Why An Affiliate Deleted 13,164 Tweets Today

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

affiliate disclosure and tweet deletionI just watched a large Twitter account delete over 13,164 tweets because the account holder didn’t use an affiliate disclosure when promoting others’ products and services in exchange for commissions. The tweet deletes were a c.y.a. move designed to limit legal liability exposure.

That’s a shame because the tweets contained really good content, i.e. he gave out a lot of valuable content in the process of affiliate marketing.

And the sad thing is, he could have fixed the issue for any tweets he wanted to save. It would have taken just one call to an experienced Internet business lawyer to learn how to do it.

Affiliate Disclosure And Material Connections

Since December 1, 2009, Federal Trade Commission (FTC) guidelines have been clear that material connections — including affiliate status — must be disclosed so that the prospective purchaser has the key facts necessary (including your potential bias) in order to make an informed decision whether or not to purchase a recommended product or service.

This covers all of your marketing online and offline to U.S. consumers.

Some online marketers mistakenly believe they only have to comply when promoting on their websites by using the right website legal documents.

That’s not true. Disclosure requirements cover emails, social media (e.g. Twitter, Facebook), etc.

Marketing To The U.S. From Other Countries

What’s interesting is a fellow marketer on Twitter responded to the guy deleting tweets by saying the FTC’s rules and regulations didn’t apply to the marketer because he was based in another country.

That’s another mistaken belief.

If you’re marketing to U.S. consumers from anywhere in the world, the FTC has the ability to go after you for false or deceptive marketing practices.

Does the federal government go after foreigners for bad marketing practices? Absolutely. In fact there have been spammers sent to federal prison for years for violating U.S. law even though they never stepped foot in the United States prior to being arrested in their home countries and extradited to the U.S. to stand trial.

Material Connections Are More Than Just Affiliate Status

And remember, it’s more than affiliate status that needs to be disclosed. It’s all material connections that a prospect should know about.

For example, if you’ve reached an agreement with another marketer to promote to each other’s Twitter followers, Facebook friends, or email lists, that material connection should be disclosed.

Does Your Website Privacy Policy Protect You In Other States And Countries?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

website privacy policyIn the past, a U.S. business typically needed to be concerned about the laws of the state(s) where it did business (e.g. where the company was set up) and federal law. That’s not the case today if your business is online – with or without a website privacy policy.

For example, California and the European Union may attempt to apply their laws and regulations to your business…even if your company isn’t based in California or Europe. Both have strict privacy laws and regulations that may affect your website’s legal protection.

In fact, the EU adopted an 80+ page data protection regulation that went into effect in 2018. And California has enacted a new law that’s similarly complicated…and it goes into effect in 2020.

In other words, if your site has a website privacy policy that’s a couple years old, chances are you haven’t even addressed these potential threats to your business.

Now, you could ignore these risks. And maybe a government agency won’t come after you. And you won’t get sued by someone claiming you’ve violated their new legal rights.

Of course, the prudent thing to do is have a skilled Internet business attorney review your website for compliance issues and update your site’s privacy policy, terms of use, and other legal documents. As Benjamin Franklin said, an ounce of prevention is worth a pound of cure.

5 Keys To Selling An Internet Business

By | Business Contracts, Internet Lawyer | No Comments

selling an internet businessIf you had the foresight to create an online company years ago, you are likely ahead of the curve. According to Nasdaq, it is estimated that 95% of purchases will be through eCommerce by 2040. That means investors are motivated to get involved with eCommerce and internet business sales are booming. But what do you need to know when selling an Internet business?

The bad news is that a significant number of business sale transactions fall apart before closing. If you are considering selling your online business, it’s important to get informed so that you can maximize your profits and minimize risk.

Here are the top 5 things you will want to know when selling your online business:

1. Prepare your Internet business for sale

Before you publish your sale or start working with a website sales broker make sure your online business is actually ready for sale. Ensure you have written business contracts in place with key employees, suppliers, or contractors so they will remain with the business after the sale. Also make sure your intellectual property, spam, and privacy policies enable you to legally transfer information to the third-party purchaser. Have a professional look over (and supplement, if needed) your financial and tax information because you will need to divulge accurate and thorough financial information to potential buyers.

2. Determine your desired outcome

There’s more to selling an Internet business than simply deciding on a selling price. Determine how you would like to be paid (do you want to be paid a lump-sum or in installments?) and whether you will provide financing for the sale. Also, do you intend to stay with the business as a consultant or employee after the sale? If so, determine how long you plan on staying and what you want to be paid for your time (above and beyond the website purchase price).

Related Article: Sell An Internet Business – How To Avoid 3 Costly Mistakes

Do not make the mistake of offering ongoing consulting services without a solid agreement governing the terms of your consulting. Many internet business owners get stuck doing free work 90 days to a year post-sale just to keep the business afloat until the buyer is up to speed. You can avoid that.

3. Conduct a pre-sale legal compliance review

You will want to ensure your website is not violating any intellectual property, spam, or privacy laws before you even consider posting your business for sale. Legal issues in the business will reduce the value of your business, or worse, prevent a sale entirely.

4. Use the right professionals

There are plenty of well-versed professionals with respect to selling traditional brick & mortar businesses, but selling an online business is not the same. You will need to work with a professional with specific knowledge and experience in eCommerce business sales. An Internet business lawyer can help ensure you have the appropriate legal documents and field questions from potential purchasers to bring your deal to the closing table while minimizing risks.

5. Protect yourself against risks

Selling any business carries certain risks. Sometimes competitors act like a prospective buyer in order to gain confidential business information that they will use to compete with your business. Be wary of frivolous prospects by carefully reviewing letters of intent and seeking the advice of experienced internet business counsel. You also want to be cautious of contracts and legal documents provided by potential buyers, because those documents will be written in favor of the buyer, not you!

Also, if you plan on financing part of the sale, make sure you secure that part of the sales price with collateral to minimize the risk of nonpayment. Without collateral, it may not be financially profitable for you to pursue legal remedies in the event of nonpayment. By securing your financial agreement with collateral, you are protecting your ability to collect if issues arise.

While these are the fundamentals to selling an internet business, you will want to perform due diligence and learn as much as you can about this online business transaction process to ensure you get maximum value.

Do You Need Help Selling An Internet Business?

If you have a motivated prospective buyer and time is of the essence, it will be worthwhile to contact an experienced attorney right away. Attorney Young helps entrepreneurs sell their eCommerce business for a fair price while reducing your legal risks. If you are ready to sell your Internet business or simply want to learn more about the process, schedule a phone consultation with Attorney Mike Young and he will help you develop a road map to ensure you get what you want from the deal.

4 Secrets To Effective Search Engine Marketing Agreements

By | Business Contracts, Business Lawyer, Internet Lawyer | No Comments

search engine marketing agreements lead generationMore than 80% of shoppers do their research online before deciding which business to work with. As a business owner, you know you need to take advantage of search engine marketing (SEM) for lead generation so that potential clients can discover your business. A solid SEM strategy can help clients find you and can set you apart from your competitors. However, this type of marketing is complex and requires specialized knowledge. Rather than wasting hours learning and tweaking your own SEM strategy, it’s a wise business decision to outsource this important task to industry experts. This is where Search Engine Marketing Agreements become a necessity.

Like other business agreements, a written SEM contract is important for protecting your legal rights while reducing the likelihood of misunderstandings that lead to nonperformance and breach of contract. Here are four things you should know about SEM agreements before you start negotiating with a SEM agency.

1. Don’t assume free online templates will work for you

Internet Business Lawyer Mike Young has worked with numerous online businesses over the past 25 years and seen countless contract mistakes. One of the biggest and most common mistakes business owners make is using a free contract template found online. Because many free templates are not written by an experienced Internet attorney,they fail to address important topics that leave your business at risk. Even worse, none of the free templates you find online are written in your favor, based on your specific needs.

2. Don’t borrow someone else’s agreement

Another common mistake is to copy and paste someone else’s search engine marketing agreement you’ve found online. If you have not been given explicit permission to copy someone else’s contract, you may be committing intellectual property theft. Also, while contracts may look similar to the untrained eye, all contracts vary according to a party’s specific needs. Every contract is (and should be) unique. When you use someone else’s agreement, you’re using a contract that made sense for them, but that does not mean the contract will work for you or your business. The description of services, payment terms, intellectual property ownership, and warranties will vary in virtually every contract. Simply copying and pasting someone else’s agreement will not ensure that your business is protected from risks or that your expectations will be met.

3. Don’t forget the basics

There are some basic provisions you will want to include in every search engine marketing contract. You want to make sure you identify both parties to the agreement plus their contact information. You want to define the term (length) of the contract and whether any renewals will occur automatically. The services being provided should be described in detail along with the payment terms. You will also want a contract that clearly outlines how and when the agreement can be terminated for non-performance or other disputes.

4. Protect yourself from special risks

Marketing content and strategy are both considered intellectual property. It is important to address who owns the intellectual property created as a result of your search engine marketing agreement. The agency you choose to work with will likely want to maintain some form of ownership over their work product, but you may want to ensure you have a right to re-use certain marketing phrases if you decide to switch to another SEM provider. You’ll also want to ask if your SEM agency will be using any subcontractors or relying on any third-party services and discuss what will happen if their subcontractor or third parties make a mistake. Their answers to these questions should be committed to writing in your SEM contract to protect you in the event a dispute arises.

Likewise, you will want to include a dispute resolution clause that details how you will handle any disagreements (will you arbitrate or mediate before going to court?) and where you will handle any disputes and what laws will apply (preferably the laws of your state). Also, address warranties if your SEM agency plans on guaranteeing any results (be wary of guarantees if the agency does not want to confirm their promises in writing).

Lastly, determine who will be liable for the work product, especially in the case of intellectual property theft or infringement-you definitely don’t want to be held liable if your SEM provider uses someone else’s intellectual property.

As you can see, your SEM contract should be unique and tailored to your specific needs. While there are a number of clauses all SEM agreements should include, the terms of those clauses will vary according to your needs and expectations.

Do You Need Help With Search Engine Marketing Agreements?

An experienced business contracts lawyer can prepare a customized SEM contract template for you to use on one or more SEM projects. You can get an SEM agreement prepared by Attorney Young for a flat fee as part of our firm’s Business Contract Legal Protection Package.

6 Secrets To Buying An Internet Business

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

buying an internet businessAre you considering buying an Internet business?

You’re not alone! According to Nasdaq, it’s estimated that 95% of purchases will be through eCommerce by 2040. That means individual investors are seriously looking at internet businesses to jump into the eCommerce boom.

Like all investments, purchasing a website carries certain risks. Not all deals are as good as they may seem. It’s unwise to jump into the eCommerce market without performing due diligence. The following contains detailed steps you should take to maximize your investment and protect yourself from lawsuits.

1. It’s practical to use a broker to meet sellers, but don’t use their forms!

Using an internet business broker is a great way to find motivated sellers and potential opportunities when buying an Internet business. Some of these brokers will even offer in-house legal forms to help you during the purchase of a website.

Buyer beware! Because most of these business contracts are not written by lawyers, and even worse, they are not written with your best interests in mind. There is no way to ensure you are adequately protected when you use broker-provided forms — unless you have an experienced business and technology attorney review the contracts for you.

2. Don’t makes the same mistakes as Microsoft and Alibaba investors

Even tech giants make mistakes. When Microsoft purchased LinkedIn, they purchased an online business with a disastrous financial model. Ultimately, they paid 7x Linkedin’s annual revenues (not profits!) to close the deal. While they may have had a legitimate interest in Linkedin’s data and platform, their valuation did not make good business sense and they took a huge loss on the purchase. Microsoft may have had the funds to bail out an unprofitable venture, but as a solopreneur you probably won’t have as much financial wiggle-room.

Another huge eCommerce investment blunder was the Alibaba.com initial public offering. While the company’s founder, the Chinese government, and Wall Street underwriters benefited from the IPO, unsuspecting investors set themselves up for failure.

Because the Chinese government restricts foreign ownership in technology companies, investors were only able to purchase equity in an offshore shell corporation that exists only on paper. The problem with this is that Alibaba is under no obligation to actually disclose or transfer profits to the shell corporation. Even worse, the shareholder contracts are only enforceable as long as the Chinese government agrees that they are. Basically, shareholders have no way of ensuring that they ever see any profits; they spent $93/share on a virtually worthless piece of paper.

As discussed below, it’s on you as a potential buyer to perform your due diligence before signing any contracts.

3. Perform a legal diagnostic on the website before purchasing

An experienced Internet attorney can help you perform a legal diagnostic of any website you’re considering purchasing to identify legal risks that may exist on a seller’s website. You don’t want to take ownership of a website only to find out the previous owner infringed on another’s intellectual property. You are looking for an investment when buying an online business, not a lawsuit!

4. Prepare a non-binding letter of intent before entering any contracts

When you first start negotiations with a website seller, you will want to protect yourself legally before you ever enter a legally enforceable contract. With a well-written non-binding letter of intent, you can maintain your ability to walk away if you discover any information that makes the potential deal unattractive.

5. Ensure your legal documents address dispute resolution

Sometimes deals go sour. The best way to protect yourself is to outline what you will do if a dispute occurs long before the dispute arises. Internet Business Attorney Mike Young suggests including alternative dispute provisions like mediation and arbitration that will help you work out the dispute without the need to go to court (saving you time and money). However, you will want to create an exception for intellectual property infringement and non-compete disputes so you can head straight to court if either of these issues arise.

6. Know what you’re actually purchasing

Last, but not least, make sure you know what you’re purchasing. Make sure you will have ownership over all intellectual property and ensure the previous owner legally owned all images and content. The last thing you want to find out is that the website you’ve purchased has stolen content or that the seller retains ownership over the content they created.

Do You Need Help Buying An Internet Business?

If you’d like legal help buying an Internet business, schedule a phone consultation with Attorney Mike Young today.