What to Expect When Selling or Buying Websites – By Victoria Duff

by Colleen on May 22, 2015

There is an active investment market in websites. You might not be aware of this marketplace, but it is growing rapidly. Several very active web property brokers and website auctions are facilitating the purchase and sale of web properties every day.

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A website is an asset, whether or not it makes money. If it makes money or has a lot of monthly visitors, it can be a very valuable asset that investors clamor to buy.

There are a few basics involved in selling or buying any asset, including a website:

• the buyer’s letter-of-intent (LOI) to purchase,
• a period of due diligence that allows the buyer to examine ownership,
• records proving traffic and financial performance, and
• an escrow agent who holds the transaction deposit money from the date of the LOI until the buyer is ready to complete the transaction.

There are legal contracts, trademarks, copyrights, financial records, or the terms and conditions of the sale agreement to be negotiated. You might want to consult an attorney or accountant.

If you work with a web property broker, the firm handles the work of marketing, negotiating, and transferring the website between seller and buyer.

Records needed for a website sale

Traffic (unique visitors and page views, traffic sources, and backlinks)
Standard ways of proving these traffic and rank figures are Google Analytics and AWStats. These are easily activated by introducing a small amount of code into a website’s source code.
Ownership
Network Solutions provides a “WhoIs” lookup that will give you website ownership information for a domain name. The hosting provider can round out the information regarding ownership of the website. Provide information on trademarks, copyrights, and proofs of photo or graphics ownership or licenses. A buyer wants to know if there is potential liability from images that are just lifted off someone else’s site, without a license.
Financial Records
Records of advertising network payments, affiliate commissions, marketing expenses, hosting and maintenance expenses should be clear and well-organized. Include costs of content and web development as they are important expenses.

Using a Website Broker or Auction
A quick search for “website brokers” will introduce you to several firms. Take the time to visit their sites, examine their listings, and talk with their sales reps before choosing whom to work with if you are a seller. A buyer should work with any companies offering appealing sites for sale.

Most revenue-producing web properties such as websites, affiliate sites, or any web business; are handled by brokers who appraise the properties, perform preliminary due diligence, prepare marketing materials, and present the sites to their investor groups. Brokers also work on the Letter Of Intent, escrow, contracts of sale and transfer of ownership.

Website auctions generally require the seller and buyer to do more of the work of marketing and research, but are a good way to buy or sell websites that have only modest or no revenue.

Victoria Duff, Business Analyst with Latona’s, researches and prepares prospectus and presentation materials for web property listings.

This article appeared in issue 30 of FeedFront Magazine, which was published in April 2015.http://issuu.com/affiliatesummit/docs/feedfront-30

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