Early pay-day: Pakistani sells web start-up for Rs9.5 million

Gagism.com hosts comics, jokes and funny images; it earned $15,000 per month in ad revenues prior to acquisition. PHOTO: FILE

Melbourne-based firm Westendmoney acquired the Karachi-developed website Gagism.com – a community-driven blog that hosts comics, jokes and funny images – in May 2012. The Australian firm wanted to use Gagism as a humour brand for a much bigger web entity, said Gagism Founder Farrukh Zafar in an email.

Gagism serves as an entertainment portal for those who understand English, Zafar said, thus it caters to a global audience with the US being its largest traffic source followed by Australia, UK and Canada.

Before its acquisition, Gagism was making $15,000 per month in ad revenues while the site even hit one million daily page views in early April, Zafar said.

Zafar and his team members might not have sold the website site if its traffic had not dipped below 400,000 page views a day. That’s when they decided to put the website for sale and posted on Flippa, an online listing site, known for selling and buying websites.

The story of Gagism is a good case study for young IT professionals, who are more interested in start-ups than doing a job. It was job insecurity that led Zafar to become an entrepreneur.

It all started back in October, 2011 when I began thinking about launching a humour website, Zafar said. “The fear of losing my job at LG where I was a Digital Marketing Specialist during the season of mass layoffs, made me work night and day to establish something substantial,” he told The Express Tribune.

Given the financial crisis the company was going through, Zafar said, he was sure that he had to leave that job soon – the recession was getting big on his former employer and downsizing had started taking place, according to him.

“I temporarily started Gagism in October but the traffic was so huge that I had to shut it down, foreseeing the lack of funds to buy a bigger server that could handle the immense traffic that was pouring in,” Zafar said.

Zafar partnered with Salman Saeed; the two re-founded Gagism on December 1, 2011 – after getting their funds together, he said.

“Our main sources of traffic were Facebook, StumbleUpon and Reddit; but in all this time, StumbleUpon was the craziest catalyst that worked at that time,” Zafar said. “StumbleUpon alone, was sending around 80,000 to 90,000 unique visitors on a daily basis, in the very first month,” he said, adding, “With firm support from Facebook and Reddit, we started growing as a community.

“When we reached the million view mark; it was all due to StumbleUpon’s traffic floodgates,” Zafar said.

Zafar finally left LG himself to set up Gagism, a move that paid off for Zafar. Even if he kept his job, he wouldn’t earn Rs10 million in just six months with a monthly remuneration of Rs35,000.

The development will also encourage young IT professionals to launch a start-ups instead of working for someone else, especially when they can earn more than what Pakistani IT industry is offering in remuneration – the highest annual salary for IT professionals with three to five years of experience is Rs112,175, according to survey conducted by Pakistan Software Houses Association.

It may however, require some skills and knowledge – apparent in the case of Gagism.

An industry expert told The Express Tribune that acquiring websites with high traffic has become a common practice. The traffic is then diverted to one’s own website –referred to as referral traffic in the IT world.

There are a bunch of young professionals, who share links of their websites on high traffic networking sites and attract millions of visitors to their own site, said an expert. It requires skills though, he added.

“In 2009 and 2010 when Facebook was growing its traffic, users made pages, linked them and ended up with a million users. They, however, couldn’t monetise the traffic,” he added.

Sites like Gagism, lolhappens.com and lulzz.com are a few examples working on this model, the expert said.

Published in The Express Tribune, July 28^th, 2012.