmt 0)

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WebmasterWorld Senior Member leosghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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We may be related....;))) did your dad, or uncle Bob, have a bike ?
6:13 pm on Sept 28, 2012 (gmt 0)

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No.... but I think Aunt Mary flew a bi-plane ;>}
8:35 pm on Dec 8, 2012 (gmt 0)

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I'm not qualified to add anything to this discussion but without a shred of doubt this should have appeared, and still should, on the home page of WW.

A major and controversial set of posts that affect anyone who has to deal with the elephant in the room. Thanks very much to the OP.