"Consider the resources that GE spends to lowers its tax bill... Indeed, a corporate tax system with a tax rate of zero could well be preferable as it would waste fewer resources and raise not much less revenue."
GE does pay their taxes. The issue is that they structure their business in a socially inefficient way in order to minimize their taxes. They do pay the taxes they owe.
I'll speculate that what you may really oppose is structuring transactions in order to avoid taxes. But then again, you may not.
Do you oppose employers providing health insurance, i.e. untaxed compensation? Do you oppose individuals buying a home when the mortgage interest tax deduction tips the scales in favor of home ownership? Or corporations switching to green energy sources when tax subsidies make it economical [1]?
[1] Incidentally, this is one of the bigger tax breaks GE used.
I'm sure they pay the taxes they owe and they do it within the legal framework they operate in, otherwise we would be reading a whole other article about corporate fraud.
Instead the article is about a company that paid zero in taxes on their profit thanks to "extraordinary use of tax breaks and clever accounting".
I'm not against any of the tax structures you mention, GE doesn't need the best tax experts in the world for those things. So even though I haven't read the 57,000 page tax return I am willing to guess that all of the tax breaks used where not of the same considerate nature as the ones you mention.
It just seems like the primary motivation is to avoid paying taxes, not switching to green energy or even pay health insurance. The article even mentions "inefficient ways that GE structures its businesses just to avoid paying taxes", which, if true, is a major indicator.
Of course I may be completely wrong, I don't know what the motivation is and why they seem to work so hard not to pay taxes on their profit.
The biggest tax break they got is a loss carryforward. This is a one time event due to losses incurred by GE Capital, and is almost certainly not something they did on purpose.
In contrast, GE's green energy and paying for employee health insurance are done directly to avoid paying taxes.
GE's windmills are profitable primarily because of the tax benefits. And there is no business reason whatsoever why a company should pay for employee health insurance, or car insurance, or cable TV. Companies pay for health insurance because it reduces the tax bill, and they generally don't pay for car insurance (which doesn't reduce the tax bill).
I tire of this argument. They do. They pay taxes according to the laws of the land.
Are they being fiscally responsible by paying less to the tax experts than they'd pay in taxes? I don't know, but I'd suspect either those experts will always continue to justify their existence (e.g. "Yes, Mr. CEO, we've saved you oodles of money") or corporate boards and executives just prefer not to think about taxes and accounting and such and just keep some accountants and lawyers around anyway.
I've had a look at the Google Analytics profile together with the owner. The site is not flawless and there's a lot of room for improvement, but it does have significant traffic and I saw the statements from the third party showing clicks and revenue every month since January 2009. This sealed the deal for me.
The third party is a CPC network, I had no idea that CPA tends to generate more revenue or how that even works. I'm not sure either what Adsense/Adwords Arbitrage means but I would like to know more!
There is a membership area but no paid membership. Definitely something to consider. The newsletter has about 5000 subscribers, also a source of revenue there.
The iPhone/Android app was my first thought when looking at the site. I have another company that makes apps and thought it would be a perfect fit.
Yes a huge chunk of the traffic comes from Google. Diversifying the source of traffic is something I'd like to do but don't know exactly how. Which leads to a question: Do you know of a good company I can turn to for these kinds of services?
The other company I have is called weApps Sweden, please feel free to get in touch with me at [email protected]
Great point :) Revenue would increase with a higher number of visitors. Any good tips on SEO or other strategies? Currently, 80% of the traffic is from google. Thanks!
Thanks for your reply! That is very true, the advertising is coming from a third party that focuses on the niche market of pregnant women and new parents. All of the hits are from Sweden since the site is in Swedish.
I'm very open to the idea of an affiliate partnership, but I must say that I'm cautious since a many online stores advertise on the site (which generates extra revenue separate from the third party)
I would very much like to look into it. Not sure if there's a DM feature on HN, but if you know of companies that would be a good fit then I'd like to explore the opportunity with you. Thanks!
Yeah, well the other idea might be to just sit back and accept the $30K per year. Within a year you will have a return on your investment so long as that third party continues to advertise. Bulls make money, bears make money, but pigs get slaughtered. Careful you do not overload your site trying to make money!
Good point. The site has a little over 1M pageviews per year. Of those around 750K are unique visits. I don't know how many unique visitors it had, but I can check.
What does this all mean in terms of generating revenue? Which ones are more important to focus on than the other?
(again I'm pretty new at running an online business, thanks for all you input)
All I can say is WOW. 750,000 uniques in Sweden is MASSIVE. You've got ~8% of the country going to your website if that's accurate.
Now the problem I see is you have 750k uniques and 1m pageviews. That means 1.3 pages per user. That would indicate your site has no stickiness, people don't spend any time on there. How do you explain that?
Exactly! Stickiness and the time spent on the site were problems that the owner talked to me about.
The bounce rate is about 73% and the time spent on the site is a little over 1 minute. Is that good, bad?
The site is structured much like a web-portal was back in the days. There's a TON of content on the front page which then leads further into the site.
The owner has been trying to keep visitors on the site by adding a forum, competitions, slideshows etc. There's no blog but he does have quite a following on the newsletter.
The ~750,000 unique visits (as it stated in Google Analytics), does that mean unique visitors or unique visits as in say 1 person visiting 750,000 times?
I'm not completely sure as to what numbers advertisers care about?
I don't think analytics is counting unique visitors. I think it's unique visitor within the past 24 hours. So it could be the same people visiting once per day. But don't quote me on that. You should be able to see the returning visitors stats, see how that adds up.
Time spent really depends on the type of site. 1 minute is not that sticky though in my opinion if you're creating content and trying to get people to stay on site.
Perhaps your best route would be to open a dialogue with the current users and see what they do and don't like about the site. What they would like to see more of rather than just blindly guessing and adding features.
