Red flag, why did the price get reduced so quickly?

Also depending on the quality of the site will determine it's chance of stability in the future, Google's changing a lot recently. It would explain to me why he wants a quick sale now.

I have to ask, are you really confident in this purchase, and are you an expert at running these sorts of websites? Ballpark $300,000 is a huge amount of money for most individuals.

Well, a good portion of the price is going to be a part of an earn out - so 40% of gross revenue will go to him in the first year up until a certain point. The truth is there are probably very few buyers in this area with the combination of skills to run it and cash to buy it. Another reason the price dropped is that the initial price being offered probably wasn't that realistic. I'm sure if he was getting offers every day he'd keep the price high.


I would consider myself advanced in this area, but "expert" might be pushing it, having run a few sites myself and programmed a good deal.


I have indeed decided to use an escrow service (escrow.com), and I've been assured by them that if everything is not as described I can get a refund or worst case it will go to arbitration where our contract will be reviewed.

I think this provides me a decent level of security, and a few lawyers I've spoken to seem to think I'm protecting myself well. Then again, I really *want* this to work, so naturally I'm going to justify and explain away all sorts of suspicious activity, but I think I'm covering all my bases.

escrow.com is fine. As mentioned, just get a good, custom, contract written up and make sure that you are actually dealing with a real person who can be served with a suit if things go wrong. If the seller is outside the US, I'd be more wary.

Mango, If $300k is a lot of money to you, you absolutely should NOT do this. Start with something much smaller.

He said in update he negotiated to "significantly reduced price", but of course not sure how much significant means in dollars to this deal.

That makes it even more worrisome in my mind. Think about it. You have a business that nets a legit $300k/yr. Are you going to sell it for less than $300k? Obviously not. The only explanation is that the owner knows there is a lot of risk to these earnings in the future.

Since the amount is relevant to the discussion (and I'm certain not in violation of my NDA) we've settled on $175k + $100k as an earnout (paid using half the profits over the first year)

Bolded point is worth discussing.

The only way you're going lower than $300k is if there are basically very few buyers or if there's a heck of a lot of risk. It's really the only way you can find such a fantastic RIO other than finding an old retired couple in desperate immediate financial need that need to firesale their business.

The amount (as stated actually $175k upfront) is significant, but I do not need to mortgage my home nor take out a loan. Losing the money would be really bad, but I foresee the biggest issues being fighting with my wife over the money I just lit on fire.

Has the sale gone through yet? If not, please feel free to PM me all the info you have on it, I'm happy to look through it for you and give my opinion on it. I'm not an affiliate expert but might be able to offer some opinions of value to you. I don't know much about sales at this sort of level but I imagine an NDA is pretty standard, however it does make it harder for you to do due diligence I imagine.

Without knowing more, I'd be mainly concerned at how Penguin has hit this website, and how Google's future changes might adversely affect this sort of website.

What's your exit strategy? How long do you need to operate the site before you break even? The proof of earnings he provided, is there any doubt in your mind they have been misrepresented, or feigned?

Please be really careful

Edit: re-read one of your posts, Paypal screenshots are not enough evidence in my opinion for a sale this large. Paypal lets you set up guest accounts, you should require him to set one up for you so you can login to the Paypal account and view the records yourself. If he refuses this is another red flag for me

Sale has not gone through yet. We have a screen sharing session scheduled for tomorrow where I'm having him log onto his paypal account and show me the numbers match the screen shots, and then have him show me traffic statistics (shared screen so I can see it all). Is there doubt some of this could be faked? Yes. I have no reason to believe he's faking it, but I still have a lot to review.

To clarify, it's not a website, it's several hundred websites that form a network (a well hidden one). To deal with Google eventually catching up to
the business instead of article spinning I've been looking at get cheap, actual original articles and found a few places willing to provide

Does he use Google Analytics? GA also allows guest access to login. I would insist on having guest accounts for both GA and Paypal, and sufficient time (at least a few days, preferably up to a week) to go through the data.

Screen-share doesn't do it for for for such a big sale. It's not a bad thing necessarily he isn't offering you access to login and view for yourself - he simply might not be aware it's an option. For $300k though I want to login to both accounts and spend a few days looking at them. There shouldn't be any reason he would refuse anyway. With screen sharing it's highly unlikely you will be able to go into the data into any depth, and there is of course a bit of manoeuvring room for him to avoid showing you anything bad in the stats.

Google's clamping down on these sorts of networks, it's a real risk you're running. I also believe that Google is very smart, it's probably only a matter of time before they detect it. If you're looking at say over 1 year to profit I would think it's far too risky for this reason alone. This is a good reason why the owner would want to sell it, especially if he has friends with similar networks who are being shut down/caught.

Do you know the details of how he stays hidden? Do you understand it, and have confidence in it?

That is the definition of article spinning is it not? I'm sorry to say but any cheap articles you buy are all going to be junk. In my understanding, Google is really reducing influence of amount of content, and is focusing on quality of articles through metrics such as social sharing. Getting articles written might be a plausible temporary buoyancy, but long term (>1 year) it's going to be a tactic with diminishing returns.

This sort of purchase sounds very high risk, if Google does act against this network it would be worth nothing overnight. I wouldn't sleep very well for a long time.

I don't think it's a steal, I think it's a gamble on the fact that Google wont detect the network within a long term period, nor will they make algorithmic changes that are unfavourable to any sites on the network.

It's against Google's tide so it's a pretty big gamble.

If the seller is in the US, it is unlikely that they are trying to outright defraud you. Put whatever you think you are buying in the sales contract, and if it turns out to be something completely different they would be facing major legal problems. That's a very risky way of defrauding people.

If they are trying to cheat you, it will be in much subtler ways. They will either make the business seem more optimistic or not mention troubled waters ahead - be they external or coming from the seller/seller's friends. For example, they guy can probably make a copy of the client rolodex and start converting your biggest customers to their network in the months after the deal is done. Or covert them to his buddies networks if they signed a noncompete with you... Things like that.

If I were making this purchase, I would take a very close look at the background of the seller. Is he some random guy with no reputation and no track of success or failures? What have they done in their life aside from this site?

It sounds like you are buying a Build My Rank kind of site. Tons and tons of these networks exist out there and they are mostly operating without problems. But they are no secret and it's not hard to figure out the sites that belong to the network. They need to get clients somehow, and all it takes is one rat. And of course, with Panda update Google made it very clear what they think of these networks and it is pretty clear that they are trying to kill them off. You might stay under the radar for a long time or a short time, but I would bet my money on the Google brainpower to eventually make your life miserable.

Personally, I think that at some point, less and less emphasis will be given to PR, and much more emphasis given to social networks. And social networks are a lot harder to game. Google can see that the 1000 'likes' you got overnight from a Fiver gig is a bunch of dummy accounts from Israel that have no friends and no social interaction and no history... In a sense, it will be like PR... for individuals. If you get a shutout on Zuckerber's page, it will be worth more than some random spam account... it will be worth even more if it's shared, etc....

I would becareful op. The quote below is by an internet hustler.


Oh and I guess one of the things with online businesses is there's a lot of idiots out there trying to get into the game. If I start up a website selling a product the lifespan is really ~10 months. The first month you'll get tons of sales from your email list, then the affiliates will come and sell tons for you for 6-7 months, then you cut the price send out another email get some more sales, then it is really done.

That is the try to flip it and sell it to someone. Show them it's made 30k/month for past 10 months and you're selling for some BS reason. Some idiot will buy it for 9 months revenue and probably never make his money back, but oh well.

It's much easier for sites that make 3k/month, but there's still people who fall for it with higher end sites.[/QUOTE]

This is exactly what it is. Networks like the one described here go down all the time. His ROI is likely going to be very polarized to either making a lot of money or losing a lot. It all depends on how long it takes google to drop the sites' rankings.