Unglue.it is the main business activity of Gluejar Inc., which is incorporated as a for-profit entity in the state of New Jersey. The goal of the Unglue.it business is to bring book lovers together to fund Creative Commons licenses for ebooks, which can then be made free to everybody, everywhere. Unglue.it charges a 6% commission on successful ungluing campaigns. We hope that we’ll be able to unglue enough books to make Unglue.it a sustainable business.

We think it’s important to make the business side of Gluejar (and thus Unglue.it) as transparent as possible, so that supporters of unglue.it campaigns will understand what’s being done with the 6%. To that end, we’ll periodically report here on our finances.

We started building Unglue.it, and signing up rights holders last year. For the year 2011, Gluejar had operating income of $1556 (consulting work), and operating expenses of $230,293, for a net operating loss of $228,737. Operating expenses were dominated by payroll expenses of $158,463 and contract work totaling $31,406.

The website opened in preview mode in January, and launched in May. For the first six months of 2012, our income was $1216 and our operating expenses were $145,601. Payroll expenses were $107,740 of that, professional fees (legal and accounting) were $12,812. The net operating loss was $144,385.

Obviously, we have a long way to go to make this a sustainable effort. We’ll need to unglue $6.3 million worth of books to recoup our operating loss-to-date.

Gluejar is funding this effort from the proceeds of selling its previous business, Openly Informatics, to OCLC. It’s likely that we’ll need to seek outside funding to get us to the break-even point, but for now we’re trying to go as long as possible without so that we can keep the mission of ungluing as many books as we possibly can at the focus of all our effort.

For those of you who worry about Unglue.it’s ability to reach that break-even point, it’s important to note once a book is unglued it remains unglued- neither Gluejar nor the rights holder can revoke a properly granted Creative Commons license.

For those of you who worry that Unglue.it will amass huge market power and unfairly dominate the funding of the book industry, it’s important to note that we’ll have some of whatever it is you’re having.