Some Advice On Selling Website

[websearch]

Some Advice On Selling My Website Please

Hi

I have been developing a website since 2005, and it is an incredibly busy genuine tier 2 search engine.

However it is now far too big for me to handle, and I am looking at selling it on to a knowledgable group or company.

The trouble is, I have never sold a site online and not sure where to start, which seems odd due to the size of the website (I just never looked into it).

I am not posting site details here due to spamming/privacy matters, but to interested parties I will divulge some information privately if requested. However I can provide some info:

Some statistics of the site (taken from June 2007):

June Hits - 37,800,000
Searches - approx 6,000,000
Click throughs - approx 450,000

Search Partners - Direct top tier (genuine) contact for more info
Revenue (Total Turnover in June 2007) - $600,000
Net Profit -circa $180,000
Traffic origins - mostly USA, Canada, UK, some Europe
Alexa as of today:

United Kingdom 2,516
United States 17,298
Canada 27,934
Australia 48,544
Italy 78,204

I genuinely wish to sell the site but it has to be to a group who can realize the HUGE potential of it, as you can see revenues are high already but can be so much more with excellent development.

The reason for sale is both that it is getting too big for me. Plus it needs developing to the very top level, and also I have my first baby coming soon and guessing I will need time off!

Any advice on where to start, and any valuation or even interested parties would be welcome. This is absolutely genuine and have proof - it is the basis of a Ltd company with full statements to prove income.

The sale will include the site, domain name, all content, branding, links, extensive contacts list, contracts, business in whole
Best Regards

 

[Edwin]

If you're making $180,000 in profit a month, why not just hire a few people (and one person to manage the others), kick back and relax while the site grows and gets bigger?

 

[websearch]

Thanks for the reply.

The thing is, I am the sort of guy who works well on his own, and would worry things would change too much if I hired others. I am not sure if you know what I mean - its been a 'baby' for nearly 2 years, and would prefer a clean break........and was wandering if a good payday would help me relax!

I spend all hours at the moment staring at the screen and communicating, and it is not good for your health to do on your own. (18+hr days EVERY day and dealing with big partners / cashflow is pretty stressful)

I would just like a break, my other half would like me to sell it (so we can be a full family again lol) and well, if it could pay the house off now it would bring the baby into really good surroundings.

I dont know - I guess there are more important things in life so as long as someone offers sensible money (to both parties), and I do get a good payoff, I would happily let someone take this to the top.

 

[rob]

Hi - just sent you a PM.

Cheers,
Rob.

 

[retired_member27]

My sums could be completely wrong but if the average worth of a domain is 48 x monthly revenue then your site would be worth at least $28,800,000 or am I missing something?

If it was my site (and those stats are amazing) I would definitely do what Edwin suggested and employ people to run it for you, your site would only increase in value.

As for the website itself, is your username a clue?

 

[jwm]

Given the amount of money this site is earning, your best bet is to employ a corporate finance company to consider your options - they will do this on a no sale, no fee basis.

Have a search on the web for ones that specialise in tech sales, alternatively pm me.

I work in finance and have a few mates that work in corp finance as well, none in tech unfortunately but corp finance is a small industry and they will probably know who you should speak to.

Don't sell this for a domain name multiple. Corp Finance guys could sell this for tens of millions which would set you (and the new baby!) up for life.

As an example Moneysupermarket.com makes profits of £33m and is being floated for £1bn, so you earnings multiple will be significantly more than 4X annual earnings esp as it sounds like there is upside for a buyer

 

[olebean]

My sums could be completely wrong but if the average worth of a domain is 48 x monthly revenue then your site would be worth at least $28,800,000 or am I missing something?

If it was my site (and those stats are amazing) I would definitely do what Edwin suggested and employ people to run it for you, your site would only increase in value.

As for the website itself, is your username a clue?

apd

If I was a buyer I would be looking at where the other $480,000 goes and take a look at the monthly revenue

 

[websearch]

The money goes into advertising and network traffic costs. As a site in a competitive marketplace, SEO takes and age and getting good quality traffic is not cheap, which is where a lot of the revenue goes.

However if I spend $1 and get $1.25 back, then I am happy

As for valuing it at $28m - its not worth that - can't be as if someone offered even 20% of that I would bite their hands off. Basically the site is still run from home, but really has got too big for me to handle. I am not a greedy guy, but I know its an opportunity to at least pay the house off and give my new family the security - which to me is more important than future earning possibilities.

I dont like dealing with corporations or anything, and this really is a massive opportunity for someone. To be honest all I am looking for is a 'golden handshake' for my work, then take time off - and maybe return in a new market in a year or two.

Am I mad or is this just something that people understand?
It's really a back bedroom site that worked, and because of that, there is no people to pay, investors to pay or anything so it could be a snip for someone.

And as for a clue - yes Websearch is a clue, but its not the name of the site. The name of the company is Websearch Ltd but dont look on companies house for accounts as it was only formed late last year as te site grew and still waiting for first year accounts (although I can prove revenues)

 

[paul]

Does the site have any original content or is it all just feeds?

 

[websearch]

Some original and does have its own blogging platform for end users to create it on site (although that needs to be marketed to attract bloggers)

There are original content with regards to pages, but newsfeeds etc come from newswire, feedzilla etc.

Basically it is like a normal large engine but with potential to create what you need.

It has a blog platform, games platform, email provider, marketplace directory and its own incredibly advanced PPC platform with advertisers, and a contextual advertising system amongst many others.

 

[Edwin]

30 seconds of Google turns up a possible Web Search Ltd candidate site, at F*-M*-N*.com. I assume that's not yours, is it? Speaking candidly, it looks far too "small time" to be evidencing anywhere that kind of traffic and revenue.

(if I'm wrong then A: I'm sorry and B: for goodness sake, do yourself a favour and throw a few grand at a good web designer - you could probably boost your revenue enormously by giving the look of the site a pro polish!!)

 

[websearch]

You got the site - and that is exactly it. The pro polish is needed - its all been done myself and I am not a pro designer.

It does however, generate the traffic. This mainly due to the network and where it comes from. Not all traffic is on site, its through the network. Although on site traffic is good and revenues are what is told.

This is the catch 22 for me. The revenue, contracts and potential is absolutely massive - and that is what is being sold.

The contracts, revenue model, site, contacts the lot. Basically the owner of the site will be controlling traffic generation for a large network, for which you will see the profits.

Hope this is getting clearer!

 

[Edwin]

So basically what you have is a traffic arbitrage machine turning over about a 20-25% margin, plus the ability to buy (and flip at a higher cost) HUGE volumes of traffic.

If that's the case, then I'd value the business at perhaps 3x to 6x monthly profit at best. After all, switch off the ad spend of $420,000 (a VAST sum, frankly) and as far as I can see there's basically nothing left i.e. the site's almost not even self-sustaining without paid traffic. If your traffic providers decide to ramp up their prices, or the "traffic in / traffic out" pricing equilibrium gets disrupted in any other way, that's game over.

The problem is, very few people (relatively speaking) have the ability to pump $420,000 a month into advertising. But I'm sure a lot of those that do have the further ability to bring a greater than 20% return into the picture.

Sorry if this isn't a very rosy assessment - others may differ.

 

[retired_member16]

Am I missing something? It appears to be a random mis-match of news feeds and poorly placed and irrelevent adverts.

I cant see anything that would make me want a return visit so I fail to see at this time how the figures stack up.

 

[olebean]

So basically what you have is a traffic arbitrage machine turning over about a 20-25% margin, plus the ability to buy (and flip at a higher cost) HUGE volumes of traffic.

If that's the case, then I'd value the business at perhaps 3x to 6x monthly profit at best. After all, switch off the ad spend of $420,000 (a VAST sum, frankly) and as far as I can see there's basically nothing left i.e. the site's almost not even self-sustaining without paid traffic. If your traffic providers decide to ramp up their prices, or the "traffic in / traffic out" pricing equilibrium gets disrupted in any other way, that's game over.

The problem is, very few people (relatively speaking) have the ability to pump $420,000 a month into advertising. But I'm sure a lot of those that do have the further ability to bring a greater than 20% return into the picture.

Sorry if this isn't a very rosy assessment - others may differ.

That would depend on whether you pay upfront fees. The abillity to "hold out" on payment or structuring the business in a certain way pay back could be a lot shorter!!

 

[rsteven]

whats the name of the site?

<EDIT> dont worry I found it....

 

[websearch]

That's right - the money is not paid on advertising until after it is recieved, so cashflow is not a problem.

Basically the easy way to look at it:

It is exactly the same model as the domain market - you have providers and on site advertisers, you get a network of excellent partners, are harsh on traffic quality and thus the feeds just get better.

You pay a cut to traffic partners (rev share) and keep the rest. This is where the high ad costs goes, but it is only to pay for additional revenues.

The purchase would be the business, not just the website. Basically the site has the top feeds, and excellent partners ensuring it is in a good position.

This is what is being purchased.

Yes the design is not great (I did it myself and am a coder, not designer), and it literally grew by accident after becoming my learning ground for the internet.

So is it worth anything and how do I go about selling, not necessarily the site as is, but the network, traffic and brand itself?

This is why I am confused - maybe best to keep it and run it as is, or pass on to a real development company for expansion and to realize the potential it has. A lot of work has been done, both online and strategically, and whilst I admit it is not the best looking site, for a guy that knew nothing of the net 3 years ago it's not bad!!

So looking for friendly advice.

Thanks