SitePoint Market Watch

Introduction

Greetings and welcome to Issue 14 of the SitePoint Market Watch.

In this edition, I'm going to address one of the most overlooked questions by web site buyers: do you have the necessary time and skills to handle the upkeep of the web property you're buying?

It's an important one to ask, so it's vital you have an accurate picture of the site's technological aspects. That way you'll be able to evaluate whether the effort required to maintain the site is justified.

Read on for more ...

Peter T. Davis
Editor
SitePoint Market Watch

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Know Your (Tech) Product

When we're looking at a potential acquisition, the questions that first come to mind are: is it a good buy and is the financial information presented truthful? But I'd strongly advise that you also consider questions about the technical [KS: should this be technological?] side -- an aspect that's often neglected by many potential buyers.

I've made this mistake myself. When I'm out shopping for a new web site, I become enamored by one or more positive aspects of a site and it blinds me to the obvious: that it will be a pig to maintain. Web sites that are carelessly planned -- that are on custom written code or even just have a certain kind of user base -- can eat through your time, money, and resources like a herd of pigs at feeding time. Avoid being saddled with a beast.

One of the first web sites I ever bought was very attractive, because it had great content, received loads of traffic direct from search engines, and the topic revolved around a commercially available product. Perfect, or so I thought. When I obtained the site it was bringing in about 2,000 unique visits a day, primarily from search engines. It had about twenty or so original articles, flagship content as we call it in the industry, and a database behind it of collectible fantasy figurines. It was very well-suited to affiliate programs, which the previous owner for some reason had failed to implement. Before I took over the site, the only monetization was through Adsense (this is very common).

Now, a normal site receiving just 2,000 visits a day should have no problem being hosted in a shared environment. It's minimal traffic in the grand scheme. However, on this site, the coding was done in such a way that the database was hammered by far more queries per page view than you would expect. It was only when I started tinkering with the site that I realized I’d put myself in a quagmire. The site used up so much of the server's resources that I had to place it on it's own box (this was back when a Pentium 3 was bleeding edge for servers), and though the site was doing well with revenues, consistently over $1,000 a month, a third of that was right out the window just on the server. Throw in five or six hours a week Band-Aiding the code to keep the site live, and the investment started to seem like a ball-and-chain rather than a savvy purchase.

That's when I decided that it was smart to specialize. Since I've been dealing primarily with online community sites, and specifically forums run on vBulletin for the past few years, it's easier for me to evaluate what it takes to run a site. Although online communities take an inordinate amount of time to manage themselves, at least when you specialize you know what to expect and can accommodate it.  I also like purchasing sites that are run on well-known platforms, like WordPress. With the flexibility of content management systems like WordPress, there's very little reason for the small-to-medium type of web sites to be running on homespun code anymore.  By all means buy a custom-coded web site, but ensure you understand it fully before you make the purchase.

Market Wrap

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Feature Topic

After several years of buying and selling websites, I came to the conclusion that I needed some sort of sanity check in my portfolio of websites. 

Far too often I had purchased websites because I got a great deal, and I knew I could resell the site for more.  A lot of them I ended up keeping for various reasons, but what I ended up with was a helter-skelter portfolio.  I was all over the place, and there were far too few synergies among my portfolio.  I’ve been working on fixing it for well over a year.

For most people, who are going to buy one website and make that their sole focus, this won’t matter much.  However, if you’re considering buying that second site, third site, and so on, then I’m here to help you keep from making the same mistakes I did.  Focus! Focus! Focus!

Read and comment on building an online portfolio

Tips for Buyers and Sellers

Continuing our theme of being aware of the technological elements of your prospective site, here are a few pointers:

• Know what scripts the site runs, or if it's a custom code ask why it is instead of a standard script like WordPress.
• If the site was coded by a third party, contact that person and talk to them about it before you ink the deal.
• If the site runs an off-the-shelf script like vBulletin, establish what modifications were done to it and how that impacts your next upgrade.
• Know the hosting costs and server loads, and whether the current hosting company wants to upgrade the site to a more expensive plan, or even have it removed.
• If the site runs on a script, make sure the company supporting the script is solid; I've had development companies go south on me before, and it can be expensive.
• If the seller coded the site himself, have the contract state exactly what you expect him to support after the sale is done.
• Only become involved in a custom-coded web site if you can code it yourself, or if you’re prepared to hire a person to support it for you.

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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
Editor, SitePoint Market Watch

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