This might come as a shock to some, Graham is looking for potential buyers of the Entrecard network. It has been talked about amongst several users as a way to increase exposure and add the possibility of a new direction from a new owner. Either way, it was bound to go on sale sometime.
Graham insists the sale will only be made if the buyer agrees to certain terms, such as keeping the mods, having a direction, and basically the normal not screwing up the system. However, he does offer four ways to monetize the system:
- Credit transfer tax – Charge $1.00 for every 1,000 credits transferred.
My reaction: Fine by me. There isn’t too many transfers going on between separate individuals except for buying and selling. Most other transfers are simply the same owner sending credits to another one of their sites.
- Monetize the ad network – EC to serve their own ads at a 25-33% rate on all widgets.
My reaction: I would dump Entrecard faster than the Democrats dumped their foreign policy.
- Implement a credit exchange – Force users to rely on Entrecard for their buying and selling needs and take a cut of the profits.
My reaction: This is probably the *best* option in my opinion and should have been added long ago. There is simply no reason why a tax shouldn’t be added.
- Listing fees in the marketplace – Charge users to list their products and services within the marketplace.
My reaction: This isn’t a real answer unless the network grows further and credit transfers are allowed through the marketplace. If not, then the marketplace would simply move to another forum.
My only question is, if Graham knows how to monetize Entrecard, why hasn’t he yet? Yes, it is Phirate doing the coding (is he even still around?), but monetization should have been the first item on the menu.
The current asking price is $100,000. He lists the stats as:
- Uniques/Month: 85,000
- Page views/month: 3,250,000
- Monthly Revenue: $2000
Which, quite frankly, is a shock in two ways. 1) I thought there would be far more uniques/month. And 2) The monthly revenue is higher than I expected. I imagine it is $1000 from the ad blocks and featured listing, but where is the rest coming from? AdSense and credit sales?
With a new owner, they will surely shake things up. A new design, more coders, and most definitely new monetization will be on the short list. The question will be, what will their philosophy consist of? Will it be purely in favor of bloggers? Will they take more of an interest in their community than what Graham has shown?
Only time will tell.
So my question for you is, will you dump Entrecard if Graham sells?
Written: Sep 25, 2008
Brandi
September 25, 2008 @ 8:27 pm
This disheartens me. Not because I so “love” Entrecard, but I have really come to like it and appreciate it. It’s not covered with ads, the platform is fairly easy to learn and use, and it really does have bloggers in mind. It also is awesome for a brand new blog starting out to get exposure, without having to create groups or neighborhoods, etc. I think Graham has done a really good job with it, and I really have enjoyed it, just the way it is.
If it switches hands, I’m not so sure. It depends on what they do with it. I know at 100k, they will want to monetize it in order to make the expense with it, though I don’t want to see someone use it to sell out and be another ad-driven, eCommerce site of some sort, having the only goal of making money.
I don’t know. We’ll really have to see.
nukeit
September 25, 2008 @ 10:21 pm
Gary, I really think it depends on who buys it and whether or not they keep promises made to Graham and for how long. Seems to me they would likely pay him off later or dump it off on someone else who doesn’t care about it the way he does.
@Brandi – Excellent points all around. I too fear the day when all those widgets out there turn to ads for irrelevant products.
Margaret
September 26, 2008 @ 4:19 am
I think Graham has made a tough sell for himself. Imposing all these “rules” and restrictions on potential buyers is probably going to keep them away IMO, yeah they could do a buy-and-sell to rid themselves of those restrictions, but that just adds more cost to the endeavor and frankly, it’s not that tempting of a deal to begin with.
I’m also reading in the forums where Stan of Fantasy Baseball is trying to get together a group of ECarders to facilitate a purchase, but they will need a very strong individual at the helm to keep the diversified group that’s currently throwing hats into the ring focused and in agreement on things.
No, I’m afraid Entrecard is headed out unless Graham has a change of heart and gets over his disappointment with the last VC attempt. It’s business and if you are going to let every little downturn crush you like that you have no place in business.
But then, I’m an old fart who’s been around the block a time or two, so it’s easy for me to say “suck it up”. At 27, I probably would have cried, too, but then again, I’m a woman and had PMS…..
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Harish
September 26, 2008 @ 9:42 am
Entre card probably is a good service.But what is the idea behind graham selling it.Probably If He sells it a big company will buy it.My opinion is that Graham must change his mind from selling it.
Carol
September 26, 2008 @ 11:14 am
If it does get sold, I am afraid what would happen is what seems to happen in many places now. They try to make it better, and only end up making it harder to use, or more expensive. I guess this is like flipping houses, only it’s a dot com. IF IT AIN’T BROKE, DON’T FIX IT would be my advice should they sell.
Kris
September 26, 2008 @ 12:51 pm
If I had that kind of money I’d buy Entrecard myself. Are there some top Entrecard people who are making lots of money who could go in business together to buy Entrecard in order to keep the system and philosophy in place. There are plenty of ways to monetize it while still keeping it free for bloggers to post and adversitise their blogs on other blogs. The system works great!
Gary R. Hess
September 26, 2008 @ 1:16 pm
Stan and Co. (I like that name btw) wouldn’t be the only group holding shares. Phirate owns a major part of Entrecard, so if there was a sale, Phirate would have the largest say and would do most of the decision making (if he wanted).
As for monetizing it, well, if the only change made was forcing people to buy through Entrecard (by either taxing or direct), I’m not sure how much money would be raised.
From the stats only 85,000 uniques were there. That is 2,833/day–not exactly a big number. Generally, you want to look at a 5%-10% return (although that would be hard to do monthly with EC’s business). So we are looking at $4250-$8500 extra per month tops. So at most, that’s $12,000.
At that, (without giving Phirate his share, since I have no clue what percent he takes) that is 8.33 months to get back what you put in. Say Phirate owns 20%. That’s 10.4 months minimum that you would get your money back. And that is if everyone works for free during that period and you make the 10% each month (which is highly doubtful).
That means, if you get the minimum percent, it will take 20.8 months. (This of course isn’t including growth rates or possibilities).
Oh, and none of this is considering server costs, advertising, amazonaws, etc.
It would be a nice buy for someone with a clear vision and money to spend, but I don’t think it would be worth it otherwise at this point. At 2,833 uniques/day, you would probably be better off spending your $100,000 re-inventing EC on your own, choosing a different name, redoing the entire system, and putting it somewhere else.
Hicham
September 26, 2008 @ 7:59 pm
It all depends on how the new owner ‘if any’ shall deal with the whole system so we can’t judge till we read the whole story officially over ‘EntreCard’
Dennis Edell
September 27, 2008 @ 12:03 am
The toolbar is why the site itself is almost useless for traffic, Graham stated that clearly….get rid of it.