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The SitePoint Market Watch #12                 Copyright (c) 2009
March-31 2009                                      PLEASE FORWARD
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News, Rants and Case Studies for Web Entrepreneurs
by Peter T Davis

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Introduction

One of the challenges for a person contemplating selling their
web site is to know what appeals to a prospective buyer.

That's why I recently stole a half-hour out of Jeremy Wright's
busy day to gain some insight from him. Jeremy is the CEO of
b5media [1], one of the largest blogging networks and well-known
in the SitePoint Marketplace. He also has a personal blog at
Ensight.org [2] and is a long-term member of the SitePoint
community. Read on for my interview with Jeremy.

I've also compiled a new batch of tips that you'll hopefully
find helpful when navigating the Marketplace's pages. Enjoy the
reading.

Peter T. Davis
Editor
SitePoint Market Watch



[1] <http://www.b5media.com/>
[2] <http://www.ensight.org/>


IN THIS ISSUE - - - - - - - - - - - - - - - - - - - - - - - - - -

 - Introduction
 - Interview with Jeremy Wright
 - Tips for Buyers and Sellers
 - Featured Listings


INTERVIEW WITH JEREMY WRIGHT  - - - - - - - - - - - - - - - - - -

As mentioned in my intro, Jeremy Wright has been involved in the
SitePoint Marketplace for a long time. Although he's a buyer of
higher-end sites, his tips are applicable to any web site in the
Marketplace. Read on for Jeremy's perspective on buying web
sites.

PD: You're one of the few people who's been buying and selling
sites on SitePoint as long as I have; what's your take on how
the Marketplace has developed over the years and where do you
see it going? 

JW: That's a great question. I think the Marketplace has clearly
evolved from the early days of everything goes. That was fine
until it was flooded with turnkey sites and the like, and so
they were split off. Later it was flooded with people misleading
others, so the process was made slightly more stringent. And I
know there are plans afoot to make it even more professional.
However, I'm struggling to pinpoint ways in which it's better
than it was five or more years ago ...

Do you look at the Marketplace primarily as a buyer these days? 

Yeah, largely. b5media, the company I have the honor of helping
run, is primarily a buyer rather than a seller. However, in the
past I've been buyer, broker, and seller for some of the largest
sales on the Marketplace.

b5media is known mostly as a blog network, so you'd be mostly
looking at blogs to buy? 

Yes and no. Fundamentally we're a media company. And while more
than 90% of the content we produce is blog-based, we're always
open to properties that are going to add fundamental value.
Whether that's traffic, revenue, features, or community.

Well, what type of web site, or should I say, what attributes of
a web site would gain your attention? 

That's a great question. The kind of site that'll always grab
our attention is one that has at least three of the following
attributes:

 - significant traffic -- that is, more than 1 million page
views per month on a recognized statistics package (for example:
Omniture, Google Analytics)

 - significant revenue (more than $5,000 per month)

 - minimal integration problems post-transaction

 - different content to what we already run (unless it's a
market leader)

 - scope for improvement (seo, server infrastructure, ads,
design -- anything we can optimize)

What was your last big buy from the Marketplace? 

Probably our last BIG one was a video community site in the
celeb space. It hit all criteria. The problem was that the
previous owners had spent months inflating its traffic (via paid
traffic) and failed to disclose it. Google Analytics was unable
to show the issue, so the traffic was fake, the profit was fake
and we learned some hard lessons. We still made our money by
using the features elsewhere, but yeah -- lessons learned.

Has the economic conditions caused that change in your buying
pattern? 

Until this year, we typically bought 1-2 sites a month. Since
the economy tanked, we've been waiting for it to bottom out so
that we time purchases to their most cash-efficient point.

Our change in buying patterns has made it difficult for us to do
open-market purchases. These days we do cash-light transactions
with earnouts, bonuses, revenue guarantees, and so on; that way
the seller makes more money than he would holding onto the
property, but we're a bit more protected. Sometimes we'll do
shares or options as well. This new style of buying, for us,
makes using the open marketplace challenging; we either need to
list just the cash component, or be seen to be inflating the
cash component by stating the total deal value.

One last question and I'll let you go: How do you effectively
sift through Marketplace listings without wasting your time
looking at dead-ends? 

Does an effective way exist? It'd be great to have an advanced
search function, so we could look for our types of sites, but
the reality is that we often find sites outside our sweet spot.
Right now the bigger challenge is seller expectations.

Thanks very much for your time. Is there anything else you'd
like to add? 

Just a huge thanks to the crew at SitePoint, the Marketplace
buyers and sellers, and all the Forum members who've helped me
on my journey of growth. I wouldn't be where I am -- nor would
b5media be where we are -- without you all. So a huge, huge
thank-you to everyone :)


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TIPS FOR BUYERS AND SELLERS

 - Put your best foot forward

 - Use a recognized statistics service to verify your traffic.
(Recommended: Google Analytics)

 - Work on building traffic as your first priority -- it's the
foundation of value for your web site.

 - When selling, let the buyer be the judge of what needs
improving on your site, and avoid too much focus on it yourself.

 - Make your site easy to manage for the buyer with standardized
platforms and/or well-documented code.

 - Give your site a unique voice. Good content sites are
remarkable for the statement they make about a topic.

 - Build sustainable revenue -- obviously.


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That's all for this issue -- thanks for reading! I'll see you in
a few weeks.

Peter T. Davis 
peter.davis@sitepoint.com [1]
Editor, SitePoint Market Watch





[1] <mailto:peter.davis@sitepoint.com>


FEATURED LISTINGS - - - - - - - - - - - - - - - - - - - - - - - -

Women's Network and Grant site for sale
<http://marketplace.sitepoint.com/auctions/61557>

LinkBuildersPRO.com
<http://marketplace.sitepoint.com/auctions/61995>

Prismotube.com - Youtube API PHP Video Script - COMPLETE BUSINESS
FOR SALE (Website + Script + Customers)
<http://marketplace.sitepoint.com/auctions/62141>

Software Company - 5+ yrs -  $10,000+/mo Profit
<http://marketplace.sitepoint.com/auctions/62156>



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