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Losing
Control Of Your Company: Lessons from eFront
Article by Peter
Cooper
We're all worried about a day when
we might lose our minds, lose our ability to walk, lose control of our companies...
Back up! Lose control of our companies? Why ever should we lose control of them?
"I'm on top of the finances, I'm on top of expansion, I'm on top of the staff",
you might say. But losing control of your company, or site, is easier than you
imagine.
In this article I'm going to look at how easy it is to lose control
of your company, how you may be tricked into giving power away to others, and
the dangers you face when others are in control. This has become a hot topic because
of a recent drama involving one large dotcom and hundreds of smaller sites which
they took control of.
We'll Buy Your Site And Turn a Profit for
You!
This article has been written in response to the recent eFront
saga. If you can't access their site through the link, don't worry, they may have
been hounded out of business. Haven't read any of the recent articles covering
the recent controversy over eFront? Let's look at the basics.
eFront is
one of a recent new types of company to spring up. They buy sites (or parts of
them) and then sell advertising for them. They work on the principal that individual
webmasters probably don't have enough time or resources to turn large profits
from their sites. If eFront can buy the site in return for stock options, sell
advertising on the site, and then give the original owner a percentage of the
revenue, everyone should be happy.
In the early days, this worked extremely
well. Some sites were getting so many visitors that the original owners were running
at a loss by having to pay high bandwidth charges to their ISPs. eFront came along,
offered to buy the site in return for shares, promised a regular income from advertising
revenues, and would host the site for free. Sounds great!
