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Online Exit Strategy Ensures Survival

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An online company or operating unit with a five-year plan is simply trying to equal the average survival rate. That plan should have an exit strategy.

Everything is temporary. It’s the nature of the universe. It’s also the nature of people, companies, products and services.

Online publishing is no different. Consider Google’s massive investment in Google+, its attempt to establish a major foothold in social media and especially to compete with Facebook.

Google+ launched in June 2011 with much fanfare and attention from media as well as online publishers. The company shut down the platform in April 2019 after less than eight years of life.

The Decline of AdSense Publishers

Webmaster forums are filled with comments by website publishers who rely heavily on the Google AdSense network for revenue.

Lately, many of the commenters have bemoaned the steady decline in revenue from the network, which in effect pays publishers for putting network ads on their sites.

Some of these same commenters have said they used to earn six figures a year in revenue from AdSense and now get less than 10 percent of that total. Others with large sites have said they have laid off employees.

Google is moving better-paying ads from its partners to its two major brands, the Google search engine and YouTube.

Likewise, one of the largest ad networks after AdSense shut down on April 30, 2019. “After 15+ years in business and millions of publisher relationships, Chitika is hereby shutting down,” its website said.

Online Companies Have a Limited Lifespan

The average lifespan of all companies is about five years. So an online company or operating unit with a five-year plan at the start of its life is simply trying to equal the average survival rate. That five-year plan should reasonably have an exit strategy. It may consider:

  • Does the company or operating unit depend on a single leader? What if that leader leaves?
  • Do they depend on a product or service that may evolve or fail to evolve beyond the current environment?
  • What if the market isn’t responsive enough to reach an acceptable profit? Or any profit?

These questions and others look to the future and not the present. They force company owners to plan the possible end of the operation in case of failure.

As one entrepreneur told me, “I never start a business without knowing how to end it”.

Evolve the Business or Die

The giant German company Siemens began business more than 150 years ago by building a product for telegraphs. The fact that telegraphs no longer exist prove that Siemens avoided a forced exit — the company changed with the environment. It is now the largest manufacturing conglomerate in all of Europe.

The lesson from Siemens, Google and other companies is that they chose to exit products or services which threatened to damage if not outright bring an end to the company’s existence.

The lesson for online publishers is the same. First they envision the possibility of an end to certain products or services and make sure they fail fast and cheap. Some they envision the possibility of an end to the company.

They may do so on purpose. The company owner and founder is ready to retire. The business is in decline. The product or service may have a limited lifespan anyway. Whatever the reason, companies that plan exit strategies will end themselves, their products or their services with the least pain possible.

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