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How do they run an Ad Network legally?

by typoo999
5 replies
Hey guys,

I was just thinking how ad networks run legally?

For example, lets say I make $5,000 a month with "xy" ad network, how do they pay me? I mean most of the networks don't require me to send back any invoices. How do they certify their expenses to their publishers?

As far as I know, if I would be an owner of an ad network, and I would not require invoices sent back to me from my publishers, I would have to pay the taxes on all the ad revenues, and then pay out my publishers = that would kill my profit.

Please someone lighten me up! I'm kinda stupid in stuff like this.

Thanks!
#legally #network #run
  • Profile picture of the author SunilTanna
    Setup a business. In most countries, businesses are taxed on profit, not total revenue.

    So you have to have documentation of your income and expenses.

    Ask your accountant what precise documentation is needed, and how to calculate taxes, etc.

    Not having every possible conceivable piece of paper is hardly a unique situation for online business. Lots of legitimate businesses deal with lots of cash for example, And they seem to manage.
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    • Profile picture of the author typoo999
      Originally Posted by SunilTanna View Post

      Setup a business. In most countries, businesses are taxed on profit, not total revenue.

      So you have to have documentation of your income and expenses.

      Ask your accountant what precise documentation is needed, and how to calculate taxes, etc.

      Not having every possible conceivable piece of paper is hardly a unique situation for online business. Lots of legitimate businesses deal with lots of cash for example, And they seem to manage.
      Thanks for your reply! Yes, this is what I don't understand. Most of these networks don't require invoices sent back to them from their publishers (so expenses are not documented this way). How do they solve that?
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      Boom shakalaka!
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      • Profile picture of the author SunilTanna
        They keep a record of what they paid out, who to, and why.

        An invoice isn't the only method of recording a payment (actually an invoice by itself isn't even a record of payment, because therebis no proof it was actually paid, or when it was paid).

        Businesses pay for stuff all the time, not all of which stuff comes with an invoice. They just hav to keep their own records.
        Signature
        ClickBank Vendor?
        - Protect Your Thank You Pages & Downloads
        - Give Your Affiliates Multiple Landing Pages (Video Demo)
        - Killer Graphics for Your Site
        SPECIAL WSO PRICES FOR WARRIORS + GET THE "CLICKBANK DISCOUNT" TOO!
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        • Profile picture of the author typoo999
          Originally Posted by SunilTanna View Post

          They keep a record of what they paid out, who to, and why.

          An invoice isn't the only method of recording a payment (actually an invoice by itself isn't even a record of payment, because therebis no proof it was actually paid, or when it was paid).

          Businesses pay for stuff all the time, not all of which stuff comes with an invoice. They just hav to keep their own records.
          Your reply was very helpful, thank you! It seems I have to look after a new accountant...
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          Boom shakalaka!
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  • Profile picture of the author CyberAlien
    You would normally get publishers to fill out a W9 or W8-BEN form and then send them and the IRS a 1099 at the end of the year which shows you paid them out. Of course you need to keep records of everything, but that's how you let the government know that you paid out that money and that it was a business expense.
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