Issue #323

Sent to members on October 7, 2019

How a million-dollar sale blew up in my face

So, it was around the year 2000. Yep, long ago. I was only a bit over 2 years into running my technology blog. And another big thing that was happening was the massive dot-com bubble.

Essentially, anything on the internet was supposed to be “pure gold”.  And so it was that this company called eFront Media had a novel idea. They would buy up a bunch of sites getting traffic and compile them into a big network and run ads all over them and laugh all the way to the bank.

And, in 2000, my site was one of their acquisitions. I was a 21 year old punk kid. Didn’t know my ass from a hole in the ground when it came to business. All I saw was a figure close to a million bucks and I had visions of being rich, baby!

So, I signed and they acquired my site. I continued to run it.

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Now, that million bucks was pretty much paper value, as were most things back then online. (Hell, this still happens like crazy in Silicone Valley, who are we kidding). So, they were making cash payments to me each month up to a certain amount. Then, the rest would be in stock options.

Stock options. To a company that was not – and never would be – a public company. Good times. 😉

It was OK for awhile. I mean, they were sending me checks upwards of $8,000/month for a little while. And especially at that age, that’s some serious money.

But, then that bubble started to pop. And shit got real.

eFront Media started having big problems paying it’s bills. That meant they weren’t paying me anything. A bunch of other site owners with eFront started to talk and I was definitely not the only one.

The whole time, they were littering up the site with banner ads. Whatever revenue was being generated, they were keeping it. Not dishing it back out again.

Oh, and my site (which was legally their’s, of course) was on their server. Which means even though they were in breach of contract, they had my site. They owned my domain.

Then, it got even more dramatic…

There were leaks from inside the company. And one of them was a massive hack job into the computer of the CEO. They hacked his ICQ chat logs. Remember ICQ? And they published the chat logs. Conversations of him wheeling and deeling on how to deal with us publishers, how to get out of paying, etc. Oh, and on top of all this, there was even some salacious logs of him chatting with a girl. Don’t know the story on that one.

Long story short…

There was a guy within the company who saw what was happening here. And, by now, I had a lawyer draft up a threatening letter holding them in breach. With the help of the guy inside the company, I got the domain transferred back to me. And I had already logged into their servers and basically “stole” my own site back. Just downloaded the whole thing and transferred it back to my own server. The domain was the last thing I needed – and I got it.

Now, here’s how this affected everything moving forward…

That company – and my position during the drama – was one MASSIVE example of why you cannot – and should not – rely on banner ad revenue to monetize a site.

They were reliant on ads. Whatever was being made off my site was being kept by them. And it obviously wasn’t nearly enough to stay afloat.

In the meantime, I was making jack-crap. So, what did I do?

I decided to start selling things directly on my own site. I couldn’t do anything about the ads at this point for legal reasons, but since they were so busy dealing with their own problems, I began putting some things on the site to sell directly.

I eventually created a few books, some DVD training videos, etc.

So, that experience of having advertising blow up in my face basically FORCED me into selling things directly on the site.

And that’s why today I am pretty vocal about saying that banner advertising as a way to monetize a blog is pretty stupid.

It’s even worse today. Payouts rates for banner ads to publishers are much lower today than they were back then.

I’m not saying there is no place for hosting advertising on your site, but the efficiency and revenue potential of having your own in-house revenue streams blows advertising away. It means you control your own destiny.

The problem with my tech site back then was that the only real value to the site was in the traffic. And the value of traffic has decreased.

But, when you build a list and build your own customer base, the value increases. And you’re not reliant on anybody.

Today, when a person joins THE LAB to learn how to build a blog-based business, it comes out of stories like this one. I have over 20 years of experience in this… and I’ve seen a lot of things come and go. I know full-well why having actual business fundamentals is so important. The only reason I’m still doing what I do today is because I pivoted so quickly into direct product sales in the early days. I was one of the first tech blogs to do this… and it was only because I was forced to because of the circumstances.

What I teach inside THE LAB is how to build, grow and scale a REAL business based on a blog. An actual business.

It has staying power, too. I’m kind of the longevity guy here. Even Blog Marketing Academy has been around 11 years now. And, I’d much rather have a business that has staying power to fuel the life you want to live… than one which is heavily reliant on external circumstances that could change unexpectedly.

What about you?

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