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Investing Money in the Internet space

ilias19760

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Feb 19, 2013
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Hello fastlaners,

Me and my partner are running a well established site in the programming industry. We have managed to finally make some decent amount of money with it after building for a few years.

We have accumulated a lump amount of money in the $50,000 range for this fiscal year. The company is in growth mode and at the same time we do not need to withdraw money from it, so we would like to reinvest it in the business (we obviously prefer to reinvest instead of destroying value by paying taxes).

Let me tell you what we have done so far:

We are investing in Intellectual Property (content etc.), but this does not move the needle.

We have searched for other websites to buy via marketplaces (like flippa, empireflippers, and latonas) but they suck major a$$.

We have directly contacted other website owners in the space we operate, but they have all declined our offers (in this niche they are very emotional with their sites, well I am guilty of that too).

So now, the only thing we can think of is advertising in Twitter/Facebook in order to increase our newsletter subscriber count.

Any suggestions and comments would be greatly appreciated. Thank you for your time.
 
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theag

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Jan 19, 2012
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Not sure what you want to hear. If you can grow your business with paid advertising and convert that traffic, then do it. If not, build a new business with the profits.
 

krnekdo

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Jul 29, 2014
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We have searched for other websites to buy via marketplaces (like flippa, empireflippers, and latonas) but they suck major a$$.

How did you get to this conclusion? I have been buying and selling there for years and have only good experience. Granted, you need to do a lot of due dilligence, but you have to do that with any business purchase you make..

Contacting owners directly isn't a viable solutions because if they wanted to sell, they would let people know via marketplaces or forums. You might find potential sellers this way but you will need to contact many people to get one. Tried and tested :)
 

ilias19760

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Feb 19, 2013
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Hello guys, thank you for the responses.

Our main concern is that a big percentage of the existing cash value will evaporate by paying taxes on the earnings. We would rather convert that to some form of residual value.

@theag
We can grow the business with paid advertising but this will not move the needle as much as we want. Starting a new business is not really optimal, since that will take a lot of time to gain traction and also carries much more risk than investing in an established venture.

@krnekdo
We do not have any issue with DD. DD has averted us from there.
Sites at EF are mainly low-end, low-quality sites that are a step away from being penalized by google.
Flippa is abundant with crappy sites that claim ridiculous earnings. Granted, there are more high-end ones, but you have to pry there and then compete furiously with a bunch of other buyers, which pump valuation to over 30 times monthly earnings (unbalanced risk+effort/reward).
If I may ask, which one of those do you use? Do you another marketplace in mind?
 
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krnekdo

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Jul 29, 2014
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I use Flippa. Monthly earnings are not always the thing to look at.. It can be assets that you get with the property or something similar. Most people on Flippa don't have $5k to spend so if you are looking into buying something for $50k, then your competition will become very small very fast.

But yes, you do have to search for good deals, they don't pop up every day.. That is how it is in every niche or business, deals aren't served every day, but if you take your time and wait for them, then they will come along.

As for DD (you do mean due diligence, correct?) I don't know from where it has averted you..
 

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