Projection of NetTaxi revenues. Very soon, MyMusicCard will be the exclusive music listing on the NetTaxi web site. NetTaxi is a web mall which has grown in popularity from 80 million page views per month when this deal was announced to 90 million page views per month as recently reported by Philip L. What this means is that if a person goes to the site and views 10 pages (the average according to REW's source), that is 10 page views. Thus, 90 million page views per month divided by 10 pages equals 9 million people visiting the site per month. We will assume only 7 million people visit the site.
According to REW's source, 3-5% of these people are looking for music. We will use 3%, so 210,000 people each month click on the MyMusicCard site. Not everybody who is looking for music will actually buy anything after they get to MyMusicCard. We will assume that 25% of the people who visit the music site actually make a purchase (52,500 people). Of the buyers, half (26,250 people) only buy one CD. At $1 profit per CD, that's $26,250 in CD profits for that half. The other half of the buyers buy 1 CD and a MusicCard. That's another $26,250 in CD profits for the second half of buyers. I am assuming TSIG splits the card revenue 50/50 with NetTaxi, so 26,250 cards x $5 = $131,250. That's a total gross profit of $183,750 for the month.
Because the statistic of 3-5% of the people visiting the web site are looking for music reflects the probability of a person looking for music in any given single month, and way understates the general consumption level of music overall, the same scenario can be repeated for each month. Thus, $183,750 per month annualizes into $2,205,000 gross profit per year.
The above information is summarized below.
***NetTaxi Gross Profit Projection***
NetTaxi web site has 90,000,000 page views per month
The average visitor views 10 pages
9,000,000 people visit the web site per month
Assume only 7,000,0000 people visit the site
3-5% of site visitors are looking for music
Assume 3% or 210,000 people click on MyMusicCard site
Of the 210,000 visiting the site, 25% or 52,500 actually make a purchase
Of the buyers, half (26,250 people) only buy one CD ($26,250)
The other half of buyers buy 1 CD and a Music Card [$26,250 + $5(26,250)] or $157,500
Total monthly gross profit is $183,750
Annualized gross profit is $2,205,000
Gross profit projections for the 12 months July,'99- June,'00 for the deals analyzed so far:
a) FBLA $12.5
b) Signature Group 4.5
c) Lifetime Learning 372.
d) NetTaxi 2.2
Total Gross Profit $391.2 million
Thanks go to Barney for insights shared regarding NetTaxi.
Regards, Suzanne
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