I want to buy an existing website to take it over. Um, how do I do this?
September 8, 2013 4:51 PM   Subscribe

I am an interested in buying a website that already exists. Not just the domain name -- I want all the existing Wordpress infrastructure and content + its social media presence (Twitter and Facebook). Basically, I pay for all the admin passwords and takeover. The thing is, I know the owner and I think our professional relationship is somewhat tenuous, so I'm not sure how to go about making an offer. I'm also not sure what a good offer would be or how to go about doing it. Sorry this is so long, but here's the situation:

The owner: I know the owner, but I don't really trust her so I wonder if I should make an offer anonymously through a broker. I have contributed to this website and worked with the owner, but generally have found her to be very unprofessional and quite frankly, the value I've brought to her website is above the effort or standards she has set. I am a paid professional at this and have been doing it for her site (for free) for fun. Now I want more control over the product to raise the quality and get more out of it. For background: a new market, essentially, was created last year by the founding of a new professional organization and this woman founded her website immediately to get in at the ground floor -- that was about a year ago. Now when you google this organization, her website is at the top of results and people in this industry follow it. (I am sorry for being vague about what the website is about, but I'm afraid if I get too specific, it could tip her off in case she reads AskMeFi. This market is covered by a lot of websites and outlets, but this is the only website I know of devoted entirely to this new market.) I think the woman who made the website did it really as a content mine and for all I know, her plan all along was to eventually sell the site after the market had a few years of growth since it's a great domain name. (That's speculation on my part.) I'm not sure she'd be willing to sell, but maybe. The owner seems to build websites that are designed to just sit and collect traffic, like a website that will convert a file for you or a website with some sort of niche calculator on it. The site I want to buy is one where she has copied sites kind of like Deviant Art or Bleacher Report by having other people produce content for the site -- she doesn't actually do anything herself. Recently, she's gotten even lazier, having the homepage of the site aggregate links to other websites with new posts related to the site's topic.

The website: I don't want to pay more than it's worth. (Obviously, I could start my own website, but I don't know how to build websites and I am not really interested in designing from scratch, starting with zero content and earning new readers one by one. I like the idea of existing infrastructure and existing audience.) I've checked some sites that supposedly measure the values of websites to see what it's worth -- ValueSite says $250, mustat says $200. Alexa ranks the site around 3,000,000 globally and Alexa says it has 25 sites linking in, 2 page views per visitor and 10 percent search traffic. I don't know if I can see how many visitors it gets daily. Quantcast says the site's rank is about 600,000 (that might be in the U.S., not sure). The site has about 8,000 Twitter followers and 2,000 Facebook likes. I was thinking maybe I could offer like $500?

Buying: This is the part I'm especially clueless on. I'm not sure whether if I do it anonymously, she will think the website has a lot of potential value and hold tight. Similarly, maybe having a fancy brokerage company make an offer on my behalf might make her think someone with deep pockets is offering and try to get more money. I do not have deep pockets. On the other hand, I'm also not sure if she would take me seriously if I reached out to her directly and asked about buying -- besides, as I said, I don't trust her (...she has lied to me when she hasn't made updates or posted content I created, but then has seemed annoyed that I have started producing content for other websites that pay me, even though she doesn't pay me). Could I go through a website brokerage company and buy it anonymously? Should I ask a friend or colleague to make an offer in their name by reaching out casually? I don't know if she'd be willing to sell or not, but how could I approach her? Would $500 be reasonable? Too high? Too low? I could spend $500 for something like this but much more than that seems like a lot. I'm afraid she'd want like $1000-$5000, which seems like a big investment since I don't even know if this site would ever make money. I don't it generates much advertising revenue. And then, I see these website brokerage companies offer website escrow -- I have no idea what that means. So the buying process is a mystery to me.

I'd love any sort of guidance, advice, experience, analysis, etc. I'd love to make this happen. Thanks.
posted by AppleTurnover to Computers & Internet (19 answers total) 6 users marked this as a favorite
I wouldn't pay much attention to those online valuations. Maybe just fire off an anonymous email asking for a BIN price and take it from there? From what you mention, the site is probably not worth much as a financial investment. So the price is really about what it's worth to you both.

For $500 I personally would gamble and skip escrow and any formalities. The chances of a fraud 'sound' slim compared to the costs and time involved.
posted by molloy at 5:27 PM on September 8, 2013

I suspect this might cost more than you're hoping here - a "great domain name" on its own could go past $500, and that's not counting the content, brand recognition and industry attention, Facebook/twitter/etc.

She doesn't sound like she'd be fun to deal with, but just asking her what she'd sell for might be your best option.
posted by ethand at 5:31 PM on September 8, 2013

Response by poster: To clarify, the domain is great for this specific niche, but in general isn't anything special. I'm sure GoDaddy sold it for $9.99. It's not mainstream and it may never be. My hope would be to make this the No. 1 site in this niche, in terms of both rank and reputation, which it isn't right now -- but I absolutely think I could get it there.
posted by AppleTurnover at 5:40 PM on September 8, 2013

Be sure to get a lawyer involved to draw up a contract, even if the legal fee is more than you pay for the site. Bummer to get successful and have a "oh you didn't pay for that small bit of IP".
posted by sammyo at 5:51 PM on September 8, 2013 [1 favorite]

Every .com on the Internet initially sold for no more than $35/year but that doesn't mean it's not worth a crap ton more today, even if it isn't mainstream.
posted by FlamingBore at 5:55 PM on September 8, 2013

I wouldn't sell basically any website I've worked hard on for $500. It sounds like she has gotten a lot of (free?) hard work from talented people like you that have built the site into something that is probably worth some money to get.

If she loses interest and stops updating it, and you wait a few months, then $500 as an informal exchange (albeit one with a contract backing it) seems feasible, beyond that, I'd guess that the only way to get her to take you seriously is making an offer in the thousands (like $2k, plus or minus .5)
posted by arnicae at 5:57 PM on September 8, 2013 [5 favorites]

My experience is that people tend to grossly overestimate the value of their websites/web presence. Sadly, this over-estimation is only compounded when someone offers to buy it. I doubt you'll get it for less than four figures, regardless of value.
posted by smoke at 7:47 PM on September 8, 2013 [2 favorites]

It's really hard to give specific pricing feedback without knowing what you're talking about—which, I understand, you have good reason for obscuring. But in very general terms, I'd agree with other commenters that $500 is relatively low, essentially unusually or unreasonably low, for the sale and transfer of any kind of a high-ranking website. If you can't afford to pay four figures, then I'd suggest tailoring your expectations.

I don't do this for a living, but I've been involved in a few similar transactions. (This is not legal advice, and I'm not your lawyer. Seek licensed counsel in your jurisdiction.) Generally speaking in any kind of business deal, I would advise taking a long, cold look at the entire situation as soon as you find yourself uttering aloud, "I don't trust her." That's a big red flag and if a transaction does materialize, you may find yourself regretting having ignored that feeling.

In Internet transactions specifically, I harbor personal skepticism about the continued value of URLs. Once upon a time, they were where it was at. Today everything is links: links from other websites, links from email, links from Twitter; and if somebody is going directly then half the time they're typing "Amazon" into Google, not "Amazon.com" into their browser's address bar. If you're buying content that can't be replicated or replaced, that's one thing. If you're buying her out so she can't compete with your presence, that's a valid business strategy. But if you're buying because you like her Google ranking, Google is fickle. Especially if you're doing this partly for personal enrichment and not because you see potential profit, I'd suggest giving real consideration to whether it wouldn't be more fun to build the site you envision from scratch at 1J66ME9F4XDN.com and just overtake her popularity by doing it better.
posted by cribcage at 7:53 PM on September 8, 2013 [2 favorites]

Those valuations sound like they're for the domain name only, not the value of the site itself. You clearly think it's a great domain name, so those valuations, for the name alone, are probably low. It's difficult to value an existing business, but obviously money has been spent to develop the site, and there's a certain value in being the early site for a topic.

Let's say you had a comparably good domain name. What would it cost to develop the site, presumably with forums, data aggregation, etc.? That's where the value is.

Business brokers charge 10% of the sale price, and I have not been wildly impressed. I used escrow.com with good results. A buyer used godaddy to transfer a domain name, and they were useless. How to approach the owner? Owner, do you ever think about selling somesite.com? You know I love working on the site, and if you ever decided to stop working on it, I'd hate to see it abandoned.
posted by theora55 at 8:20 PM on September 8, 2013

Response by poster: I think the valuation websites should've taken into account the ranking/traffic, outside sites linking in, etc. and I believe they estimate how much the site can earn in ads, which would be it's main (if only) revenue stream. I honestly don't think this website really makes any money. The value in it right now would be that she would be interested in this topic and the access the website gives her to the industry, and the possibility that in a few years it will become worth more. She had at one point told me if it became a money-making venture, she'd hire me to be the editor. She did solicit a lot of advice early on from me because I am a professional in this area and I was happy to make it better. I don't think she's liked that I've started doing paid work for other websites, but what can she expect?

I've also noticed her involvement has gotten less and less and the site has very little original or up-to-date content lately. Maybe I can test the waters in a while as her activity continues to taper off. Still not sure if I should do it as myself or anonymously. This is a little dicey. But I am appreciating all the responses so far. Anymore would be great.
posted by AppleTurnover at 8:28 PM on September 8, 2013

I was thinking maybe I could offer like $500? I think the valuation websites should've taken into account the ranking/traffic, outside sites linking in, etc. and I believe they estimate how much the site can earn in ads, which would be it's main (if only) revenue stream. I honestly don't think this website really makes any money.

Almost none of this is relevant to the valuation of a niche website. She has an established, trusted brand recognised in your industry, and even without knowing the site's traffic numbers, you know she has built significant social media reach and credibility. And while I don't know what your industry is, it is hard to imagine that running this site does not add value to her professional contacts, credibility and employability.

$500 might buy paid editorial or a handful of Tweets, but I would be extremely dubious if it bought your that website. And I would be cautious about leading with such a lowball offer and you may well offend.

I know the owner, but I don't really trust her so I wonder if I should make an offer anonymously through a broker. I have contributed to this website and worked with the owner

Don't do this anonymously unless you want to burn every bridge you have with this woman and give her legitimate fodder to quietly trash your reputation in the industry. Your approach seems sneaky and can be spun as sneaky and you just want no part of that.

I'd just email her and straight up say "Hey Jane, I've been thinking about Website.com and am idly wondering if you might have any interest in selling the site."

If she says yes, ask her to throw out a number and then add on the social media stuff to that.
posted by DarlingBri at 8:42 PM on September 8, 2013 [9 favorites]

I agree with DarlingBri.

Why don't you ask her what the asking price is (provided she wants to sell)? That way you can make a counter-offer and take it from there (and stay positive even if she says no). That way even if she doesn't agree to sell it to you at first, you will be the first to pop in her brain as a potential buyer when she realizes she doesn't feel like working on it anymore and that she'd rather sell.
posted by omar.a at 9:01 PM on September 8, 2013

You should spend some time on flippa.com learning what similar sites are worth. It's a very active marketplace with a lot of data for you to learn how sites are valued. $500 is impossibly low for most domain names with any real value these days.
posted by carlodio at 9:05 PM on September 8, 2013 [2 favorites]

I'm also in agreement with DarlingBri. I work in website sales and acquisitions, and the valuation provided (estibot?) is almost certainly too low.

MeMail me if you'd like links to resources on this — both on valuation and on the nuts and bolts of transferring ownership.
posted by third word on a random page at 10:24 PM on September 8, 2013 [1 favorite]

Don't throw out a number. Throw out a feeler as to her receptivity to even entering into this discussion. I too think you are grossly undervaluing her soft assets (she jumped on a strong trend early, teed up the market, and you are validating her efforts by your interest in it) and I can guarantee those elements alone add up to more than $500 -- a number she well may be offended by. I'd follow DarlingBri's excellent advice.

Or, build it bigger and better and dust the competition.
posted by thinkpiece at 4:20 AM on September 9, 2013

Just as a point of comparison: my own website makes no money at all (in fact, it costs me money) but I wouldn't sell it for $500. I think you should forget about those "valuations" and just find out how much she wants for it. Whatever she's willing to take for it is the price; everything else is irrelevant.
posted by languagehat at 6:23 AM on September 9, 2013 [2 favorites]

I have a domain that I regularly am offered thousands of dollars for. ValueSite says it's worth about $20. I wouldn't take it very seriously.
posted by Jairus at 7:57 AM on September 9, 2013

People who own websites have a value attached to them that is not really reasonable. Yes, you should ask her.

And then, when she gets crazy on you, as she surely will, go start your own. The cost that you'd have to pay is far more expensive than the value of the labor you'd have to perform to destroy her. And it's so much more rewarding doing it on your own! And it wouldn't take much time at all.
posted by RJ Reynolds at 8:55 AM on September 9, 2013 [1 favorite]

Nthing that $500 is too low and I'd be floored if anyone who spent the time and money to get a website rolling enough to have 8,000 Twitter followers would accept that unless they were planning to shut down the website anyway. And even then $500 is almost insulting as an offer; better to offer to take it over for free if you're not willing to spend a couple thousand. But if you have an antagonistic relationship with her then it's likely your offer will just make her dig her heels in anyway. Which is why you suggested anonymity, but that will result in three times the amount of drama the moment she finds out.

Just make your own.
posted by vegartanipla at 9:26 AM on September 9, 2013

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