Friday, September 26, 2008

Entrecard Up for Sale - What's Next for the System?

Yesterday, Graham put his site up for sale, with a starting price of $100,000 and a "buy" price upwards of that, into the $xxx,xxx amount.

Initially, my reaction was that he was deserting the community that he had tried to build up over the past year or so, and that the system would go down the drain with prices that either skyrocket or alternatively, are worth nothing, meaning the entire service is worth nothing.

The two main ways to save/buy the system that have been proposed: a new owner or company buys the site and all of its features, taking full control of the system, or Graham stays in charge, but receives financial backing and employees, through capital and funding.

Each option will potentially be catastrophic to the system if not carried through correctly.  In its current state, the credit system is stable, only backed by the current prices of sites and the return that members are getting for dropping on other sites, advertising, and building a community throughout the site.

However, I also believe that if the conditions permit, the sell may be worth it if the owner cannot continue to provide the same level of support and regular features that members have expected since the site was launched.

The service was launched in the October/November period of 2007, growing to its current state, with more than 20,000 blogs in the network, 80 million impressions, with more than 40-80,000 new blogs looking to sign up for the service over the next year.

Simply in this, the site would appear profitable, earning a few thousand dollars as it stands.  For the new owner, he/she or the company will need to be able to institute a way for the site to monetize, or provide an asset to an additional service the person/company already offers.

From the Sitepoint Page 
I launched Entrecard ad network 11 months ago, and in that time is has spread to 20,000 blogs delivering 80 million impressions per month. We're growing fast, and in the next year alone we're on track to sign up between 40,000 to 80,000 more blogs.
The reason so many bloggers love Entrecard is that it brings them traffic! Through our toolbar, the ads they buy on each others blogs, and the thriving community, any blogger joining Entrecard instantly gets a stream of traffic, comments, subscribers that only increases the more they participate! It is a proven system that works, and our growth attests to it.
At the heart of our ad network is a virtual currency that bloggers use to buy ads on each others blogs. The currency is also used to buy all types of products and services in our marketplace. The potential to grow the marketplace is absolutely enormous. Members earn our virtual currency by "dropping their card" on other sites with the widget, commenting on blogs, publishing posts on their blogs, entering and winning contets by other bloggers, or buying them on ebay.
Several propositions that were imposed within the auction page include a credit transfer tax, monetizing the ad network by selling advertising directly on the widget, implementing a credit exchange, and listing fees in the marketplace.

If you are looking to purchase the site, the current owner will provide support and consultation for about one year.

The truth in all of this, even if you don't like the way it is run, managed, and used, is that the system does work.  To date, I have received, whether indirect, or directly, thousands of page views and new visitors to my properties.  For example, yesterday, as a result of an Entrecard visitor "Stumbling" one of my posts, more than 1,200 page views more than normal.  So, whether you feel that the system takes too long to create the traffic stream, it is not true unless you have a huge/any budget, and spend the money to connect with others through blog conventions and networking with others for hours everyday with others.

You can find the official blog post here .

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