website acquisitions

[prowler]

Hi

I am looking for some help, to put you in the picture briefly I used to run a ecommerce website selling a range of products, I started the website around 2003 and managed to double the turnover year on year for 3 years and make a small profit in year 4 as part of my business plan, unfortuantatly I had a nasty car crash and had to give the business up. I am now pursuing the other party in the car crash for compensation. As the business was not highly profitable because it was in it early stages it is difficult for me to demonstrate the value on an accounting basis, this is despite me being approached by a competitor the year before the crash and getting independent valuations.

I am hoping to bolster my case by providing example of .com ventures that were not actually making a lot of money but were sold for reasonable amounts, I think at the extreme end of the scale Youtube is an example!

Do any of you guys have any good examples that would help me?

Many thanks

[NuBlue]

do you have a URL for the website?

[prowler]

My site is no longer live due to the crash, what I am after is examples of other websites that may not have actually been making a profit but were sold for reasonable amounts. As mentioned I think Youtube is one example!

Any others?

[GetMusical]

It might be worth having a look into the Microsoft/Facebook share purchase.

I dont think Facebook was profitable at the time of the purchase but I could be wrong. Most people say that Microsoft's valuation of FB was well over the top though.

Good luck.

[wevet]

I would suggest that you consider what the likely scaleability of the business was and is. If you pm me I have had some experience in the disposal of some businesses would be happy to talk it through. Tjhough I would suggest, in advance, that unless it is innovative it is unlikely tohave any signifcant value beyond its development cost.

[dynamic08]

If you were not making money I would forget it!

Unless you had tons of traffic.

From what you have said though I doubt you did.

[ken_uk]

What was the traffic like?

What strength did the brand have?

What were the development costs of the site?

What was the expected growth, based on previous growth?


Big sales usually come from having either a really good brand, sticky site, repeat visitors, unique idea, market share, profits, growth potential, traffic, etc.

A run of the mill ecommerce site, without a really well known brand name behind it, with low traffic, low profits etc on the other hand would not get much in reality, unless its very lucky.

[prowler]

Some rough info for you, I do not want to give too much away...

From the first year onwards I doubled my turnover each year as per my business plan, the year prior to my crash my online sales were 220K
My operations costs were very low as ran the business from home, no rent, business rates etc. My main overhead was marketing and a bit of development costs. The site got over 60K uniques per month and was a very good domain name for the industry, I was among the first to set-up in the particular field I operated in. My site had number 1 search engine positions for most of the products we sold, beating our rivals and the manufactuers of the items we sold.

Due to the traffic and brand I was looking at providing a variety of other offerings on my site before I had to pack it up which I think looking back now would have worked well so I think the scalability was great and there was loads of potential to do a lot more!