You’ll find that on some occasions the information will be exactly as the seller details. However, knowing you’ve personally verified the information yourself puts you in a strong position to make an offer on a web site with confidence.

On most occasions when you’re considering the acquisition of a web property — whether it’s an entire web site or just a domain — it might be useful to know some details of its history. The two main reasons for needing to know what’s gone on in the past are to confirm what the seller is saying and to know about any unscrupulous dealings.

It would be great to be able to take it for granted that all the participants in SitePoint’s Marketplace are honest, that every web site seller is representing the property very clearly, and all relevant information is transparent. But, in reality, it’s dangerous to assume all this. Even with an honest seller, there might be factors that have been long forgotten, were more important to you than the seller, or have simply been overlooked while hastily writing up an auction listing description. I have even run into situations where a second or third owner of a site was unaware of problematic events that transpired prior to them owning the property.

Trust, but Verify

So, how can you find out what even the owner may be oblivious to? Or, what the owner may be hiding from you? Sometimes you’re unable to, but with some useful tools you can learn quite a bit about where a property has been.

The Internet Archive (archive.org), also known as The Wayback Machine, gives you an easily accessible overview of the long-range history of a web site. What’s truly great about the Internet Archive is that it keeps in its database a copy of each web page it accessed at a specific point in time. If it’s new to you, take a look at what it has for SitePoint. As you can see, the first instance of SitePoint in the Archive is from May 10, 2000 (bonus points to you if you know what SitePoint was called before then!). For the true beauty of the Internet Archive, you click into those dated links. There’s what SitePoint looked like more than eight years ago — quaint, huh? And, to take it a step further, you can click around and see what the internal pages looked like too. Sometimes you’ll need to cut and paste the internal urls to access them via the Archive, and some webmasters block the Archive in their robots.txt file.

The Google Cache is similar to the Internet Archive, but it’s a bit more difficult to browse; also, some sites you’ll only find in the Archive, while others, only in the Google Cache. I use my Google Toolbar to access the Cache, and one of the first things I address when I’m examining a site is what’s in the Cache for the index page. If that matches what I see when I access the page directly, I then check the date it was cached; this gives you an indication of how important Google thinks the web site is — more recently cached being good. In addition to using the Google Toolbar, the Google Cache can be accessed by clicking the “Cached” link that appears below a search result. You can also have a look at the text-only version here too where occasionally there’ll be a red flag.

The third tool I’d like to introduce you to is Domain Tools, which finds historical information about the ownership of a domain. At the heart of its database is an archive called Whois. Every time a domain name has a change in details, it creates a new record in the database. While some changes are more mundane, such as telephone numbers, others can be more revealing. You might uncover the previous owner of a domain and be able to trace how the current owner came to be the owner. The ownership may be questionable if the domain changed hands under sketchy circumstances. Domain Tools also enables you to discover what other domains a person owns.

This is far from being an exhaustive list of important tools, but these are the three I use the most. Most of the time you’ll end up just confirming what you believed you’d find in the first place, but it’s important to validate information. You may also run into situations where these tools will turn up inconsistent data, if at all, and in those cases you’ll be wondering what the seller’s trying to hide. The more information you have on a prospective acquisition, the better position you’ll be in to make a sound offer. And, the last great point I’ll make about these tools is you can do this level of research before you’ve even stated an interest to the seller.

I originally wrote this for the SitePoint Market Watch Newsletter.

Tools for Website Buyers Due Diligence is a post from: Peter Davis

It’s a decision we all need to make when buying and selling web sites. Places like the SitePoint Marketplace are wonderful at bringing buyers and sellers together, but a nasty by-product is that they may also attract small numbers of criminals looking to profit from other people’s ignorance.

Luckily, services exist to help buyers and sellers protect themselves, and while not perfect, go a long way to keep the fraudsters at bay.

Whether you’re a buyer or a seller, it’s important that you’re aware of the options available to you.

You may have seen me on a number of occasions advising web site buyers to use an escrow service for the monetary part of the transaction. Your threshold for requiring escrow services should be at a financial level where it would be painful if the deal turned out to be a fraud. For me, it’s $1,000.

The two services that I’ll discuss because I’m most familiar with, are Escrow.com and Sedo.com. There are other services that are very good and are mentioned regularly in our forum, but these are the two I rely on for my transactions.

Escrow.com is the service I started with and have used more than any other. One of the things I like about Escrow is that it’s more automated than Sedo, and there’s less probability of a transaction stalling because of the service. Of course, that may make it easier to exploit, but I do believe it gives you a high level of security.

The first thing you need to know before setting up a transaction is who’s paying the fee. Escrow.com gives you three options: seller pays, buyer pays, or an even split. Discuss this with the other party before setting up the transaction. Whichever party initiates the transaction will be the one to instruct Escrow (it’s done by selecting the option in the transaction form). You’ll also need to know the email address of the other party, and if they already have an account, be sure to use the address associated with it — or you’ll have to start over.

When you’ve settled that, log in, and start a new transaction. Escrow.com gives you three options for the transaction type: motor vehicle, domain name, and general merchandise. I always select domain name for the obvious reasons, but all this guarantees is that the domain registration is updated with the buyer’s information.

Escrow.com also asks for an inspection period, which may be a short time as domain transfers are generally instant — as long as you’re transferring accounts in the same domain registration service.

Next, you need to enter the domain being transacted. If there are more than one, you just click the Add Domain Name button. And, in the same screen you enter the purchase price. In the final screen, you simply review your choices and agree to the terms.

With Sedo.com, unless the domain is already listed at Sedo, the process is less automated. And, it’s in your best interest usually not to list it in Sedo. Here’s why: the fee for a sale is 10% when the domain is listed in Sedo, otherwise it’s only 3%. This can mean hundreds or thousands of dollars with some of our higher-value transactions.

To start the transaction you need to have an account with your own username at Sedo, know the other party’s account username, and agree upon who’s paying for the fee. You’ll then need to email this information to transfers@sedo.us [3], as well as the domain name, both party’s names and emails, and the price.

Allow one business day for the transaction to be set up. Usually, if you contact them early during regular business hours, they may have the account set up by the end of that day. But if it’s late on Friday, you’ll probably have to wait until Monday morning. It’s a manual process.

The one advantage Sedo has over Escrow is that they’re directly involved in the domain transfer. That is, they’ll request the seller to transfer the domain to them, which they then pass on to the buyer. Escrow.com only verifies that the registration information has changed. This alone may be enough to cause you to switch from Escrow to Sedo.

Next, the service will instruct you how to submit the money. If it’s a significant amount, chances are you’ll bedoing a bank wire, which you’ll need to arrange directly with your bank. With some smaller transactions, you may be able to send the funds to the escrow service via PayPal. Generally, though, escrow is used for larger transactions, so it’s unlikely to be an issue.

If you’re the buyer, you usually have the last call on the transaction. Hopefully everything has gone well and you can signal to the escrow service that you’re satisfied, and they’ll release the funds to the seller. If there’s a hitch — whether you’re the buyer or seller — you should immediately contact the escrow service and have them intervene in the transaction.

I originally wrote this for the SitePoint Market Watch Newsletter.

Why I recommend you use an escrow service when buying or selling a website is a post from: Peter Davis

The gavel has fallen, you’re the highest bidder … so where do you go from here? As the heady flush of winning fades, finalizing your first deal can be a confusing process and one with plenty of stumbling blocks for the unwary. Even for the experienced buyer, there are often new twists and turns that we don’t discover until we’re all but ready to ink the deal. Here are a few tips and pointers to help you along your way.

First, you want to make sure that your due diligence is completed and accurate. Ideally, you should have accomplished this prior to having placed a bid, but in the excitement of the auction this isn’t always possible. Have you verified earnings and traffic stats? Will the seller agree to use an escrow service? Have you researched whether there are any intellectual property concerns with the content, products, or domain name associated with the site you’re buying? If you have not ascertained them already, these are points you’ll want to cover immediately.

Shortly after the auction ends, you should hear from the seller. He or she will likely ask about arrangements for the money to change hands. I am a big proponent of escrow services. For buying the small to medium web sites we deal with in SitePoint’s Marketplace, there are three services I recommend, Escrow.com, Sedo.com, and Moniker.com. I prefer them in the order in which I’ve listed them here, but you should check them all out and determine which suits you best. I’ve saved myself from a scammer by the mere mention of using escrow on more than one occasion in the past. Scammers hate escrow. It’s not foolproof, but it will at least ensure that you receive ownership of the domain name before the seller receives the cash.

The next part of the process will be taking possession of the domain. You can find out where the domain is registered by doing a quick whois search on the domain. I use DomainTools.com for my whois searches, but there are hundreds of other sites that provide this service. It’s easiest if you have an account at the same registrar where the domain is currently registered. Transferring ownership from one registrar to another is a slow process, and quirky enough for a high percentage of attempted transfers not to finish it off on the first try. Almost all registrars, however, make it very simple for customers to send a domain into another customer’s account. Once you have control of the domain, and it resides in your own account at the registrar, you can proceed to transfer it out to the registrar of your choice. The only caveat here is to make sure the registrar where the domain is currently held is a mainstream registrar.

Moving the site itself comes next. This stage can vary from a dead simple undertaking to a massive one. Some of the web sites I buy are accompanied by multi-gigabit databases. Those are never fun to move. And they’re especially not fun when you’re dealing with a membership that is unhappy about the web site changing hands in the first place. Sometimes it helps if you can arrange to have the seller help you with the move; they may let you host on their server for a temporary period while you become accustomed to the functioning of the site, or simply take over their server along with the web site.

While it’s impossible to anticipate every situation, taking the time before placing your bid to make a plan of what to do if you win the site will help you determine whether the deal is a good fit for you. Be sure to get your questions in up front, and quickly–while you’re asking questions, more experienced buyers are putting in their bids!

I originally wrote this for the SitePoint Market Watch Newsletter.

Need Help Buying a Website? is a post from: Peter Davis

After several years of buying and selling websites, I came to the conclusion that I needed some sort of sanity check in my portfolio of websites. Far too often I had purchased websites because I got a great deal, and I knew I could resell the site for more. A lot of them I ended up keeping for various reasons, but what I ended up with was a helter-skelter portfolio. I was all over the place, and there were far too few synergies among my portfolio. I’ve been working on fixing it for well over a year.

Five years ago, in 2003, it didn’t matter so much whether you had a focused portfolio. Especially so where organic search optimization was concerned. Interlinking your websites, however unrelated, worked. All you needed was some strong PageRank sites, and you could get pretty much anything off the ground if you planned it out well. It doesn’t work so well anymore.

For most people, who are going to buy one website and make that their sole focus, this won’t matter much. However, if you’re considering buying that second site, third site, and so on, then I’m here to help you keep from making the same mistakes I did. Focus! Focus! Focus!

There are two main ways that you can focus your portfolio. First, you can focus your portfolio by platform. For example, I enjoy working with forums. I know guys who do blogs, and that’s it. A nice portfolio of ecommerce websites could be gold. A portfolio made up of five page content sites built on flat html files could be very easy to manage, if not the most profitable type of sites out there.

Alternatively, you could focus yourself into a specific market niche. We’ll say for example, you’re nuts about slamball. You’re a slamball fanatic. So, your first site is a slamball forum. Your second is an ecommerce site selling slamballs and related products. Then, you’re doing a blog about slamball. Maybe you add a couple of “how-to” type sites with basic instructions and tips. Get the idea?

The benefits you’re going to be able to reap when you follow a well thought out plan are that you’re going to be able to outperform the competition. You’re going to be able to move more quickly than the competition when a site comes up for sale, because you know better what the site is worth and how to take it over and run it successfully. You may even find yourself taking sites before they even come up for public sale.

It does seriously limit the range of sites that you’re going to be buying to keep in your portfolio. For guys like me, who are addicted to the thrill of the deal, there are other outlets that will keep you active in the marketplace. You can always buy sites that are specifically intended to be flips. And, one thing I’ve personally been involved with is helping other people buy websites (what better than to be able to get the thrill of the deal without spending my own money).

In the end, I hope to have a well focused portfolio that make sense and has huge opportunities for synergies across the portfolio. If you’re starting new, do yourself a favor by plotting it out now before you end up with a mish-mash of unrelated sites.

I originally wrote this for the SitePoint Market Watch Newsletter.

Building Your Online Portfolio is a post from: Peter Davis

With traffic stats, I think the best measure is to have them add Google Analytics to the site, if it’s not already on, and have them grant you access (Analytics allows the owner to share the stats with anyone who has a Google account) and watch it for a few days (or just look at the historical stats if it’s been in place long enough).

Other ways to verify are not as satisfactory. You can look at Alexa rankings, and that might help. For example, there was one site for sale in Sitepoint’s marketplace recently in which the seller stated hundreds of thousands of unique visits per month, yet the Alexa ranking shows above 500,000. So, that seems a bit absurd. I don’t consider Alexa very accurate, but you can get a good rough idea that a site getting hundreds of thousands of unique visits probably should have a sub-100,000 Alexa ranking and if not something is smelling fishy with the sale.

In addition to factors such as checking a site’s PageRank and backlinks, this is something I look very closely at when buying a site. Because in my opinion the traffic is one of, if not the, most valuable assets of a website.

You might also be interested in finding out where to buy and sell websites.

How do you verify stats when buying a website? is a post from: Peter Davis

Give it a read!

I’d love to have any feedback, either here or there in the comments.

And, what should I write about next!

Site flipping article on Sitepoint is a post from: Peter Davis

You’ll often see PageRank listed as a key feature of a website.  Particularly, when the index page, or other pages on the site are showing a PageRank of six or higher in the toolbar.  This can influence how much people will pay for a website.  This is particularly so when a significant portion of a website’s revenue comes from selling text link ads.

How can we verify whether the PageRank is solid?  Well, in most cases, fake PageRank is easily discovered.  The first thing you want to do is go into Yahoo! Site Explorer and see where a site’s backlinks are.   Type in the site url, and click ‘Explore URL’ and have a look through the results.  Use the url for my blog as an example, http://www.petertdavis.net
The first thing you’ll see is what pages Site Explorer recognizes on the site.  Just verify that this is in line with your expectations for the site.  My blog shows just over 800 pages, and that’s pretty much what I’d expect.  Then, click the ‘Inlinks’ and see what that lists.  You’ll notice it gives a number, which is how many backlinks Site Explorer thinks the site has.  What that means is, any page on any website that contains a link to any page on the site you’re examining.

Is the number of Inlinks Site Explorer shows in the range you expected?  If you’re looking at a site being sold as a PageRank 7, and Site Explorer shows a dozen or less Inlinks, that should throw up a red flag.  This blog shows over ten thousand Inlinks, and that would be a strong indicator that the PageRank of this domain is solid.

In addition to looking at the raw number of Inlinks, next you’d browse through to see the diversity of the Inlinks.  Are they all coming from a small group of domains, or are there many different domains?  You want to make sure that the links are diversified, and not all coming from websites that the seller controls.  It’s a common trick that all of the PageRank is coming from the sellers own website, and if you have no guarantee that those links will remain in place, you can expect to see a drop in PageRank very soon.  I call this “Inbred PageRank.”
More serious than Inbred PageRank is hijacked PageRank.  This doesn’t happen so much anymore, but during 2005 and 2006, I saw dozens of examples of a supposed high-PageRank site being sold, but the PageRank was hijacked from another domain.  I won’t explain how it’s done, that’s easy enough to find out, but I’ll explain how to detect it.

What you need to do is start going to the sites listed in the Inlinks list, and verify that the link actually exists.  Under normal conditions, you will find pages in the Inlinks list that no longer have the link.  This is normal.  Expect it.  However, if you can’t find the link on any of the pages, that’s bad.

The more you’re investing in a site, the more of the Inlinks list you want to examine.  You can discover some interesting things.  Perhaps there is a single large source of PageRank, and all the others are minor.  You’ll know that your PageRank is heavily dependent on a single source.  That’s a risk you need to know about when you’re buying a site.  What you hope to find is a diversity of types of sites and strength of PageRank in the Inlinks.  You don’t want to find that only, or primarily the Inlinks are from directories.  You want to see links from content and resource pages as well.

This should give you a primer on what to look for when the site you’re buying includes an attractive PageRank.  Even when you’re buying a lower PageRank site, you may want to give a look at the Inlinks in Site Explorer.  It does give you an insight into what type of marketing the owner has done for the website.  Good luck!

Protecting yourself when buying a website – PageRank is a post from: Peter Davis

Website Buyer’s Time Saver is a post from: Peter Davis

Sitepoint’s Sell Your Site Marketplace

Digitalpoint’s Buy, Sell, Trade Sites Section

Namepros Developed Sites for Sale

Geek Village Website for Sale

DN Forum Developed Websites

Ebay Internet Businesses and Websites

Webmaster Talk Websites for Sale

Search Engine Forums I Want to Sell My Website

BizBuySell Internet Businesses (you need to do the search yourself)

Webhostingtalk Other Offers and Requests

These are just the places where I’ve had success hooking up with people to make a deal. There are other places, the list could go on forever, but these are the ones that I will regularly visit.

The best of all method is when people contact me directly. If you have a website for sale, I welcome you to pitch it to me, send it to my email address p-t-da-v-is-at-g-m-a–i-l.-c-o-m (remove the hyphens).

And, if you find a great buy as a result of this post, be sure to send me a commission! Good backlinks work as well as cash.

Where to buy a website is a post from: Peter Davis

I’ve been involved in Sitepoint’s marketplace for several years, as a moderator, buyer and seller. I’ve had a few people complain to me that they’d like to see me write on my blog about some of my experiences with buying and selling websites. Most of the deals I do aren’t as significant as that, but if people want to hear it maybe I’ll start posting about it.

Sitepoint’s Marketplace Succeeds Again is a post from: Peter Davis