Wikia: Making Money Yet?, Or a really bad business model? Options Rating

[GlassBeadGame]

I recently saw a claim in a sycophantic piece of coverage that Wikia was the 75th most popular website. That didn't sound right, and its not. Wikia.com has an Alexa rank of 216 (world) and 116 (USA). That seems not too shabby. Probably much better than the Web 1.0 equivalents of Geocities, Anglefire or Tripod ever had. Has Wikia started to make significant money yet or is the business model so FUBAR to make even a lot of traffic not amount to success? Greg?

[thekohser]

Jimbo's going by the Quantcast system, not Alexa.

These ranking systems are not foolproof, and you can see Wikia's already back down to 105 from the recent 75 claim. (Or is that "clam"?) (NSFW)

I've tried to figure out Wikia's bottom line, and all I've ever been able to conclude is that maybe after paying their own office rent, collect the sub-lease money (now ceased) from the Wikimedia Foundation, pay staff, return the trampoline to the trampoline store, and rake in ad-click money...

Wikia might be clearing $10,000 to $20,000 per month in profit margin.

Now, remember, the investors are trying to recuperate $14,000,000, so that's going to take about fifty-eight years to break even, unless the pace picks up.

[Push the button]

Now, remember, the investors are trying to recuperate $14,000,000, so that's going to take about fifty-eight years to break even, unless the pace picks up.

Except, of course, the investors' investment was into equity, and not into debt.

[Milton Roe]

Now, remember, the investors are trying to recuperate $14,000,000, so that's going to take about fifty-eight years to break even, unless the pace picks up.

Except, of course, the investors' investment was into equity, and not into debt.

(IMG:smilys0b23ax56/default/biggrin.gif) (IMG:smilys0b23ax56/default/biggrin.gif)

You do know that the shareholders in a for-profit private corporation are last-in-line to get paid? All creditors are paid before owners can claim anything against assets (positive equity). The whole idea is the corporation's debt is the shareholder's debt also, up to the amount they invested. They can't choose to just "invest in equity", if by "equity" you mean something positive. The owners of Wikia, Inc., a Delaware corporation, have equity, all right, but it's negative equity right now. It's probably about equal to the amount of money they put in and may never get back out.

[the_undertow]

Now, remember, the investors are trying to recuperate $14,000,000, so that's going to take about fifty-eight years to break even, unless the pace picks up.

Except, of course, the investors' investment was into equity, and not into debt.

(IMG:smilys0b23ax56/default/biggrin.gif) (IMG:smilys0b23ax56/default/biggrin.gif)

You do know that the shareholders in a for-profit private corporation are last-in-line to get paid? All creditors are paid before owners can claim anything against assets (positive equity). The whole idea is the corporation's debt is the shareholder's debt also, up to the amount they invested. They can't choose to just "invest in equity", if by "equity" you mean something positive. The owners of Wikia, Inc., a Delaware corporation, have equity, all right, but it's negative equity right now. It's probably about equal to the amount of money they put in and may never get back out.

Those that inc in Delaware think they are savvy, when i reality it's not the best situation for everyone.

First, i have a question: why does anyone visit wikia?

Second, the only DE advantage is to escape a state tax, which also entails specifically that the tax benefit is that a nexus will not be met. WP is a global site. Unless DE is prevented from using Wikia (again, not sure why one would visit the site), there is fail there. I'm all for DE incs. the advantages are fucking rad for for-profit corps. as long as you don't do business in that state.

wales should have set it up in Ireland. his accountancy force is subpar.

[Milton Roe]

Second, the only DE advantage is to escape a state tax, which also entails specifically that the tax benefit is that a nexus will not be met. WP is a global site. Unless DE is prevented from using Wikia (again, not sure why one would visit the site), there is fail there. I'm all for DE incs. the advantages are fucking rad for for-profit corps. as long as you don't do business in that state.

I'm not at all sure it's possible to tell how much business Wikia does in Delaware. Do you really think the corporation pays any DE state tax?

As for setting up in Ireland to escape fed taxes, that doesn't work, except at the corporate tax level (which is irrelevent anyway if the corporation isn't showing a profit). If you're a US citizen, the US wants income tax on any money you personally make as salary outside the US. And Ireland will certainly narc on you to the treasury. I suppose you can try to have the profits transported into the country in less-than-$10,000 increments, to escape the eyes of the feds. But if they go electronically, they go into a US account that the feds "see." Even if it's an account in a US branch of a Swiss bank like UBS, it's no longer safe from being seen.

Maybe if Jimbo had set up the servers and banking in Venezuela. But there's still the problem of getting your money back to the US. I suppose you could set up slush fund abroad for purposes of buying hookers, wine, and really expensive washing machines, while traveling... (IMG:smilys0b23ax56/default/rolleyes.gif)

[Edit] I see there's another advantage to a DE corp, and that is the entire board of directors and officers can be ONE person if you like, and that person can be anonymous and foreign. So I dunno how the hell the feds collect taxes on profitable DE corporations. I suppose they monitor the corporate bank accounts, which have to be connected to somebody's SSN or foreign equivalent ID. So that SOMEBODY (who'd have to be an officer, perhaps the only officer) is on the line for the tax. If the corpiration files a corporate fed return that looks funny when compared with corporate account money, there's an audit and somebody faces fine and even jail.