Eric Borgos Interview – Old School Internet Entrepreneur Making Millions Selling Websites Online

Hello Everyone

Today I am very pleased to introduce you to an amazing Internet Entrepreneur that was recently recommended by one of my readers to interview — Eric Borgos

Eric sold of some of his websites and domains including a large portal website called for $4,500,000! In this interview he shares with us how he made his fortune and how to go about selling your own website.

If you want to read more about Eric, then I recommend you check out his blog.

Could you describe what you do and how you earn your living Eric?

I run my own Internet company, which I started in 1995. For the first few years I made money by creating web pages for other people, but that was still basically hourly work, and my plan was to get rich, so eventually I phased out doing work for customers and just created sites for myself instead.  I had used much of the money I made from web design to buy domain names (they were $35/year back then), so I focused on creating sites on those domains.

Around 1/3 my income comes from my 9000 unused domain names, which are all parked. Domain parking is where I point my domains to another company and they put search engine type link results on all the pages, and then pay me a percentage of the income.

Approximately 1/3 of my income comes from selling my domains.  Usually I sell them because a potential buyer looks up that I am the owner and then makes me an offer, but I also sell some through brokers and through domain auctions. Some of my sales over the past few months include: – $2,500 – $1,500 – $1,500 – $15,000 – $1,000 – $1,000

The remaining 1/3 my income comes from 200+ websites I own, such as and These sites all make money from the banner ads that I put on them. I also run a big online florist at, which gets 50-100 orders a day.

I understand a little over a year ago, you sold and 170 related sites for $4.5 million, why did you decide to sell the site and how did it go?

The main reason I sold was so that I would not just be rich on paper, but instead I would have real money in the bank. and those other sites were around half of my total business, so if the Internet keeps doing well I will still make a lot of money, but if everything crashes I will at least have plenty of money to live on.  Also, I sold in January 2008, which was right before the huge stock market/real estate/banking/economic crash, and one of the reasons I sold was that I was worried about something like that happening. It actually has not hurt Internet businesses nearly as much as I had thought it might, but the point is that I was worried at the time that all my paper profits might evaporate.

The sale itself went fairly smoothly. I was originally hoping to sell for big money ($20 million? $50 million) like many of the other Internet company
sales I kept reading about in the newspapers, but I shopped the deal to several possible buyers and in the end had 2 bidding against each other, and $4.5 million was the highest I could get them to go.

Some other reasons I sold were: was very Web 1.0 website (like from the 1990s) and it needed somebody to give it a Web 2.0 type makeover.I never did any direct ad sales for, but a new owner could make a lot more money by doing that.I used low paying banner ad formats, but somebody else could redesign the site to accommodate higher paying ads.There were tax advantages for me to sell, instead of paying myself the income as a salary. By selling I paid 1/2 the tax rate (as a capital gain).I ran everything myself so if I ever died it would be hard for somebody else to keep things running, which meant much of the value would disappear.

The new owner has not done much with, other than have it focus more on video games. Ad rates in general on the Web are down, so his income is down, but traffic to the site is the same as it was when I owned it.

What advice would you give to a Internet entrepreneur thinking about selling their websites?

I would advise them to sell if the offer is good. It is common for a site to get popular and make some money, but it is much more rare to get a site to the stage where it can raise funding (like venture capital) and then expand it to make even more money. More often than not, the site fades away or at least never gets any bigger. Leave that financial risk, time, and effort to whatever big company is offering to buy you out. They probably have much better resources to handle it.

What did you decide to do with the $4.5 million? Did you just go and have fun or invest it into new business ideas?

Out of that $4.5 million, I had to pay a brokerage fee and income taxes, leaving me with around $3 million.  My plan was to put the money in CDs and live off the interest, since CD rates at the time were 5%. One of the reasons I sold for that price is that I calculated it would give me more than enough money to live on, even if I totally stopped working. Then soon after the sale, interest rates plummeted from 5% to 1% (and, that is before income taxes). So, at least until interest rates go back up, I am still under pressure to try to make more money. But, it is at least a lot less pressure than before, when I had no money saved.

I have not used any of the money for “fun”. I am just keeping it in the bank for now (in CDs). To me it is fun just having a lot of money in the bank.  None of my business ideas ever really require much money, so having more money has not changed the way I do business. My business still generates enough income so I can create new websites whenever I want to, plus I can always sell more domains if I need cash for something.

A lot of people who have a huge success go ahead and create another website, sometimes many websites. What advice would you give someone thinking of building a network of websites? Is one really big website better then 20average size websites?

Yes, part of my plan was to focus on a few of my other sites and make them big like I did with In the past year I have done massive site makeovers on and, but neither one is making anymore money now than before, so I have not had any luck with that. Ideally I think having one or two big sites is much better than many small sites because it is much easier to sell one big site for a lot of money, like I did with There are lots of buyers for big sites, very few that I have ever seen for a bunch of small site. Also, it is usually more complicated to run a network of sites, and your efforts are less focused.  Yes, 20 small sites might make just as much money as one big site, but in my opinion you will have a lot less potential of getting rich.

I understand you have run all your companies and websites from home, why did you decide to do this? How did you go about employing people and running a company if you never go to the office?

I love working from home, and have done so for the past 15 years. I could never go back to working in an office. Aside from my personal preference for it, it is much more efficient because I don’t have to spend time commuting or dressing up.  I usually hire people by email. Most of the time they start by doing one small project for me, like something I post on freelance type job board, and then if that works out well I keep giving them more work and then eventually I pay them a salary. Even after 10 years I have never met any of my workers, and most of them have never even spoken to me on the phone.  I am sure less work gets done this way, because I am not carefully monitoring the work everybody does, but on the other hand there are huge inefficiencies and costs related to having an office, so I think in the end it all pretty much evens out. Also, because I don’t need to hire people in one particular location like an office does, I can hire workers at much lower pay rates. Most are overseas from places like India and Romania, but even US workers are cheaper for me because they are willing to work for less money out of their homes.

I actually did setup an office in 2000 because I wanted to have a business address and try to function like a bigger company, plus I was working on trying to go public at the time and nobody wants to buy stock in a company run from the owner’s house, but after a few years I closed the office and ended up just having those same people work from their homes instead. Even with the office, I still worked from home and never went there (it was 3000 miles from where I lived). I had a friend of mine set it up in an office suite next to his own office and he hired the workers for me and kept an eye on things.

I understand you have worked in a few partnerships over your Internet entrepreneur career, what advice would you give someone thinking of partnering up?

I would strongly recommend against partnerships. In my experience they rarely work out. If you are desperate for money and have nothing to lose, then it might be worthwhile, but in general they just suck up your time and cash.  I have partnered on several ventures such as and, and every time I spend huge amounts of time getting things launched, and then eventually the site grows to a point where it needs cash or it will go out of business, so to avoid losing all the effort I already put into it, I help finance the site. But, I never ever get paid back. Even though the sites do well and continue to expand, there is never any “extra” money to do this.

The problems are not personality issues with my partners, or that we have different visions, or that they are dishonest. It is always the same exact problem, which is that unless a site gets large enough where it can raise venture capital, there will never be an extra money for me to get paid as a partner. Nowadays it is so cheap to hire people to do all the work for you, that if possible you should try to own the site yourself.

Running an 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?

I like running an Internet company because theoretically you can run it sitting on a beach using your wireless laptop. On the other hand, it has never actually been like that for me. I work 7 days a week, and even on vacation I check my email dozens of times a day. On the beach, I read business magazines (Business 2.0, Fast Company, Inc., etc.) and while looking at the ocean I think of business ideas or worry about my business.

What I like best about the Internet though is that things happen very fast. I do big deals sometimes in a matter of hours, and sometimes think of and then actually launch new websites hours later. No business plans or months of planning or months of wondering if something will work. You get almost instant gratification with the Internet.

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

Getting in early (in the 1990s) was a big help. Another plus was that I created many different types of websites at once, while many other people risk everything on one big site. I have found that many of the ideas I thought would make me millions never made any money, but other small ones (like were big successes. So, you never know what will work, you just have to keep trying.

Is there anyone that you look up to and model yourself on?

No. I like watching tycoons like Donald Trump and Richard Branson on TV, but I am in no way at all like them.  I think the Internet has created a whole new type of business mogul, but back when I started there were few books about people like that.

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?

I would have bough many more domains names back when they were still available. For example, I remember choosing between buying and I choose the shorter version, but of course I should have bought both. I spent 14 years working 100 hour weeks creating websites and running them, but the crazy thing is that I would have made more money if I had just bought twice as many domains and done nothing at all with them. I could have done zero work and just waited for the domains to increase in price.  Back then though I had no idea that was the best route to take, just as right now I am not sure what the best way to make money online is. Most of the new sites I create make little money, and I am not sure what the next big thing is going to be.

What is the best advice you have ever been given?

To be skeptical of anything that sounds too good to be true. Things are almost always more complicated than you think they are going to be.

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?

My goal is to keep creating new websites, in the hopes that some of them will get big and make a lot of money.

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