On Wednesday, Congress passed the most significant update to the tax code in over 30 years. While the bill is not expected to be signed into law for several days, some companies like AT&T and Comcast have already announced their plans to grant bonuses to hundreds of thousands of workers, and AT&T has added $1 billion to its 2018 capital expenditure budget. This comes in response to the lowering of the corporate tax rate from 35% to 21% starting in 2018 under the new bill, among other changes to the business tax code, including a 20% deduction on the first $315,000 of joint income for corporate partnerships.
In SaaS news this week, the highest court in the European Union has ruled that Uber is in fact a transportation service, not just a tech platform and will therefore be subject to regulations currently in place for such entities. This landmark decision means each country in the E.U. will be free to regulate Uber at the national level. This ruling comes just a month after taxi drivers in Spain went on strike to protest about the lack of regulation which Uber has been historically subjected to.
Google is also in the news this week, having announced details around the upcoming release of their native ad-blocking program on February 15, 2018. This could impact display advertising businesses, as it will mean all ads on a page where an advertisement violates the new regulations—even those owned and served by Google—will be blocked. In order to ensure ads are displayed, content site business owners will want to check that none of their pages violate the Coalition for Better Ads’ terms, including the use of full-page interstitials, ads that play sound without warning, and flashing ads.
New in e-commerce listings this week we have a $729K business in the pet fashion and accessories niche, with rapid revenue CMGR of c.30% over the last 12 months, an email list of over 500,000 subscribers, a powerful Facebook Pixel and strong website traffic with c.13 million page views in the past year. Also listed this week is a $275K adult health and wellness business, featuring educational site content with links from notable sources, strong website traffic boasting c.875,000 unique visitors in the past 12 months, rankings for 23,000 keywords, revenues diversified across hundreds of SKUs and a lucrative U.S. government contract.
New in content business listings this week we have a $271K affiliate business in the dermatology space, with rankings for c.40K keywords, diversified revenues across multiple sources, c.5.8 million page views in the past 12 months and lean and simple cost structure.
New in SaaS business listings we have a $166K B2B social media marketing business, with c.45,000 visitors over the past 12 months, low owner involvement, a scalable cost structure driving continuous high gross margins, a robustly built product with c.480 clients and dozens on glowing reviews, and an authoritative brand in a growing niche.If you are interested in any of the above businesses, follow the links to request a Prospectus.
In event news, the FE team had a great time this past Wednesday at our festive Holiday Networking Mixer, where we met and discussed all things tech with over 120 peers and industry professionals. Thanks to GrooveJar, MageMail, WeWork and Bevi for sponsoring the event! If you missed it, be sure to check out the highlights on Twitter and keep an eye out to join us for our next e-commerce meetup in the New Year. Who else is already gearing up for 2018 events? Right out the gate we are looking forward to Affiliate Summit West in Las Vegas on January 7-9, where founder Thomas Smale will be meeting with industry experts and enjoying keynote speakers Dan Moriarty of Own the Room, Jason Akatiff of A4D, and Brian Kelly of The Points Guy. Shoot us a reply if you are attending or in the local area and would like to meet up!
Continue reading below for more on the new tax bill, Uber’s classification as a transportation service, and Google’s new native adblocking program.
Deal Highlights
New:
E-Commerce – Pet Fashion & Accessories – $179K gross/mo
- Rapid revenue growth, reaching a c.30% compound monthly growth rate over the trailing 12 months
- Email list of over 500,000 customers with a powerful Facebook Pixel, optimized with hundreds of thousands of data points
- Continuously high website traffic with c.2 million sessions and c.13 million page views in the past year
- Lean and simple cost structure allowing for minimal overhead
- Low owner involvement with much of the tasks outsourced to VAs
Yearly net profit: $303,000
Asking price: $729,000
E-Commerce – Adult Health & Wellness w/ U.S. Gov. Contracts – $18K gross/mo & 26 Yr History
- Educational nature of site content, boasting links from several notable sources, including university institutions
- Strong website traffic with c.875,000 unique visitors in the past 12 months alone
- Ranks for 23,000 keywords
- Revenues diversified across hundreds of SKUs with no single SKU accounting for more than c.4% of sales
- A lucrative U.S. government contract
Yearly net profit: $118,000
Asking price: $275,000
Affiliate – Dermatology – $9K gross/mo
- C.3 million unique visitors driving c.5.8 million page views in the past 12 months
- Ranks for c.40K keywords
- Revenues diversified across a number of sources, reducing concentration risk
- Lean and simple cost structure allowing for highly scalable operations
- Low owner involvement
Yearly net profit: $106,000
Asking price: $271,000
SaaS – B2B Social Media Marketing – $6K MRR
- Authoritative brand in the growing social media marketing niche
- Robust product, boasting c.480 of clients and dozens of glowing reviews
- Simple and scalable cost structure driving continuously high gross margins
- Stable site traffic with c.45,000 visitors over the past year
- Low owner involvement with much of the day-to-day delegated to staff
Yearly net profit: $39,000
Asking price: $166,000
Sold:
Display Advertising – Financial Institution Directory – $5.3K gross/mo
Direct Advertising – Gaming – $2.1K gross/mo
Affiliate – Wedding Registry – $2.1K gross/mo
SaaS – B2B Productivity Management Solutions – $1.5K MRR
Affiliate – Electronics – $1.3K gross/mo
In the News…
Tax Bill Passes House and Senate
This week, a new tax bill with comprehensive changes to the current tax code passed through the House and Senate, and is expected to be signed into law in just a few days from now.
The new tax bill, which represents the largest rewrite to the tax code in over 30 years, was approved by the House and Senate on Wednesday, and is expected to be signed into law by the president in the next several days. Several corporations, including AT&T and Comcast, have come out saying that they will be granting bonuses of around $1,000 to workers and increasing capital spending by significant amounts. The bill lowers the corporate tax rate to 21% for all taxable income, down from 35% for income over $10 million. Minimum tax exemptions for companies have been lifted but kept in place for individuals making over $500,000 and couples making over $1 million. The bill also doubles the standard deduction, as well as slightly raises the tax threshold within each tax bracket. Other notable changes include repealing the individual mandate for health care, a 20% deduction for businesses’ first $315,000 of joint income, limiting property tax deductions to $10,000, doubling estate tax exemption levels, and raising the child tax credit from $1000 per child to $2000 per child.
The IRS is still working out how the bill affects each facet of the tax code, as it is quite long. As legislators understand the bill more intimately, more information on individual circumstances and how the bill applies will be revealed.
E.U. Categorizes Uber as a Transportation Service
On Wednesday, the highest court in Europe has ruled that Uber is a transport service, not just a tech platform, which means they will now need to be regulated in the E.U.
Uber has been causing frustrations among taxi drivers and government regulators, mostly on the grounds of “unfair competition” and “misleading business practices.” The status quo of painting Uber as a tech platform meant they were able to avoid licensing and regulation under established transporation service laws. This ruling by the European high court means that Uber drivers are now subject to regulations for transport services at the national level within each country of the European Union. The court did acknowledge Uber’s intermediary status between drivers and riders, but ruled that because “Uber’s purpose is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, [Uber] must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of E.U. law.” The court further dismissed Uber’s claims that they were just an e-commerce platform connecting riders and drivers due to the fact that “Uber exercises decisive influence over the conditions under which the drivers provide their service.”
This ruling comes a month after taxi drivers in Spain went on their latest strike to protest Uber and Cabify, a competitor of the tech giant.
Google Announces Launch Date for Native Adblocking Program
Google announced this week that Google Chrome will block all ads, including any owned or operated by Google, on websites that display non-compliant advertisements.
While Google had mentioned that it would at some point begin to block native ads, Wednesday was the first time they announced an actual date for the implementation. Chrome’s built-in (meaning no external downloads required) ad-blocker will go live on February 15, 2018, between two scheduled releases of Chrome versions. This means that Google will be flipping the “on” switch for the ad blocker remotely and perhaps even gradually. As a recent member of the Coalition for Better Ads, it would appear that Google is committed to improving the user experience by blocking full-page ad interstitials, ads that play sound without warning, and flashing ads. Website owners who monetize their sites through display advertising should note that if even one ad is out of compliance, all ads will be blocked. Now is a good time to thoroughly audit advertisement programs on your site to ensure that all ads are in compliance with Google’s regulatory requirements.
It appears as though Google hopes this will reduce the rising use of ad blockers; the thinking is that if viewers are less bothered by obnoxious ads, they will be more willing to allow passive ads to display on the sides without feeling the need to block them all, which would ultimately improve earnings from ads for site owners.