M. Taon, do not confuse cost with value. ET is not worth a pitcher of warm spit, to quote John Nance Garner. Consider a really classily nasty porno site which caters cuntingly to your particular fetish. I have paid as much as $35 (US) on occasion to gain a month's access to such an art gallery's archive of mentally tasty confections. Such sites accept no external advertising. Why not? Because their customers would not tolerate ad banners strung across the cuntent. Nothing like advertising to rune the mood. And because they are not marginal enterprises. ET is. If ET charged, I would delete its bookmark and never miss it. Possibly because I don't recall that any ET content ever made my dick hard. Certainly because ET content never made me any money.
I would do the same. But it would be interesting to know how many members would actually be willing to pay.
That is for businesses do not have such a high profit margin. For instance...if there is a business that does 2 million in sales, but their profit margin is 15%, thats only $300k per year which means the business would likely only get $2-3 million. (10-15% ROI) But a site like ET where its all advertising revenue and profit margins are probably around 80-90%, you would get alot more for the business. Assuming ET takes home $500k per year in profit, that would value the business to at least $5 million for a 10% ROI. I dont know the actual numbers of ET though, so I cant say for sure, but I know this site would be a bargin at 1 million and baron even said he turned down 4.5 million once.
I've always gotten the impression that it's not a high-traffic site. I'm on other forums where there are posts updated/new posts created every 5-10s, which you obviously don't see here. Currently Active Users: 414 (this includes bots and crawlers) Busy forums have 3k+ active users at any given time. I think the demographic of ET begs a premium, but definitely not the eyeballs.
You're saying ET is worth nothing because nobody would pay for a monthly subscription if we decided to charge for it. That's not our business model anyway, so your post makes no sense. It's like saying if Google decided to charge people for every search they make, nobody would pay for that. So what? That's not Google's business model so it's a moot point.
We cater to a niche audience, which is why is not "high traffic" compared to a much more popular subject. For example, you could start a forum strictly on debating Politics and Religion and it could become extremely high traffic site because everybody has an opinion on those subjects. But that doesn't mean much because the broader the audience, the more difficult it is to monetize. I've seen posts from admins of other message boards who have 10 times the traffic we do, and their posts are in regards to not even being able to make enough money to cover their hosting costs. Why? Because raw traffic doesn't mean much, and it doesn't necessarily convert to $$$.
Easy. 13 years of consecutive net income growth, good margins, loyal advertisers, a great group of members and mods, and good search engine ranking across many key terms. It's a pretty simple analysis at the end of the day.
Baron has just provided a valuable lesson on making money with internet sites. It is amazing how clueless some posters are, not just in a trading sense, but in the general sense of how to assess value or make a business decision. If you ever thought this site had "zero" value or was worth only 1 million you are basically hopeless.
Totally agree. I own a managed hosting/colocation company and I hear this same approach from a number of our clients with communities.