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Tomorrows Tax Day, Don't Pay, I'm Certain

Mon, 14 Apr 2008 11:50:00 -0400
“Certainty? In this world nothing is certain but death and taxes.” Except for not patenting electricity Benjamin Franklin is usually correct.

In regards to the life cycle of your web hosting company his timing is impeccable.

Your company should do everything possible not to pay taxes. You can either give it to the government, great benefit there, or grow your business and hence the economy. Hire more employees (let them pay taxes), spend money on capital equipment and that whole channel line pays taxes. But remember you don’t want your company to pay taxes. Not on April 15th.

Smart and profitable industrialists, hopefully like you, avoid taxes. That is one of the commanding reasons for acquiring a business. Most web host firms have lousy balance sheets. They have depreciated the assets and have nothing to shield profits, they pay taxes.

I always find it sort of magical that you can acquire an asset (buy a company) that was fully depreciated yesterday, put it on your balance sheet today (stepping up the assets as accounts say) and voila! you have a complete new depreciation schedule protecting your cash. Sort of like asparagus cropping up in the spring, where did that come from?

So you say…“I am profitable but don’t have any money to make an acquisition Tom”. Even a better reason to take out a government loan. That is exactly what not paying taxes is, a differed no interest loan from the government. And if you screw up sort of risk free.

Now Ben was correct…nothing is certain but death and taxes. In your case the death of your company. Don’t frown, this is just the end of the investment period…maybe the buyer of your company will keep the name, who cares?…your out. Now you want to pay a lot of taxes, big time taxes. You have taken those government loans and parlayed them into your success. As Franklin said taxes were certain, he just did not state when.

More about Tom:

New Commerce Communications

E-Mail Tom Direct

Fun Fact: Google's Revenue is $17,066 Per Server

Mon, 19 Mar 2007 19:52:00 -0400

I read about this on Bert Amijo's blog. 3Tera CEO Vlad Miloushev did the math:

1. Google's infrastructure consists of 500,000 to 1 million servers.

2. Google's Q4, 2006 revenue was $3.2 billion. On an annualized basis, that's $12.8 billion.

If you divide #2 by #1, you'd get $12,800 to $25,600 of revenue per server. If you take the average and divide the amount by 12, you'd end up with $1,422/month in sales for each server. Google spends about 10% of its revenue on operations, which equals $142 per server.

As a point of reference, let's consider HostGator's announcement that it will expand its presence at The Planet. HostGator currently leases 1,700 servers, which are home to 500,000 websites. That's 294 sites per server. If HostGator collected as little as $4.84 from each site owner, it'd generate more revenue per server than Google!

HostGator's cheapest service plan costs $6.95/month, but it allows customers paying $9.95 or more to host multiple sites. Which most - including HostGator's 10,000 resellers - do. So Brent doesn't have Larry and Sergey beat. Yet. But while I was doing the calculations above, I remembered a conversation with Lenkov from SiteKreator. Thanks to some kind of caching magic (which ISP-Planet discusses in this article), Lenkov's software can support up to 30,000 simple websites on a two CPU machine.

Let's say Brent springs for a quad core Clovertown from The Planet, hosts only 15,000 websites, and charges each site owner $1/month. This would put him ahead of Google in terms of both revenue/hosting expense ratio, and sales per server.

ISP-Planet says SiteKreator can be licensed for an "unpublished fee". I'll have to ask Lenkov about that...

When you are starting a web site, one of your chief concerns is stability. Any time that the web site spends offline as a result of technical problems is time that your customers are unable to use your site, and this is bad for your bottom line. Businesses tend to want the most stable operating system for their web sites to minimize the dreaded server crash.



Worried About Churn? Your Marketing Department Might Be the Culprit

Tue, 06 Mar 2007 19:22:00 -0400

So far this year, at least 31 web hosts and domain registrars (see list) have reduced prices or increased resource allocations. Here's a quick breakdown based on a few different parameters:

(a) 11 offers were limited time; 20 were permanent adjustments;

(b) 19 had monetary impact, 12 did not;

(c) 19 were available only to new customers, 11 were available to all customers; JaguarPC was the only company whose offer benefited just current customers;

(d) Only Netazen offered non-overage-incurring current customers any financial benefit.

If I look at these stats with my end user's hat on, I would conclude that bandwidth, data storage and domain registration fees must be getting cheaper by the minute. Unfortunately, if I stay with my current provider, the best I can hope for is an unneeded increase in resource allocations. Loyalty doesn't pay if I want a deal that reflects current market conditions.

Given the going price of AdWords bids, is it such a good idea to reward switching? Instead of offering new customers a discount during the initial months of their contracts, what about a reverse promo that gives long-time customers a better price after they've maintained their accounts for some amount of time?

Web Site Hosting and Optimization Tips

Thu, 06 Mar 2008 11:24:00 -0600
Find the best web site hosting, domain registration, search engine optimization tips tricks, tutorials and providers to help you create, host and manage your website or blog in an optimized and well monetized manner. Look to mytradedomain.com to guide you

Writing is something that has to be enjoyed. And with virtual web hosting, we have indeed enjoyed writing all that we know about it. We wish you also enjoyed yourself.
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