April 15, 2008 |
Lately I’ve been thinking about how often I come across the same reasons for a lack of historical data. The first is that the site changed servers, the next is that the website was under a different owner, and today I came across someone who moved a forum out from one domain, put it on it’s own domain and then put it up for sale.
I can’t for the life of me think of why someone would do this. Most of us know the complications with ranking and SERPS when you change the location of a website. You are just asking for headaches. There may be absolutely nothing deceptive going on with this sale, just a poor decision. The forum in question has a couple thousand threads, a few thousand posts, and just over a hundred members. Not huge by forum standards but a good little audience to sell something to.
The website seller wants to get rid of it because of the maintenance involved with a forum, so he broke it away from the primary domain like a corporation would spin off a business unit into its own company. Problem is, search engines now look at it as a new website. The site had a PR3 main and PR2 on sub pages and guess what it has now? PR-ZERO.
Unfortunately, I am always a little skeptical of websites that have recently gone through a major change. Server changes are common and they don’t cause the same issues as the domain change problem like the website for sale mentioned above, but why? The usual reason, if one is given, is they changed to a different host. If they say the website changed ownership (which usually entails a server change), you’ve got to wonder why they are reselling it again. They will say they couldn’t handle it or underestimated what they were getting into but who knows what the truth is?
The bottom line is that a long history of quality traffic and revenue data is the best defense against a pump and dump website sale. The number one reason for an owner not having much history, besides the site being new (and somehow having a ton of organic traffic already - but thats for another post) is that the server changed. It’s always good to ask a few questions about the change. The last one I was curious about said the last host was unreliable and quoted some downtime stats and something else I forget…I followed up by asking who the host was and never heard back from the website seller.
Another Note on Buying Website Forums…
An important thing to understand for everyone looking to buy a website forum is that good posters are cheap to hire. It’s usually a good idea when you start a forum to hire some posters to get it up on it’s feet. I do this and pay about $100 for 400 posts and many members (the paid posters create multiple accounts). The service I use creates excellent posts so that the visitors to the site would have no clue they were not unsolicited interested parties in the website’s topic.
In any case, keep this in mind when you are considering a forum that has many members/posts, but maybe hasn’t been around all that long or doesn’t have much non-member traffic. Most forums have more ‘guests’ or browsers/lurkers than registered members. If the traffic looks like it could be equivalent to only those posting, be weary. The bottom line is you don’t want to assign any value to a forum’s post or membership number if there is a potential they are paid and will disappear once you take ownership of the site.
Hope this helps someone. Take care for now.
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Table of Contents |
INTRODUCTION |
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What Will You Learn From This Website
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What this Website is Not
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| PART I – ONLINE ADVERTISING ARBITRAGE: PLAYING BOTH SIDES OF THE ONLINE MARKETING MARKET TO MAXIMIZE PROFIT & WEBSITE VALUE |
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Basic Market Components
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Supply
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Demand
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Price, Bids, Asks
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Elasticity
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Pricing
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Demand
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Supply
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| Real Arbitrage Example |
| Online Advertising and Arbitrage - The "Click Thru Value Chain" and Commoditizing the Market |
| Development, Traffic, and Hedging Your Cash Flow |
| Part 2 of Development, Traffic, and Hedging Your Cash Flow |
PART II: Valuing a Website: What is Your Site Worth? |
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The Headaches Pricing Websites
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Historical Growth: Geometric Mean vs. Average
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Terminal Value
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Summary of Discounted Cash flow Analysis for Website Valuation
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Market Value Approach to Website Valuation
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A Note on Using Metric Multiple Website Valuation Models
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