Interviews with Digital Media Thought Leaders
How to Sell Your Website
Podcast Audio | Posted by Phil Leigh on August 4, 2008
If you would like to learn how an investment banker determines the value of a website, this interview is for you.
Our guest today is Mike Lyon who is a Vice President with Arbor Advisors which is a middle market investment banking firm in Palo Alto.
Recently an article in The New York Times discussed how a number of entrepreneurs have been buying websites and “fixing them up” so that they can be promptly resold at a higher price. The investors are cyberspace versions of those ambitious handymen on late night television who encourage us to buy run-down homes and promptly resell them after making inexpensive cosmetic repairs.
In one example a cyber investor purchased bird-cage.com three years ago for $2,000 and sold two-and-a-half years later for $175,000. Often those searching for undervalued properties will troll the Internet. Once they buy and improve attractive targets they’ll try to sell them at places like eBay or SitePoint.
However, sometimes it’s best to engage an investment banker, especially if the site owner thinks the value is North of $10 million. Accordingly, I contacted Mike Lyon of Arbor Advisors since his firm specializes in middle market transactions and presently has a number of assignments to sell websites. Mike feels that the three most important characteristics that determine how much he can get a buyer to pay are:
1. Traffic – it should be growing.
2. Engagement – the amount of time visitors spend at the website.
3. Content – there is no substitute for quality.
Phil’s Take: During the past 40 years an entire generation of ambitious workers skilled in carpentry, plumbing, and other handyman crafts were able to sometimes make a lot of money buying dilapidated homes and selling them promptly after fixing them up. However, today’s contracting credit markets may be closing the door on such opportunities.
In contrast, the new opportunities are going to be in cyberspace, but the skills required will be different. Improving an underperforming website requires the cyber equivalent of handyman skills to construct websites that are optimized for search engines and encourage visitors to stick around and buy merchandise or services.
Categories: Podcast Audio
Tags: Arbor Advisors, digital media, Internet video, Investment Banking, Selling Websites, Vauling Websites, Website Values
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