Paid URL Inclusion
The Internet contains numerous search engines, some ofwhich offer what is known as “paid inclusion.” This meansthat you pay the specific search engine an annual fee foryour web page to be included in their index.
Of course, every search engine already has an automatedprogram commonly called a “spider” that indexes all the webpages it locates online, and it does this for free. Sowhether you pay or not, your web page will eventually beindexed by all Internet search engines, as long as thespider can follow a link to your page. The major issue is,then, how quickly your page is indexed.
A search engine that offers a paid URL inclusion uses anextra spider that is programmed to index the particularpages that have been paid for. The difference between thespider that indexes pages for free and the spider thatindexes only pages for a fee is speed. If you have paid forinclusion, the additional search engine spider will indexyour page immediately.
The debate over paid URL inclusion centers around theannual fee. Since the regular spider of these searchengines would eventually get around to indexing your webpage anyway, why is a renewal fee necessary? The fee isnecessary to keep your pages in the search engine’s index.If you go the route of paid inclusion, you should be awarethat at the end of the pay period, on some search engines,your page will be removed from their index for a certainamount of time.
It’s easy to get confused about whether you would benefitfrom paid inclusion since the spider of any search enginewill eventually index your page without the additionalcost. There are both advantages and disadvantages to paidURL inclusion, and it is only by weighing your pros andcons that you will be able to decide whether to spring forthe extra cash or not.
The advantages are obvious: rapid inclusion and rapidre-indexing. Paid inclusion means that your pages will beindexed quickly and added to search results in a very shorttime after you have paid the fee. The time differencebetween when the regular spider will index your pages andwhen the paid spider will is a matter of months. The spiderfor paid inclusion usually indexes your pages in a day ortwo. Be aware that if you have no incoming links to yourpages, the regular spider will never locate them at all.
Additionally, paid inclusion spiders will go back to yourpages often, sometimes even daily. The advantage of this isthat you can update your pages constantly to improve theranking in which they appear in search engines, and thepaid URL inclusion spider will show that result in a matterof days.
First and foremost, the disadvantage is the cost. For a tenpage website, the costs of paid URL inclusion range from$170 for Fast/Lycos to $600 for Altavista, and you have topay each engine their annual fee. How relevant the costfactor is will depend on your company.
Another, and perhaps more important, disadvantage is thelimited reach of paid URL inclusions. The largest searchengines, Google, Yahoo, and AOL, do not offer paid URLinclusion. That means that the search engines you choose topay an inclusion fee will amount to a small fraction of thetraffic to your site on a daily basis.
Google usually updates its index every month, and there isno way you can speed up this process. You will have to waitfor the Google spider to index your new pages no matter howmany other search engines you have paid to update theirindex daily. Be aware that it is only after Google updatestheir index that your pages will show up in Google, Yahoo,or AOL results.
One way to figure out whether paid URL inclusion is a gooddeal for your company is to consider some common factors.First, find out if search engines have already indexed yourpages. To do this, you may have to enter a number ofdifferent keywords, but the quickest way to find out is toenter your URL address in quotes. If your pages appear whenyou enter the URL address but do not appear when you enterkeywords, using paid inclusion will not be beneficial. Thisis because your pages have already been indexed and rankedby the regular spider. If this is the case, your moneywould be better spent by updating your pages to improveyour ranking in search results. Once you accomplish this,you can then consider using paid inclusion if you want tospeed up the time it will take for the regular spider torevisit your pages.
The most important factor in deciding whether to use paidURL inclusion is to decide if it’s a good investment. Tofigure this out, you have to look at the overall picture:what kind of product or service are you selling and howmuch traffic are you dependent on to see a profit?
If your company sells an inexpensive product that requiresa large volume of traffic to your site, paid inclusion maynot be the best investment for you; the biggest searchengines do not offer it, and they are the engines that willbring you the majority of hits. On the other hand, if youhave a business that offers an expensive service or productand requires a certain quality of traffic to your site, apaid URL inclusion is most likely an excellent investment.
Another factor is whether or not your pages are updatedfrequently. If the content changes on a daily or weeklybasis, paid inclusion will insure that your new pages areindexed often and quickly. The new content is indexed bythe paid spider and then appears when new relevant keywordsare entered in the search engines. Using paid inclusion inthis case will guarantee that your pages are being indexedin a timely manner.
You should also base your decision on whether or not yourpages are dynamically generated. These types of pages areoften difficult for regular spiders to locate and index.Paying to include the most important pages of a dynamicallygenerated website will insure that the paid spider willindex them.
Sometimes a regular spider will drop pages from its searchengine, although these pages usually reappear in a fewmonths. There are a number of reasons why this can happen,but by using paid URL inclusion, you will avoid thepossibility. Paid URL inclusion guarantees that your pagesare indexed, and if they are inadvertently dropped, thesearch engine will be on the lookout to locate themimmediately.
As you can see, there are numerous factors to consider whenit comes to paid URL inclusion. It can be a valuableinvestment depending on your situation. Evaluate yourbusiness needs and your website to determine if paid URLinclusion is a wise investment for your business goals.
Many entrepreneurs seek venture capital or private equity as a way to take their company to the next level. Consider the smart equity alternative of having a large information technology company take an equity stake in your company. This article discusses why that is a superior alternative.
If you are an entrepreneur with a small information technology based company looking to take it to the next level, this article should be of particular interest to you. Your natural inclination may be to seek venture capital or private equity to fund your growth. According to Jim Casparie, founder and CEO of the Venture Alliance, the odds of getting Venture funding remain below 3%. Given those odds, the six to nine month process, the heavy, often punishing valuations, the expense of the process, this might not be the best path for you to take.
We have created a smart equity model designed to bring the appropriate capital resources to you entrepreneurs. It allows the entrepreneur to bring in smart money and to maintain control. We have taken the experiences of several technology entrepreneurs and combined that with our traditional investment banking merger and acquisition approach and crafted a model that both large industry players and the high tech business owners are embracing.
Our experiences in the technology space led us to the conclusion that new product introductions were most efficiently and cost effectively the purview of the smaller, nimble, low overhead companies and not the technology giants. Most of the recent blockbuster products have been the result of an entrepreneurial effort from an early stage company bootstrapping its growth in a very cost conscious lean environment. The big companies, with all their seeming advantages experienced a high failure rate in new product introductions and the losses resulting from attempting to internally develop the next hot technology were substantial.
Don’t get us wrong. There were hundreds of failures from the start-ups as well. However, the failure for the edgy little start-up resulted in losses in the $1 – $5 million range. The same result from an industry giant was often in the $100 million to $250 million range.
For every Google, EBay, Salesforce, or Twitter there are literally hundreds of companies that either flame out or never reach a critical mass beyond a loyal early adapter market. It seems like the mentality of these smaller business owners is, using the example of the popular TV show, Deal or No Deal, to hold out for the $1 million briefcase. What about that logical contestant that objectively weighs the facts and the odds and cashes out for $280,000?
As we discussed the dynamics of this market, we were drawn to a private equity investment model commonly used by technology bell weather, Cisco Systems, that we felt could also be applied to a broad cross section of companies in the high tech niche. Cisco Systems is a serial acquirer of companies. They do a tremendous amount of R&D and organic product development. They recognize, however, that they cannot possibly capture all the new developments in this rapidly changing field through internal development alone.
Cisco seeks out investments in promising, small, technology companies and this approach has been a key element in their market dominance. They bring what we refer to as smart equity to the high tech entrepreneur. They purchase a minority stake in the early stage company with a call option on acquiring the remainder at a later date with an agreed-upon valuation multiple. This structure is a brilliantly elegant method to dramatically enhance the risk reward profile of new product introduction. Here is why:
For the Entrepreneur: (Just substitute in your technology industry giants name that is in your category for Cisco below)
1. The involvement of Cisco – resources, market presence, brand, distribution capability is a self fulfilling prophecy to your products success.
2. For the same level of dilution that an entrepreneur would get from a VC, angel investor or private equity group, the entrepreneur gets the performance leverage of “smart money.” See #1.
3. The entrepreneur gets to grow his business with Cisco’s support at a far more rapid pace than he could alone. He is more likely to establish the critical mass needed for market leadership within his industry’s brief window of opportunity.
4. He gets an exit strategy with an established valuation metric while the buyer helps him make his exit much more lucrative.
5. As an old Wharton professor used to ask, “What would you rather have, all of a grape or part of a watermelon?” That sums it up pretty well. The involvement of Cisco gives the product a much better probability of growing significantly. The entrepreneur will own a meaningful portion of a far bigger asset.
For the Large Company Investor:
1. Create access to a large funnel of developing technology and products.
2. Creates a very nimble, market sensitive, product development or R&D arm.
3. Minor resource allocation to the autonomous operator during his “skunk works” market proving development stage.
4. Diversify their product development portfolio – because this approach provides for a relatively small investment in a greater number of opportunities fueled by the entrepreneurial spirit, they greatly improve the probability of creating a winner.
5. By investing early and getting an equity position in a small company and favorable valuation metrics on the call option, they pay a fraction of the market price to what they would have to pay if they acquired the company once the product had proven successful.
Let’s use two hypothetical companies to demonstrate this model, Big Green Technologies, and Mobile CRM Systems. Big Green Technologies utilized this model successfully with their investment in Mobile CRM Systems. Big Green Technologies acquired a 25% equity stake in Mobile CRM Systems in 1999 for $4 million. While allowing this entrepreneurial firm to operate autonomously, they backed them with leverage and a modest level of capital resources. Sales exploded and Big Green Technologies exercised their call option on the remaining 75% equity in Mobile CRM Systems in 2004 for $224 million. Sales for Mobile CRM Systems were projected to hit $420 million in 2005.
Given today’s valuation metrics for a company with Mobile CRM Systems growth rate and profitability, their market cap is about $1.26 Billion, or 3 times trailing 12 months revenue. Big Green Technologies invested $5 million initially, gave them access to their leverage, and exercised their call option for $224 million. Their effective acquisition price totaling $229 million represents an 82% discount to Mobile CRM Systems 2005 market cap.
Big Green Technologies is reaping additional benefits. This acquisition was the catalyst for several additional investments in the mobile computing and content end of the tech industry. These acquisitions have transformed Big Green Technologies from a low growth legacy provider into a Wall Street standout with a growing stable of high margin, high growth brands.
Big Green Technologies profits have tripled in four years and the stock price has doubled since 2000, far outpacing the tech industry average. This success has triggered the aggressive introduction of new products and new markets. Not bad for a $5 million bet on a new product in 1999. Wait, let’s not forget about our entrepreneur. His total proceeds of $229 million are a fantastic 5- year result for a little company with 1999 sales of under $20 million.
MidMarket Capital Advisors has borrowed this model combining the Cisco smart equity investment experience with our investment banking experience to offer this unique Investment Banking service. MMCA can either represent the small entrepreneurial firm looking for the “smart equity” investment with the appropriate growth partner or the large industry player looking to enhance their new product strategy with this creative approach. This model has successfully served the technology industry through periods of outstanding growth and market value creation. Many of the same dynamics are present today in the information technology and software industries and these same transaction structures can be similarly employed to create value.
Diversity, Equity, and Inclusion (DEI) in Shops | Cheryl Thompson, CADIA
Subscribe & rate the Beyond the Wrench Podcast on Apple Podcasts, Google Podcasts, or wherever you get your podcasts!
In this week’s episode, we talk with Cheryl Thompson, CEO & Founder of Center for Automotive Diversity, Inclusion and Advancement. We discuss the meaning of diversity, equity, and inclusion (DEI), why it’s important for our industry to embrace DEI, and what needs to change in the industry.
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