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Two Interesting Sites Popped Up This Weekend
By Max | April 9, 2007
I am going to take a look at two possibilities that scrolled across Sitepoint this weekend.
#1. Movie-vault
The first thing you should know is that Movie-vault has been up for sale before. The site didn’t sell then because the asking price was way too high. I even inquired about purchasing it, but quickly realized the seller didn’t really want to sell, since he seemed pretty firm about his asking price. It is a nice site, but not $50k nice.
Jeremy Schoemaker even commented on the sale here. I guess he didn’t like it enough to actually purchase it.
Elsewhere on the internet, the actual person who was close to a purchase posted his reasons for not going through with the sale.
The original seller has started to come around and realize that movie-vault just isn’t worth $40,000. Unfortunately, he has only dropped the asking price by $5k. Its actually pretty ridiculous. I paid far less for my other sites and they are both earning more, and have substantially more traffic than movie-vault. No one will start the bidding at $35,000.
The problem as I see it is this. The seller has fallen in love with this site. I believe it was his first website, that he personally created. I am sure that he has spent countless hours updating and maintaining this site. Because of this emotional attachment, I don’t think he can really see it for what it is, a decent movie fan site with little traffic and poor search engine rankings.
He claims a lot of things about the site’s potential. The problem with this line of reasoning is that if the potential was easily realized, then he himself would have already done the work. Don’t be fooled by these claims. A site with unrealized potential should sell at a discount approximately equal to the amount of work required to bring it up to its full potential.
The site has earned just $800 to date. It earned around $7000 last year. I think this site is probably worth about $7000. A lot of the income from last year is based on some private ad sales. I always discount those in terms of valuation because it takes real work to generate private ad sales. It is far easier to deal with large ad networks instead.
#2 travour.com
Here is another site that at first glimpse looks promising. Travour.com is a travel portal. I haven’t used it myself, but it appears to be getting a good amount of traffic.
The first thing that jumps out at me is that no one has even made the minimum bid on this site. Is there a reason for this? The sellers claim that the site made $10,000 last month on adsense alone. I would think there would be someone out there willing to take a stab at the $25k minimum bid. What do they know that we don’t?
Always read through the comments on these sales listings. A lot of times other potential buyers have gone through the trouble to find all the gotchas so we don’t have to. There seems to be no shortage of suspicious activity on this site too.
#1. The content is not original. One comment points out that this site contains some of the same content that exists on another site the seller owns. Original content would be better.
#2. Many of the links are from a site called mapsofworld.com. The seller claims these links will stick around, but it from the comment it appears the links are sponsored and could the reason for so much google traffic. It would be nice to know how much is spent on advertising like this to achieve the current traffic.
#3. The sellers business website shows that they are selling a number of travel related websites. They obviously have some system which can churn these babies out. I imagine their model involves using a content service to generate the content, and then buying (or otherwise aggresively building) enough links to gain google rankings. Then they sell the site for a big markup. What this means to a potential buyer is that they can expect to see sites like this pop up and compete for the same traffic in the future. Even though the seller mentions that he would sign a 3 year non-compete, I don’t really know what that means because they are already trying to sell other travel related sites right now.
The sale just has too many holes in it for me. I consider this site to be a risky purchase. What things have we missed that would cast further doubt on this sale. I am sure there is still some more digging that needs to be done, but there is enough right here for me to stay away.
From the above two example, you can see how risky this website business can be. Movie-vault’s sales listing is pretty good, and seems up front and honest, but the asking price is far and away too high.
The second site, while it may not be an outright scam, leaves a lot to be desired. Tread cautiously my friends. A lot of sites go up for sale each week, but very few are worth buying.
Topics: Website Valuation |
April 11th, 2007 at 1:59 pm
Someone made a minimum bid on Movie-vault. Its too bad he bid privately because I would like to contact him about some sites I have for sale at 5x annual revenues.
June 6th, 2007 at 3:02 pm
Nice article, I may have to ask you to review my website and tell me how much it is worth. Is that ok?
December 17th, 2007 at 3:15 am
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