Do you continue promotions on a site/biz - w/ net loss?
 

If you are spending advertising dollars on a site, tryign to acquire customers/leads/data and you're currently not making a profit, do you continue for long term benifit?


Ex.

Owner is paying avg. $.3 per signup he can get to his new site "hotmail".
The avg. user makes him $.03/yr.

Four years down the road, MS pays $1.4/per user.

These numbers are fake, just curious on your thoughts.

Would you try to rapidly grow a site at a short term net loss for long term gains? Be it outright sale, or just converting at a later date.

Discussion is encouraged! :)

Business forum and all the business threads = ignored :(

You forgot to put DRAMA or (pics) in the title. :1orglaugh :1orglaugh

And yes it sometimes pays off to operate at a loss for long term gain. Most businesses due this at the start.

Look at "Ask Jeeves" sold for almost 2 billion dollars yesterday. How long will that business be in a loss till it can turn a profit?

I agree.

And it's my intention for certain ventures. However some have a hard time seeing past "net loss" from the get-go.

This is just so common in B&M, with online we have much smaller initial investments so an ROI is in most cases easier to grasp.

many business operate at cost for years at times. Its when the business cant float itself and you have to pay out of pocket each month for an extended period is when you are in trouble. Sometimes you have to have patience to see the big picture.

Duke

This is why the tax laws allow for 5 years of claiming a loss. Sometimes it takes that long to gain the first profit.

Slow and steady builds a stronger business. :thumbsup