Posted by the Ecosia Team on Mar 26th, 2013 at 5:32am
It’s been an exciting and challenging start to 2013 at Ecosia.
As some of you know, we’ve been hard at work on a relaunch that will improve several aspects of Ecosia’s service like how we donate our revenue and the quality of search results — plus a bunch of exciting new features. An unprecedented amount of time, energy and funds have been invested into developing a solid, thoughtful and creative new version of Ecosia — and we’re excited to share the beta version with you soon!
But no worthwhile endeavor comes without challenges, and Ecosia has had its fair share over the past few weeks: first, we had technical problems with our search feed so that we had to switch to a paid service. The switch ended up costing us as much as a thousand dollars in fees per day, which is more than we usually earn from search ads. Next, one of our most important EcoLink partners paused its partnership with Ecosia until we change the way we implement their EcoLinks. This resulted in a sudden and drastic decrease of Ecosia’s income, due to the importance of the partner.
The good news is that all of these difficulties will be temporary: The upcoming new version of Ecosia will have free search feeds again, and our most important EcoLink partner will also be back on board. We expect to launch the new version in just a few weeks.
In light of the reality that our costs have temporarily increased and revenue has decreased, however, it was necessary to carefully reconsider our finances for the next few weeks: We have taken the difficult decision to donate less than 80 percent of our revenue until Ecosia relaunches in a few weeks time. More specifically, we have agreed with our partner WWF to temporarily reduce the amount of donations to 20,000 EUR during February, March and April. This is the maximum amount that we feel we can currently afford given the current circumstances. As soon as we launch the new version, we will be able to increase the funding amount to normal levels again — and likely even higher.
We hope the relaunch of Ecosia will help our large and supportive community of users understand why we had to choose this path. But we can already tell you that the new version of Ecosia will be even easier to use and more effective in its environmental, social and economically sustainable impact.
We can hardly wait to show you what we’ve done, so stay tuned over the next few weeks for a chance to try out the beta version — with the official launch following close behind.
It’s going to be awesome! :)
Christian Kroll & Your Ecosia Team
Update von Christian Kroll (2.7.2013):
Hi again everyone,
I want to thank you for your questions and comments over the past few months. We’ve worked hard to resolve the above-described issue, while continuing full-speed ahead with development of the new version of Ecosia.
Today, we’re happy to announce that donations since June have been restored to the full 80-percent rate. And with that, I’d also like to offer a more detailed explanation of the circumstances surrounding our earlier decision:
Ecosia’s donation rate of 80 percent is unusually high. Most non-profit organizations don’t manage to operate on just 20 percent their income, and the effect has been that Ecosia hasn’t had the opportunity to build up capital. What’s more, most of our operational expenses are fixed (servers, employees, office rent) meaning that if income drops unexpectedly, Ecosia could face serious problems.
This is just what happened in March when our most important EcoLink partner jumped ship. In one fell swoop, our revenue dropped by some 30,000 Euros, and in order to rescue Ecosia’s liquidity, we made the decision in March to temporarily reduce our rate of donations as we continued with development of the new Ecosia version.
Another complication Ecosia faces is a major time lag between the generation of advertising revenue and the point when Ecosia receives that revenue: it takes our partners about three months to process and transfer each payment. Meanwhile, Ecosia transfers its monthly donation payment as soon as possible, which again, can make fluctuations in income difficult to navigate.
Theoretically, we could have applied the reduced donation rate to future months at the time of the decision (April, May, June and July). But that would have resulted in two months of both increased costs and decreased revenue — which would have posed an imminent threat to Ecosia’s liquidity. This made a postponement of the donation reduction until the coming months impossible: the three-month revenue payment lag meant we would have to reduce donations immediately.
Thanks to this decision, we were successful in building up a small buffer, which is how we were able to return the donation rate to 80 percent starting in June. This buffer turned out to be critical in other ways too, since development of the new Ecosia version will indeed take some more time: negotiations with key partners are taking longer than originally expected.
I hope this clears things up a little, and we ask forgiveness in taking so long to explain the situation. Our small team has been wrapped up in development work and wasn’t able to meet every question with the definitive answer it certainly deserved. In the meantime, we’ve updated our donation receipts and will make sure to keep these current in the future.
We thank you all for your continued support — and we’re looking forward to sharing the new version of Ecosia with you all soon!
Christian Kroll & Your Ecosia Team