There’s been a lot of excitement leading up to the biggest Internet IPO since May 2012, when Facebook went public. That day was a nightmare for Zuckerberg and Co., as widespread demand caused glitches that left investors unsure whether or not their transaction went through. Facebook’s stock suffered, but has been skyrocketing for the last 12 months.

Will Twitter follow suit? Nobody knows for sure – but the financial world has been abuzz with speculation ever since Twitter’s IPO filing last month. The SEC filing revealed previously secret information, like exact revenue and growth numbers. Twitter excitement has reached a frenzied level in the last few days. Investor interest has spurred last minute price hikes up to $26 per share and it’s been reported that banks underwriting the IPO have received so much interest they’ve had to close their books.

All this for a company that hasn’t ever turned a profit? I get into the juicy details of Twitter’s highly anticipated IPO below.

What You’ll Learn:

• How Much Twitter Earns Per Tweet
• How Twitter’s value compares to Facebook and LinkedIn
• How Much Co-Founder Jack Dorsey Stands to Gain
• How Twitter’s IPO will be Different than Facebook’s
• Whether or Not to Invest

21 Things to Know as Twitter Goes Public

#1 Revenue is Real and Growing

Twitter revealed that they’ve already earned $422 million in the first nine months of 2013. That’s more than double their revenue from the same period the year before. They’re on pace to make over $600 dollars in 2013.

Twitter’s sales are projected to rise 53% next year to $950 million according to an estimate from the company’s bankers.

#2 But Twitter has Never Seen Profit

In 2011, Twitter lost $128.3 million dollars. In 2012, they cut that number down to $79.4 million. Since it’s inception in 2006, Twitter has lost a whopping $418.6 million.

The good news is that revenue growth is outpacing expenses by a factor of three. According to the Wall Street Journal, between 2010 and 2012 Twitter’s revenue rose 1,021% and expenses rose only 311.5%. Still, they aren’t expected to see a profit until 2015.

#3 Almost All that Money is Coming from Ads

“We generated 85% and 87% of our revenue from advertising in 2012 and the six months ended June 30, 2013, respectively.”

– Twitter, in IPO Filing

As of now, “substantially all” of those advertising dollars come from three sources: promoted tweets, promoted trends, and promoted accounts.

In the future, more of that money may come from inline advertisements. Twitter is also looking to boost their ad revenue in the coming years by becoming more visual and more mobile.

#4 75% of Active Twitter Users are Mobile

According to the IPO, three out of four Twitter accounts are accessed through a smart phone or tablet.

This bodes well for Twitter, given the rise of mobile web. According to Salon, global mobile advertising revenue nearly doubled from $5.3 billion to $8.9 billion from 2011 to 2012.

#5 But Only 65% of Ad Revenue comes from Mobile

Twitter makes less money from their mobile users and that’s something they’ll be looking to improve upon as they make a push for profitability in the coming years.

#6 Twitter has 230 Million Active Monthly Users

If Twitter’s users were a country, it would be the fifth most populous in the entire world – between Indonesia and Brazil.

#7 About 25% of Twitter Users are American

Twitter was founded in San Francisco, but today the vast majority of Twitter users live outside the States. 49.2 million Americans use the service compared to over 169 million internationally.

Of those international users, about 15 million live in the UK. With a population of about 63 million, that means almost one in every four people in the United Kingdom use Twitter. In the US, that figure is lower (about 1/6).

#8 They’re Sending 500,000,000 Tweets Each Day

That amounts to 5,787 tweets per second.

#9 For Every 1000 Tweets, Twitter earns about 75 cents

The numbers are higher in the US, where Twitter gets $2.17 per 1,000 tweets. Internationally, it’s a paltry $0.30 for 1,000 tweets.

This an important lesson in online business. All people are created equal, but some web visitors are worth more advertising dollars than others. Targeting an audience in the United States or other affluent nations will result in higher earnings per visitor.

#10 There are More Tweets than People

Since 2006, there have been over 300 billion tweets. That makes the world population of 7.12 billion people look pretty measly in comparison.

#11 Twitter is Growing Faster Internationally

According to Twitter’s IPO filing, they’re growing at a rate of 35% in the US and 47% globally. This trend is expected to continue, as global markets are significantly less saturated.

#12 Twitter’s Stock Ticker will be TWTR

Simple and to the point, this ticker is reminiscent of the company’s original name: twttr.

#13 Twitter’s IPO Values the Company at $18.3 Billion

That may seem like a lot for a company that’s never turned a profit – and it is. But it’s still about quite a bit less than the value of LinkedIn ($26 Billion) and Facebook ($120 billion).

#14 Demand for Twitter Stock has been High

“Banks underwriting the IPO told investors that the order book closed Tuesday morning, earlier than expected.” USA Today describes this as “a bullish sign.”

Initially, Twitter was going to be selling its shares at $17-$20. But after receiving a warm pre-IPO response from investors, that on Monday, November 4^th Twitter raised the price to $23-26 per share. Finally, the night before their market debut, Twitter settled on the high-end:  $26/share. That means they stand to raise about $2.1 billion from the sale.

#15 Twitter’s Selling Less of Itself than Facebook

Twitter’s IPO is the biggest Internet IPO since Facebook, but it’s still much smaller than it’s social media rival. Facebook sold 421 million shares at $38 each. Twitter is selling only 70 million shares.

Fewer public shares means that the IPO will not raise as much money, but it’s also safer and ensures a higher degree of control for the existing owners.

#16 Former CEO Williams Stands to Gain Over $1 Billion

Here are some notable Twitter stockholders:

• Evan Williams, Founder and Former CEO – holds 12%
• Peter Fenton, Board Member – holds 6.7%
• Jack Dorsey, Founder and Chairman – holds 4.9%
• Richard Costolo, Current CEO – holds 1.6%

Jack Dorsey ownership of Twitter will be worth well over a half billion dollars.

#17 Current CEO Richard Costolo’s Salary is Just $14,000

Don’t shed any tears for the guy: he made $11.5 million in 2012 and his stock is estimated to be worth about $200 million.

#18 Twitter will be Traded on NYSE

Nasdaq is “technology focused” stock exchange, home of Apple, Google, and Facebook. But Twitter decided to be listed with the larger New York Stock Exchange.

The New York Post’s Mark DeCambre attributes the move to NYSE’s long courtship of Twitter – along with the fact that NYSE has more Twitter follower’s than the Nasdaq.

But the biggest reason may have to do with Twitter’s biggest competitor. According to Reuters, “many analysts said the trading disruptions that occurred on Facebook’s Nasdaq debut likely played to NYSE’s favor.”

#19 And NYSE isn’t Taking Any Chances

On Saturday, October 26, 2013, NYSE performed an unprecedented system’s check in order to avoid any technical difficulties on opening day. Investors can rest easy knowing that the tests went well.

#20 It has been a Strong Year for IPO’s

Reuters reports that, “Both NYSE and Nasdaq have said 2013 is shaping up to be their best IPO year in more than half a decade.”

#21 It’s a Bull Market

The markets have been soaring in the last year, particularly for online companies. Facebook and LinkedIn have both doubled their share prices in the last year. Bloomberg says, “The climate for Web stocks is particularly hot, with the 77-member Bloomberg U.S. Internet Index trading near the highest valuation relative to the S&P 500 since 2007.”

In other words, the time is right for Twitter’s IPO.

Should You Invest in Twitter?

Anybody who tells you they know what’s going to happen with Twitter is either a liar or a psychic. Of course, that doesn’t stop analysts from chiming in. Predictions run the gamut, from the dire…1

“When you look at valuations and look at the lack of earnings and revenue, it seems to me much like the dot-com bubble. This market looks a little frothy and Twitter is the personification of a risky trade.”

– Matt McCormick, to Bloomberg

…to the exuberant…

“Our own view on management is very favorable given our observations of decisions they have made to date. We have a high degree of confidence that Twitter can continue producing sales growth for many quarters to come.”

– Matt Weiler, to Wall Street Journal

…and everything in between.

Ultimately, it comes down to whether or not you believe in Twitter. It’s valuation at over $10 Billion is based on assumptions that it will continue to grow and increase revenue for decades to come.

My Opinion:

I believe in Twitter and think that it’s a unique platform that’s well-managed and well-positioned to mature along with mobile. But I’m a low-risk investor and no matter how you slice it, Twitter is a high-risk stock. For that reason, I won’t be buying Twitter stock any time soon. That said, I bet Twitter’s opening day will go off without a hitch and its price will finish higher than $30.

A Message from Twitter to Investors

Included in the filing was this message for investors from founder Jack Dorsey:

Twitter was born on March 21, 2006, with just 24 characters.

We started with a simple idea: share what you’re doing, 140 characters at a time. People took that idea and strengthened it by using @names to have public conversations, #hashtags to organize movements, and Retweets to spread news around the world. Twitter represents a service shaped by the people, for the people.

The mission we serve as Twitter, Inc. is to give everyone the power to create and share ideas and information instantly without barriers. Our business and revenue will always follow that mission in ways that improve–and do not detract from–a free and global conversation.

Thank you for supporting us through your Tweets, your business, and now, your potential ownership of this service we continue to build with you.

Yours,

@twitter

Jack’s also the founder of Square and a pretty interesting guy. If you want to learn more from the man behind Twitter, I’ve compiled 9 business lessons from his amazing life.

The post Twitter Goes Public: 21 Things You Should Know appeared first on How To Make Money Online.

We here at IncomeDiary aren’t quite sold on the valuation of the company, especially when you consider there’s only 845million users on the website. Lets round that up to a billion users, that means that every user is worth $100 to Facebook. So with that knowledge, Facebook could start putting a ridiculous amount of money into advertising, and so long as they’re spending less than $100 per person, they will be making money. With a revenue of $3.7 billion last year, each user was worth an average of $4 each, so there is money there, but $100 billion valuation? That might be a little bit much when you consider that it’s 100 times that of the company’s profits to earning ratio last year – Apple has a profits to earning ratio of 13 for last year, and Google has one of 22. What do you think?

Mark Zuckerberg – 28.4% – $28.4 Billion

Everyone knows who Mark Zuckerberg is, he’s famous as the owner, founder and CEO of Facebook, and made even more famous when the movie ‘The Social Network’ was released, which tells the tales of the turbulent early days of Facebook. His wealth has grown year after year, and with the new IPO released, which you can read in full here, it’s revealed that he currently owns 28.4% of Facebook, which if current estimates are correct, is going to be work $28.4 Billion. With their best year yet at Facebook, revealing a $1 Billion profit on $3.7 Billion revenue, it’s no wonder that Mark’s worth has gone up.

Here’s another little interesting fact about Facebook. In 2011, Zynga, the owner of social games such as FarmVille, was responsible for roughly 12% of Facebook’s earnings. And that’s massive. Here’s a quote from Facebook’s IPO offering:

“We currently generate significant revenue as a result of our relationship with Zynga, and, if we are unable to successfully maintain this relationship, our financial results could be harmed.

In 2011, Zynga accounted for approximately 12% of our revenue, which amount was comprised of revenue derived from payments processing fees related to Zynga’s sales of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga’s apps generate a significant number of pages on which we display ads from other advertisers. If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected.”

That means that Zynga users spent $308M on Facebook last year alone, which is absolutely ridiculous when you consider what they sell.

With Mark’s Facebook money, you could buy…

• 558 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 28 times.

Jim Breyer & Accel Partners – 11.4% – $11.4 Billion

For those of you that don’t know, Jim Breyer is an American venture capitalist and partner of Accel Partners, which currently owns a solid 11.4% of Facebook, which for those of you who haven’t cottoned on to the maths yet, that’s roughly $11.4 Billion. In August, 2010, Fortune Magazine named Breyer one of the 10 smartest people in technology, and you can see why. It’s his smart thinking and foresight into an incredible company, that has skyrocketed his wealth over the past few years. His previous success with earlier ventures ensured that there was enough money available invest in the right company, at the right time. His firm Accel Partners own the stake in Facebook, but he’s a very large part of the success, and the face of the company.

With Jim’s Facebook money, you could buy…

• 228 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 11 and a bit times.

Dustin Moskovitz – 7.6% – $7.6 Billion

Dustin is just 8 days younger than Mark Zuckerberg, making him the youngest billionaire in the world. Dustin founded the site with Mark back at Harvard and holds on to a 7.6% stake of the company, which with this current valuation is likely to net him a worth of $7.6B. He left Facebook in 2008 to work on his own ventures, such as a mobile photo-sharing site, called Path (I’m sure you’ve heard about it lately), which has already turned down a $100 million offer from Google, and now serves over 2 millions people. As good as that may well be, you can’t help but compare it to the likes of Facebook, which has grown rapidly in the 8 short years since it was created. Clearly a force to be reckoned with.

With Dustin’s Facebook money, you could buy…

• 152 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 7 and a bit times.

Yuri Milner & Digital Sky Technologies – 5.4% – $5.4 Billion

DST was founded by Yuri Milner to focus solely on investments in the internet sector, where they have investments in Facebook, Zynga and Groupon. They bought into Facebook with a $200 million investment in May 2009, based on a $10 Billion valuation. On top of that, they put another $100 million together to start buying employee’s shares to expand their stake in the company. In January 2011, they co-led an investment with Goldman Sachs of another $500 million based on a $50 billion dollar valuation. This has made them one of the largest shareholders in Facebook, and their stake in Zynga means that they’re making money from more than one source, seeing as Facebook users decided to spend $308 million on Zynga through Facebook alone last year. Ridiculous when you think about it.

With Yuri’s Facebook money, you could buy…

• 108 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 5 times, with some spare cash left over for some fancy cars in the basement.

Eduardo Saverin – 5% – $5 Billion

You might recognise the name if you’ve seen ‘The Social Network’, and that’s because Eduardo played a key role in the company’s founding, back when he was roommates and best friends with Mark Zuckerberg. And if you’ve seen the film, you’ll know that their relationship went sour, and that Eduardo actually used to own a third of the company, before it went down to 30% when Dustin Moskovitz came aboard. After some disputes between Mark and Eduardo about how the company was going to move forward, and whether Eduardo was going to remain as part of the Facebook team, he got pushed out the company when a group of investors (including Peter Thiel from PayPal), got onboard. After a series of legal disputes, Eduardo finally got his stake pushed back up to 5%, and even from such a small stake, he’s worth an incredible amount of money. There might be love lost between the two of them, but I wouldn’t turn my nose up at $5 Billion.

With Eduardo’s Facebook money, you could buy…

• 100 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 5 times.

Sean Parker – 4% – $4 Billion

Sean parker is a name that many of you would have been familiar with since way before Facebook, due to his role in Napster, the peer2peer file sharing program. When that eventually went sour and everyone tried to sue him, he walked away with an interesting reputation and a whole lot of knowledge. It was Sean that got involved in Facebook when it was just five months old, becoming the company’s first president, and helped the company to think big with the knowledge that he had acquired from Napster, and his role as an early advisor to Friendster (anyone remember that?). He introduced the company’s first investor to Mark, in the form of Peter Thiel (PayPal Co-Founder) and was the one to implement features such as the photo sharing function. In Mark’s own words, “Sean was pivotal in helping Facebook transform from a college project into a real company.”

He has other irons in the fire, and has recently invested $15 M in Spotify, which is a rival to the new version of Napster, but none of that accounts towards the wealth that we’re look at here today. With a 4% share in one of the fastest growing and most profitable companies on the internet, he’s a sizeable part of something very special.

With Sean’s Facebook money, you could buy…

• 80 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 4 times.

Peter Thiel – 2.5% – $2.5 Billion

As you hopefully read above, Peter experienced early success on the internet with PayPal, which he sold for $1.5B in 2002, which left him with some money to put to good use. He became the first investor in Facebook back in 2004 with a $500,000 investment for a 10.2% stake in the company. His share has been of course watered down in the past eight years as new investors have gotten on board, looking for a stake in the business. His business acumen and foresight for a small company, with plenty of competitors, has served him well as it’s one of the fastest growing companies on the internet, with a value similar to that of McDonalds.

With Peter’s Facebook money, you could buy…

• 50 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, 2 1/2 times.

Microsoft – 1.3% – $1.3 Billion

Microsoft bought into Facebook right around the time that Li Ka-shing did below, paying $240 million for 1.6% of Facebook. Those shares have now been diluted somewhat, so their stake has come down to $1.3 billion, only earning them just over a billion dollars from their investment. Poor things. All jokes aside though, they had the money, and they saw the opportunity and potential so they took it. 2008, when they bought the stock, was an interesting time for Facebook, as it was only half the age it is now, and people were only just beginning to make the switch from other social networks.

I remember learning about Facebook in 2006, and I even opened an account, but I decided I didn’t like it, and didn’t come back to it until the next year. It was only in about 2008, when the majority of my friends and I started to say goodbye to MySpace for good, and open up a Facebook account instead. Microsoft’s investment at this time meant that the company was already in a very strong position, but still had plenty of room to grow, which makes it a wise time to invest for any investor. If anyone can find out how much of Microsoft Bill Gates owns, I’d be very interested to know, because then you could see how much he personally owns of Facebook.

With Microsoft’s Facebook money, you could buy…

• 26 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home once, with a bit of cash left over for soft furnishings.

Chris Hughes – 1% – $1 Billion

Chris Hughes is the forth roommate to Mark, Eduardo and Dustin, from when they were back at Harvard, and that was how he got involved with Facebook. As well as a co-founder of Facebook, Chris was also in charge of the social media side of Barack Obama’s presidency campaign. He appeared on the cover of ‘Fast Company’ magazine, under the title  ”The Kid Who Made Obama President; How Facebook Cofounder Chris Hughes Unleashed Barack’s Base – and Changed Politics and Marketing Forever”. Now that’s a pretty bold statement to make about anyone, but it seems that Chris really did play a big part in promoting Obama, with his extensive knowledge of social media. I don’t know about you, but if I needed someone to help promote me through social media, I’d want one of the co-founders of Facebook too.

With Chris’s Facebook money, you could buy…

• 20 Gulfstream G550 private jets, at $50M each.
• Antilla, the world’s most expensive home, once. Still though, who really needs 2?

Li Ka-shing – 0.8% – $800 Million

The Hong Kong billionaire Li Ka-shing bought into Facebook in 2008, when the company had a valuation of around $15 billion and he only paid $120 Million. It sounds a bit ridiculous to say only when it’s an enormous amount of money, and only a very small percentage, but that very small percentage is now worth almost seven times what he paid for it, at $800 million. It makes you wonder what would happen now if you invested the same amount of money? I think that even back in 2008 there were plenty of investors who felt like they had already missed the boat, when really, that was when Facebook really started to take off and secure itself as a giant of the internet.

With Li’s Facebook money, you could buy…

• 16 Gulfstream G550 private jets, at $50M each.

Read more: ‘20 Movies All Entrepreneurs Should Watch’

The post Who Owns Facebook? – The 10 Richest Facebook Shareholders appeared first on How To Make Money Online.

I have been involved with digital media now since 1997, the early days of the commercial internet. Until early 2000 I was global head of media at the investment banking arm of ABN AMRO and witnessed the explosion of digital media. I soon realized that I was witnessing the biggest shake up in communications since the invention of the printing press. I was determined to be a participant rather than an observer. So I started looking for an internet company to invest in and to run: that was when I came across Cheapflights, an attic-based price comparison site. I became CEO and held that role for eight years.

Since then,  I have been helping Cheapflights with the handover to a new management team and, with my business partner Hugo Burge, have co-founded a small fund called Howzat Media which invests in early stage internet companies. Our portfolio includes stakes in WAYN.com, the travel social networking site; TrustedPlaces.com, which reviews local businesses predominantly restaurants, clubs and bars; Trivago.com, a hotel price comparison and review site; CheapToday, a Boston-based start up which publishes deals designed to appeal to the American cost-conscious consumer and Academia.edu, a social networking site for the academic community.

I am now scaling back my time on Cheapflights and will probably take on some more part-time board roles helping early stage internet companies achieve the same sort of success which has characterised Cheapflights: in other words, hyper-growth, scale, market leadership, robust profitability and internationalization.

What inspired you to get involved with CheapFlights.com – Where are you with it now?

Cheapflights, in late 1999, when I first looked at it, was a small but perfectly formed internet business. I liked the business model which was a publishing platform for flight prices which the travel industry was keen to access because it provided them with high quality leads. For the general travelling public, it did something which traditional media could not do: comparison of up to date prices, clearly arranged by destination, from a vast range of suppliers, from major airlines through to tiny travel agents.

It was already profitable, its traffic was growing but the founder of the business had taken it as far as he was going to in his Wandsworth attic. He wanted to get out altogether so, together with Hugo Burge, I led a management buy-in.

I liked Cheapflights’ publishing model because it meant you could keep the operation lean and mean. No call centres, shops or customer service agents. And at that time, Cheapflights was the only travel price comparison site in the world. Many brilliant people like Rich Barton (Expedia), Brent Hoberman (LastMinute) and Dinesh Dhamija (Ebookers) were developing online travel agencies and they all became clients of Cheapflights.

But only Cheapflights sourced deals from a variety of flight providers and linked the travelling public with those providers. I suppose we were a bit like Google because what we did was display information, a pure media model.

And of course what a great name: Cheapflights – once heard never forgotten.

Now nine years later, Cheapflights is one of the great British internet success stories. We have grown at over 50% a year.

Unusually for a British internet business, we have prospered in to USA where Cheapflights.com serves a similar purpose to Cheapflights.co.uk.

We also launched Cheapflights.ca in Canada, itself a bigger business now than Cheapfligfhts was in the UK when I first looked at it!

Roughly half our business is now in North America. we launched in Germany (CheapFlug.de) last autumn and are on the brink of launching another new international site.

We are helped now that we have a sophisticated publishing platform capable of being rolled out across different countries very quickly. And of course we have great relationships with the travel industry including companies such as Expedia, Travelocity, British Airways and Opodo all of whom we partner with in different countries.

We did want to float the business last year on the main market of the London Stock Exchange. We spent a small fortune on professional advisors successfully to achieve IPO readiness. However, the market was as a dead as a doornail and it looks like this year will be no different. So we are now focussing 100%v on our operations and are hoping for yet another year of record traffic, sales and profits.

For the travel industry Cheapflights is a cheap place to acquire high quality leads. We are certainly cheaper than traditional media and far more accountable. For consumers we are THE place to find a great flight deal and to avoid being ripped off.  We have a great business which should in fact benefit from this economic downturn.

You have invest money and time into some great web businesses, what has been the best business deal you have done?

Too early to say. It may well be Cheapflights; but until we have our exit I cannot make that call. As for the Howzat portfolio, these are early stage companies with huge potential. Only time will tell which is the best of these investments.

What advice would you give a Internet Entrepreneur trying to find funding for their Internet Business?

First try to avoid outside funding: use your savings to get going, and try to persuade family or friends to support you so that you can hold onto the equity. A successful internet business should not need vast amounts of capital, especially with the reducing costs of technology.

If you exhaust your personal connections, find some good angel investors. WAYN for instance was funded initially by the Founder of  Friends Reunited, Trivago by the guys behind the German version of Ebay.

And if you do need more significant capital there are a handful of  VCs with a track record of backing digital winners. Fund raising is not easy and in the current climate it is exceptionally hard. But a key quality of all successful entrepreneurs is persistance.

Running a Internet Business gives you choices and freedom to do what you want, when you want. What would you say the Internet Lifestyle is for you?

It is certainly a more flexible lifestyle than the traditional economy allows: but it is 24/7 and very, very intense. It is not for the faint-hearted. Especially in the Cheapflights early days (we had three employees at the start including me), the working hours were considerable. So you can forget “work life balance”.

And it was not particularly glamorous. I had to bank the cheques, buy the milk and complain to the landlord when the communal photocopier broke down.

And the competition (Telext backed by the Daily Mail, U-travel backed by Lord Hollick of Express Newspapers and Easyalue backed by Stelios) could have wiped us out if only they had been a bit better managed. This induced a state of constant paranoia which was very stressful.

The Internet Lifestyle allows you to work any hours you like, what’s the biggest benefit of this for you?

Like all entrepreneurs, I suppose I am a bit of a workaholic – to be successful you have to eat, breathe ,  and dream about your business.

That being said, I am a keen traveller, hiker and skier and at least with modern technology I am never too out of touch.

What would you say is the biggest single reason for your success?

Difficult to say: I boil it down to three.

Firstly, the right experience. I came to entrepreneurship relatively late in life, in my mid 30s. I had a background in finance and strategy consulting which gave me some useful skills. But then I worked for six years in a very successful and well-managed FTSE company reporting directly to its Chairman. That taught me how a very large business is managed. So when I am involved in the early stage of a business, I can readily conceptualize what it should look like as a larger concern. Finally, I have had a lot of cross-border experience having been educated in the USA and having worked for USA and European companies and having lived and worked in France, Germany and Spain. That has been a major contributor to my understanding of how to build a global business and how to deal effectively with colleagues and clients of different nationalities.

Secondly, perseverance. I do not give up easily.

Thirdly, the ability to attract and nurture talent. At Cheapflights, we have had some extraordinarily gifted individuals who have made a huge contribution to our growth. Most stay with the business. There are exceptions and, whilst I never liked losing good people, it was good to see  web behemoths such as Amazon and Expedia on the prowl for our team members.

The travel industry is one of the most competitive niche’s. What advice would you give a new webmaster trying to dominating their niche?

There are thousands and thousand of travel sites. The most successful ones are the ones which provide something very special for consumers, and who do the job well, week in week out.  They can be huge, they can be tiny.  But they must delight their users – otherwise they will wither and die.  This is true for all commercial internet sites not just those in travel.

Money is not the answer. Lord Hollick’s UTravel failed, as did Stelios’s EasyValue. And who now remembers Sir Bob Geldof’s effort which was called Deckchair.com?  It competed head on with many fine travel agencies and offered nothing special. So, despite a massive advertising campaign, it collapsed.

I understand that last year you stood down as the CEO of Cheapflights, why did you do this? Do you believe it was the right choice for the business?

It was a slightly selfish decision. We thought we were about to go public and I had no desire to run a UK public company. Having worked in public companies, I found the bureaucracy, the need to deal on a regular basis with analysts and the whole suffocating regulatory environment not to my taste at all. So I recruited a successor who had run a public company and wanted to do so once again. In any case , I had done eight years which made me one of the UK’s longest serving internet CEOs. So it was probably time for me to seek some new challenges.

What advice would you give to people just starting out with an online business?

Try to find ideas like Cheapflights which do not require a lot of capital. Cheapflights started in a n attic with sweat equity.Have a clear path to monetization which is tough in today’s economy. Be realistic with your planning. Above all, mind the cash!

If you could go back in a time machine to the time when you were just getting started, what advice would you give yourself regarding making money online?

Curiously, there is very little that  would change about how I handled Cheapflights. I did make one error and that was to try and diversify too quickly into other travel areas apart from flights. Happily we sold our non-flights businesses for a good sum and more than recovered our investment.  I should have focussed on the knitting. Nevertheless, Cheapflights was always profitable. I think we were the first UK company to charge for clicks, the same business model that has allowed Google to become the world’s largest media company. We also got in – very early on – an experienced finance director whom we could barely afford (he is still with the business).

What is the best advice you have ever been given?

Two bits of advice:

1) There are only two sorts of internet company: the quick and the dead

2) Hire for where you want to be going, not where you are now.

Thanks very much for the interview, Have you any plans (personal or business) that you can share with us about your future plans / goals / lifetime goals?

We are only at the very beginning of the digital revolution. This recession has not only clobbered traditional media, it has hastened the growth of  the internet sector as we offer services to consumers and advertisers very cheaply and effectively. But, like the automobile industry at the turn of the 20th century, we are at a very, very early stage.

So, I feel very privileged to be a part of this revolution and I want to participate in its further expansion, helping digital media companies provide services to businesses and consumers which they could not have even dreamed about just ten years ago.

Charles Darwin, who was born 200 years ago, said that it was not the strongest who survive but the most adaptable: and that is what digital media is all about.

If you want to learn more about David, follow him on Twitter!

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