Website Domain Internet Businesses
For Sale
Web based, Internet companies, URL's, and Domain Names generally fall into four categories.
With the simplicity and complexity of the ever changing Internet (World Wide Web) a company can be in any business, almost anywhere in the world, and at any time all the time. For some of this, it has been difficult to grasp! Things happen almost overnight.
We keep reading about Internet companies selling for mega dollar amounts that have yet to turn a profit. These are the exception to the rule. Many were not started to make a profit. Many were started for an IPO or roll up.
Media & Content Companies are divided into two groups. Media Companies provide access to the Internet or organize on-line information for users. Content Companies provide specialized information for the customers.
Each of these types of companies receive their revenues from advertising and marketing deals with companies that are selling products through the Internet. Revenues come from a percentage or orders placed by consumers through the Internet.
Most of their costs are fixed and don't change, whether they have 100 customers to 100 million customers. Each additional customer flows directly to the bottom line. Some familiar top companies include America Online, Inc.; Marketwatch.com, Inc.; and Yahoo! Inc.
E-Commerce Companies are "on-line retailers" that sell their goods and services through the Internet. Convenience is the major attraction. People's lives are getting busier. In bad weather or at the end of a long work day they can order what they want over the Internet. Some people want to order when they want and not when a store is open. Some of these companies can charge lower rates than stores as they operate with much lower overhead costs and pass on some of the savings to the consumer.
Some familiar names are Amazon.com, Inc.; eBay Inc.; Xoom.com, Inc.; and Seawear that sells nautical & Irish jewelry at discount.
There are "two tiered companies" that sells a service report on search engine optimization. If you are managing your own website you may want to learn about Web Position Gold, (click here) that optimizes your pages for you so that they are found by search engines and surfers. Another great one is search engine help (click here) which is a book, Unfair Advantage and newsletter about the changing algorithms of the search engines. Anyone seriously in business on the Internet, employs these tools or employs someone else that does. One of the above companies had sales increases of 2300% for the first eleven months of 1999! In contrast AOL was (only) 800%.
Infrastructure Companies are hardware and software companies that help route and manage the electronic traffic on the Internet. These companies are essential to the Internet's current operations and future growth.
Some familiar names would be Exodus Communications, Inc.; and Inktomi Corp.
Communications Companies are local and long distance telephone companies that are building the fiber-optic networks that provide the underpinnings for the expansion of the Internet. The networks of tomorrow will be based on digital data communications rather than on voice.
Some more familiar names would be Global Crossings Ltd.; and RCN Corporation.
What should you pay?
What should you sell for?
Those answers are changing as quickly as the Internet. With an estimated 50,000 new people logging on for the first time each day there is a a constant supply of fresh energy and ideas.
The URL, Domain Name or website is worth whatever a buyer is willing to pay. For domains, the shorter the name, the easier to remember, the higher the price has been the rule of thumb. With the new 67 character name capability, the trend has been towards key search phrases and full company names. California Small Businesses is much more likely to typed in a search category than CSB.com would be.
Who will maintain the web site, web presence, search engine optimization and placement? Who owns the content? How will you establish and define a unique visitor? What are page views vs. visitors? How long do visitors spend at your site? How deep do they travel? Where do they come from? How much faith do you have in the company you are selling? Will it succeed without you at the controls? Then, how much are you willing to finance.
There are many factors to consider. Can a you walk right in and take your it over? Do you have the expertise to duplicate what the present owner has done? Do you have the time? Can you make it more efficient or profitable? Is the Domain Name a common word that people will search for and bring traffic to your site? Well then, it might be worth a lot to you.
I recently sold one service company that had consumers calling and faxing in their information from all over the country. The buyer was pretty computer savvy and totally automated everything with auto-responders, password forms and automatic emails. Expenses went down, sales went up and profits increased dramatically. He looked beyond what the owners were doing bottom line, as he knew what they were doing wrong and what he could do to fix it.
I hate to admit that one domain I had considered registering early in 1999 was recently sold for $262,460 without being developed. What a great return on a $70 investment! PointCast turned down $450 million in 1997. Only to sell for $7-10 million in 1999. Many times a buyer will see something you as the seller may not. It may not even be there! It may be the best time to sell...
The door is just opening! I am interested in your comments too. If you have an Internet related business to sell, let's talk.
If you are thinking of buying an internet based business, you need to know where the value lies. If you want to buy strictly based on profit and loss, return on investment and growth projections such as with a storefront business, you may look a long time. There are two aspects of generating income from a web based business. Direct sales either through drop shipping, affiliate sales or direct fulfillment. Obviously if you can buy the product for a dollar and sell and ship it for $3 you are making a great $2 profit. But what if you can drop ship if for the same $3 and only make $.90 to $1.20 profit. Which has the greater return on investment? How many widgets do you have to buy and carry as inventory to purchase wholesale at $1? And finally what if you only made $.15 to $.30 for each sale as an affiliate, but you did absolutely nothing? You didn't talk to the customer, you didn't process the order, you didn't have to take a check or credit card and worry about fraud. In fact, you may be on the beaches of Florida while your Michigan website is making money for you!
Now which one has the better return on investment of time and money?
At the bottom of this page is a link and banner ad for Pay Pal. This company is new and for each person I send that joins, I am paid a $5 affiliate bonus. Each person that joins gets $5. For each person they refer, they receive $5. And so on. It is a single tier affiliate. The company could have spent millions to advertise it, but with this system, it spread like wildfire. Some people actually made thousands in the first few months. Oh yeah, it's also FREE. You can send a payment to a third party via email. It swept the auction sites, made every seller have the ability to accept a credit card on eBay and I was turned on to it by one of you. It cost me nothing and a customer was able to email me cash for a valuation program! Everyone won! Obviously, this company is building traffic and a loyal customer base. At $5 each, it is cheap! When was the last time you received a loyal customer for $5 for your business? This is an example of an 'affiliate'.
The most difficult part of a web based business is not in making sales, it is in obtaining qualified, targeted traffic. Anyone can get traffic or 'hits' but it takes skill to get traffic that is searching for what you are selling. Think about it, 10,000 people a day clicking onto a site that they are not looking for on the off chance that some may have an interest in what you are selling, or 1,000 people a day looking for your product or service?
Now, taking those 1,000 people a day and offering them what they want at a value they are willing to pay is taking it to the next level.
A website usually falls into several specialty categories. The first is the main look which will be designed by more of an advertising perspective. Most companies get caught up in a high tech look that screams ego! This is great if that is what you are after. The tradeoff is speed and how bad it actually looks when surfers have things "turned off" in their browser. For an example go to your browser and turn off all Java and multimedia. Now, go to your favorite 'cool site' and see what many surfers actually see! This is what people see that are in areas that pay per minute usage to surf, have a slow modem, on the road laptop, access via cell phone or very busy cable hook ups. It gets even worse when you plan on screen resolutions!
After you corporate site is written, you need someone to submit it to the search engines so they can find you. As of April 2000, it is estimated that roughly one third of all the web is actually indexed by the search engines! AND 30,000 new sites go on line daily! A good submission company will charge you several thousand dollars to many many thousands of dollars depending on how much you do. To do it write, several hours a day needs to be spent analyzing daily log files, where the traffic is coming from, leaving from, time zones, etc.
The next phase tends to be the optimization phase. This is the person who knows what the search engines are looking for and how say what you need to say in 'search engine speak'. This is the most important part of a good site and again, you get what you pay for. To stay in the top 10-20 positions of the search engine results, requires constant monitoring of the search engine algorithms. What works today may be tomorrows downfall. Some engines send out spiders from different addresses to catch you off guard!
When you know the cost of having the above done, you will understand more where the value of quality traffic lies. It can easily take 10-14 months today to be indexed by the search engines. On my own sites it took 8-10 months to be picked up. With the new ones I am doing, even longer now. Sure you can advertise for immediate traffic, but the moment you stop, so does your traffic. Remember the super bowl dotcom ads? Who does?! The beauty of a well done site is qualified traffic 24/7! You get what you pay for...
The last thing you should understand is 'hits' which everyone throws around without explaining. When you log onto this page your ISP says "Hey show me this page!" and my web hosting company says "Cool! Show me what you got!"
Your ISP says "hey dude I'm java enabled, my cookies are off, but full blown multimedia is set and I can take macromedia presentation too!" My host comes back with "awesome man, what about screen resolution, what browser and version are you using, what is your default font and what can you display and do you want tables, frames or no frames?"
Well, each of those questions and answers may constitute a hit for information on my hosting company... each image will be a hit (3 on this page) as they are coming from a different file and need to be looked up and retreived and each link may be a hit as they have to be verified before they can be loaded complete or broken onto your screen. This page has 26 links. So for you to load this page, my host could actually be 'hit' with over 30 requests! All I monitor is fully loaded page views per visitor. But, some of you get turned off by the header and leave or even turn off your page counters and I will not get a count of your visits. Sneaky. Some counters you see on pages you can hit refresh and watch it go up. Some that want to look important hit on their page over and over or tape the mouse button down and go have lunch! Who cares! What you care about is complete page views (fully loaded pages equal advertising dollars) and unique visitors (they have never ever been to the site before and the search engines think you are important and sent them) and return visitors (they think your site has value, come back and refer others).
Think about this - only 16% of all the web pages submitted for registration to the Internet search engines are actually registered or indexed' and 95% of the business web sites that are indexed by the search engines are listed outside of the top two pages of searches returned against keywords that describe the products or services offered by the particular business. Only 5% of the websites that get indexed (that's 5% of the 16% that made it) are found in the first two pagees of results. One thousand sites get submitted and 160 get accepted and indexed. Now searching for something that those 160 sites do, and 8 will be found. That is 8 out of 1000...
some content from Ryan Jacob Bottom Line/Personal
Bizology - the study of business for sale
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