How a Website Lost 90% of it's Value in 2 Months

tolkein · 11-15-2005, 09:26 PM

The general considerations when buying a website are always the website's traffic and it's monthly earnings. Unfortunately, many buyers fail to ask for the referrer statistics. Here is a real-life example of how this one single factor reduced a website's value by 90%.

The website in question, is an unofficial fansite for one of the most recognizable soccer player in the world. It was listed for sale at the end of August and the seller asked for a minimum bid of $2,000. This seemed fair based on the site's traffic and earnings at the time:

Statistics
????: NamePros.com http://www.namepros.com/webmaster-tutorials/140396-how-website-lost-90-its-value.html
- unique visitors: 22,000/month
- pageviews: 80,000/month
- Adsense earnings: $227/month

However, upon closer inspection of the Webalizer statistics, it was found that 78% of the page views came from search engines, and 93% of this came from Google Images.

The seller later revealed that the website was ranked number 1 on Google Images for the soccer player's name. This puts the site at a high risk because it meant that the site could possibly lose 70% of it's pageviews, and thus earnings, if it fell off the top spot.

Fortunately, nobody bought the fansite at that time.

Almost a month and a half later, the website was listed for sale again. It's ranking on Google Images had fallen from 1st to 88th position, causing it's unique visitors to drop to only 6,000/month. Adsense earnings also fell to about $40/month. The website was finally sold this time and for $200 - 90% off the original minimum bid price.

----------------------------------
- Article from larrylim.net
----------------------------------

mholt · 11-16-2005, 05:50 AM

Very interesting. So basically you're saying NOT to buy sites listed high in Google, or at least maintain its ranking?

downloadfreak · 11-16-2005, 06:22 AM

the site was obviously www.davidbeckham.ws

Joseph · 11-16-2005, 06:33 AM

Originally Posted by compuXP

Very interesting. So basically you're saying NOT to buy sites listed high in Google, or at least maintain its ranking?

????: NamePros.com http://www.namepros.com/showthread.php?t=140396
I think the moral of the story is to do your reseach first

bluenoser · 11-16-2005, 01:23 PM

Originally Posted by Joseph

I think the moral of the story is to do your reseach first

But how many people actually do? I am sure that the guys who have been doing this for a while do, but what about the newbies who have some cash and want to try to make it BIG online, I think it is those people who get burned.

I have only bought one site and it turned out the script that it was running was a dud, the owner sold it about 1 month later and the new owners have ran away. Luckily I only lost $30 on the thing, I am now starting a new site from scratch with the same domain...
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

But I have learned my lesson, but it didn't cost me much

Joseph · 11-16-2005, 02:05 PM

Originally Posted by bluenoser

Originally Posted by Joseph

I think the moral of the story is to do your reseach first

But how many people actually do? I am sure that the guys who have been doing this for a while do, but what about the newbies who have some cash and want to try to make it BIG online, I think it is those people who get burned.
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

I have only bought one site and it turned out the script that it was running was a dud, the owner sold it about 1 month later and the new owners have ran away. Luckily I only lost $30 on the thing, I am now starting a new site from scratch with the same domain...

But I have learned my lesson, but it didn't cost me much

yeah I get your point entirely! i was the same when I first started! No I do my homework! I think sites like NP and others such a have smething like this stickied on what to look for when buying! But I must say NP is excellent at combating scammers!

dc1pop · 11-16-2005, 03:40 PM

Originally Posted by downloadfreak

the site was obviously www.davidbeckham.ws

Thats what i thought..
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

Grungemusic where are you.

Also the summary of the above is near enough what he stated at the time of sale

tolkein · 11-17-2005, 08:43 PM

Originally Posted by dc1pop

Thats what i thought..

Grungemusic where are you.

Also the summary of the above is near enough what he stated at the time of sale

The whole purpose of my write-up is to teach others to be extra careful when "splurging" on websites.

Hence, please refrain from guessing which website I'm writing on because it is not important.
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

I won't confirm or deny any of your speculations ...ever. And if we continue like this, my sources may not be so forthcoming with their experiences in the future and I won't be able to write "true stories" anymore.

Appreciate your understanding.

tony84 · 11-18-2005, 02:37 AM

it didnt lose 90% of its value, it didnt sell so it never had that value in the 1st place

dc1pop · 11-18-2005, 05:05 AM

Originally Posted by tolkein

The whole purpose of my write-up is to teach others to be extra careful when "splurging" on websites.

Hence, please refrain from guessing which website I'm writing on because it is not important.

I won't confirm or deny any of your speculations ...ever. And if we continue like this, my sources may not be so forthcoming with their experiences in the future and I won't be able to write "true stories" anymore.
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

Appreciate your understanding.

Im not sure how knowing the name of the site would harm the user?

By any means it should generate it extra traffic as people go to it to check it out surley??

Also like another user said the same site im sure may of us whom are avid users of NamePros all knew the site you was discussing.

AlexK · 11-18-2005, 05:17 AM

Something to think about

Thanks!

tolkein · 11-18-2005, 05:38 AM

The MAIN purpose of this article was to share my experience, so please forgive me if there's grammatical errors or I used the wrong choice of words like "value".

Don't you think there's a reason why I PURPOSELY ommited the name of the site? It was to protect the source. So if you know the name of the site, good for you but you don't need to mention it here.

It's really sad. In another forum, the members were either showing their appreciation, analyzing the story or sharing a similar experience. Here, people are more interested in guessing the website or correcting my English.

sunken · 11-18-2005, 09:21 AM

Good advice. When I started last year, I did get burned a couple of times on some sites I bought and I soon realized what is mentioned here, to do more homework and ask a lot of questions. I think the thing is that newbies don't really understand that this is a business you're buying (unless you just like the site for the site's sake). And in any business, there is going to be ups and downs. Unfortunately, the industry values websites based on revenue projection which is not meant to be misleading intentionally, but is misleading in what a site does now is not what a site may do in 3 to 6 months. I've seen a couple deals I thought about going after, but was not sure I wanted to take the risk.

As for the image search, I can certainly relate to that. I had a piece of artwork that was number 4 at one point for the term black horse (on page 1). It got a busload of hits at that time, and was one of the top performing pieces in my collection. But there was an update later on, and somehow it got dropped way down in the list (not even sure where exactly, but some people still find it that way). No where near how many as before.

The bottom line is know what you are buying and how you plan to personally market and maintain it before you purchase it. Don't necessarily rely on what it's doing now cause that can change as any business can.

Thanks for the story tolkien...

dongan · 11-25-2005, 03:31 AM

it is true. Referral statistics is very important and many people is not aware of this.

Maverick · 11-25-2005, 08:20 AM

An interesting piece of writing which gives much to think about. I appreciate your sharing this tolkein.

Genialnames · 11-25-2005, 08:47 AM

Yes, I think it is interesting reading too,
would be nice to have a sort of guide on hand to be used each time when considering a purchase.
And also when put a domain for sale, but this I think in this case many wouldn't deliberately use it, but this is another story

thanks

[quote ]The MAIN purpose of this article was to share my experience, so please forgive me if there's grammatical errors or I used the wrong choice of words[/quote]
I liked that because it happen to me sometime that people
missunderstand my intention, when these are only that.

rep added.

tolkein · 11-25-2005, 09:20 AM

Genialnames: I think I'll write a buying guide once I have more time.

I just finished http://www.clickcash.ws which is a step-by-step guide to get newbies started on making money from their websites - did it in response to a "noob" question in another forum.

sjp · 11-25-2005, 09:40 AM

tony84 makes an important point. The website was never worth $2000, therefore it didn't lose 90% of it's value.

Genialnames · 11-25-2005, 10:59 AM

tolkein, I wish you succeed,
I wait for your next work, in the while I take a look at clickcash.ws.
;-)

slaughterbeck · 11-25-2005, 12:15 PM

Originally Posted by tolkein

Statistics
- unique visitors: 22,000/month
- pageviews: 80,000/month
- Adsense earnings: $227/month

Originally Posted by sjp

tony84 makes an important point. The website was never worth $2000, therefore it didn't lose 90% of it's value.

Based on these statistics over a three or four month period I would definitely believe the value to be positioned in that monetary range ($227/Month in Adsense alone with many other avenues to generate revenue) but I don’t think that was Larry’s point.
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

The fact that the site was so dependent on its #1 Google image ranking for the soccer players name made it risky, vulnerable to the changing variables of the search engine.

Genialnames · 11-25-2005, 01:11 PM

sorry, I typed in the wrong post.
(I deleted the previous entry and put this instead)

BillyConnite · 11-25-2005, 07:13 PM

Originally Posted by tony84

it didnt lose 90% of its value, it didnt sell so it never had that value in the 1st place

I must disagree with you - Just because it didnt sell, doesnt mean that the VALUE of the site wasn't $2000!... A house may be valued at around $400,000, not $0 just because it hasn't been sold yet! Obviously the site isn't worth that now due to the loss in revenue, but at that point, with the lack of knowledge that ranking #1 in Google images could infact do harm, $2000 really was the value of the site.
????: NamePros.com http://www.namepros.com/showthread.php?t=140396

Many people value a website on average monthly earnings * 12... In which case the value would've been even more.

The point larry was making is that you should be careful when buying a website, and do your homework if your willing to spend $2000 on one. It pays off.

just my opinion.

kingfisher · 12-03-2005, 07:47 AM

Very interesting. thanks for that ....i might see the full article

11-15-2005, 09:26 PM	THREAD STARTER #1 (permalink)
tolkein NamePros Regular Join Date: Jul 2005 Posts: 993	How a Website Lost 90% of it's Value in 2 Months The general considerations when buying a website are always the website's traffic and it's monthly earnings. Unfortunately, many buyers fail to ask for the referrer statistics. Here is a real-life example of how this one single factor reduced a website's value by 90%. The website in question, is an unofficial fansite for one of the most recognizable soccer player in the world. It was listed for sale at the end of August and the seller asked for a minimum bid of $2,000. This seemed fair based on the site's traffic and earnings at the time: Statistics ????: NamePros.com http://www.namepros.com/webmaster-tutorials/140396-how-website-lost-90-its-value.html - unique visitors: 22,000/month - pageviews: 80,000/month - Adsense earnings: $227/month However, upon closer inspection of the Webalizer statistics, it was found that 78% of the page views came from search engines, and 93% of this came from Google Images. The seller later revealed that the website was ranked number 1 on Google Images for the soccer player's name. This puts the site at a high risk because it meant that the site could possibly lose 70% of it's pageviews, and thus earnings, if it fell off the top spot. Fortunately, nobody bought the fansite at that time. Almost a month and a half later, the website was listed for sale again. It's ranking on Google Images had fallen from 1st to 88th position, causing it's unique visitors to drop to only 6,000/month. Adsense earnings also fell to about $40/month. The website was finally sold this time and for $200 - 90% off the original minimum bid price. ---------------------------------- - Article from larrylim.net ---------------------------------- __________________ Top 10 SEO Tips For Wordpress Blogs

11-18-2005, 05:38 AM	THREAD STARTER #12 (permalink)
tolkein NamePros Regular Join Date: Jul 2005 Posts: 993	The MAIN purpose of this article was to share my experience, so please forgive me if there's grammatical errors or I used the wrong choice of words like "value". Don't you think there's a reason why I PURPOSELY ommited the name of the site? It was to protect the source. So if you know the name of the site, good for you but you don't need to mention it here. It's really sad. In another forum, the members were either showing their appreciation, analyzing the story or sharing a similar experience. Here, people are more interested in guessing the website or correcting my English. __________________ Top 10 SEO Tips For Wordpress Blogs

11-18-2005, 09:21 AM	#13 (permalink)
sunken Senior Member Join Date: Oct 2004 Location: New Jersey Posts: 2,279	Good advice. When I started last year, I did get burned a couple of times on some sites I bought and I soon realized what is mentioned here, to do more homework and ask a lot of questions. I think the thing is that newbies don't really understand that this is a business you're buying (unless you just like the site for the site's sake). And in any business, there is going to be ups and downs. Unfortunately, the industry values websites based on revenue projection which is not meant to be misleading intentionally, but is misleading in what a site does now is not what a site may do in 3 to 6 months. I've seen a couple deals I thought about going after, but was not sure I wanted to take the risk. As for the image search, I can certainly relate to that. I had a piece of artwork that was number 4 at one point for the term black horse (on page 1). It got a busload of hits at that time, and was one of the top performing pieces in my collection. But there was an update later on, and somehow it got dropped way down in the list (not even sure where exactly, but some people still find it that way). No where near how many as before. The bottom line is know what you are buying and how you plan to personally market and maintain it before you purchase it. Don't necessarily rely on what it's doing now cause that can change as any business can. Thanks for the story tolkien... __________________ juegos juegos \| Your Hotel in Austria psicologo valencia

11-25-2005, 03:31 AM	#14 (permalink)
dongan Senior Member Join Date: Nov 2005 Location: www.mercuryminds.com Posts: 2,044	it is true. Referral statistics is very important and many people is not aware of this. __________________ MercuryMinds - Professional X-Cart Design, X-Cart Development, X-Cart Customization Services MercuryMinds - X-Cart addons, modules

11-25-2005, 08:20 AM	#15 (permalink)
Maverick NamePros Regular Join Date: Jun 2005 Location: Canada Posts: 808	An interesting piece of writing which gives much to think about. I appreciate your sharing this tolkein. __________________ GamersPit - I-Searches Directory

11-16-2005, 05:50 AM	#2 (permalink)
mholt DNOA Member Join Date: May 2004 Posts: 5,040	Very interesting. So basically you're saying NOT to buy sites listed high in Google, or at least maintain its ranking?

11-16-2005, 06:22 AM	#3 (permalink)
downloadfreak Account Suspended Join Date: Apr 2005 Location: Norfolk, England. Posts: 1,057	the site was obviously www.davidbeckham.ws

11-18-2005, 02:37 AM	#9 (permalink)
tony84 Account Suspended Join Date: Oct 2004 Location: Manchester, UK Posts: 623	it didnt lose 90% of its value, it didnt sell so it never had that value in the 1st place

11-18-2005, 05:17 AM	#11 (permalink)
AlexK NamePros Member Join Date: Sep 2005 Posts: 94	Something to think about Thanks!

11-25-2005, 08:47 AM	#16 (permalink)
Genialnames NamePros Regular Join Date: Jun 2005 Location: Italy Posts: 794	Yes, I think it is interesting reading too, would be nice to have a sort of guide on hand to be used each time when considering a purchase. And also when put a domain for sale, but this I think in this case many wouldn't deliberately use it, but this is another story thanks [quote ]The MAIN purpose of this article was to share my experience, so please forgive me if there's grammatical errors or I used the wrong choice of words[/quote] I liked that because it happen to me sometime that people missunderstand my intention, when these are only that. rep added. __________________ www.genialnames.com Mostly developable Domain Names...because the name says it all! Olympionic.com it's mine, it could be your!

11-25-2005, 09:20 AM	THREAD STARTER #17 (permalink)
tolkein NamePros Regular Join Date: Jul 2005 Posts: 993	Genialnames: I think I'll write a buying guide once I have more time. I just finished http://www.clickcash.ws which is a step-by-step guide to get newbies started on making money from their websites - did it in response to a "noob" question in another forum. __________________ Top 10 SEO Tips For Wordpress Blogs

11-25-2005, 09:40 AM	#18 (permalink)
sjp NamePros Member Join Date: Oct 2005 Location: Andromeda Posts: 136	tony84 makes an important point. The website was never worth $2000, therefore it didn't lose 90% of it's value.

11-25-2005, 10:59 AM	#19 (permalink)
Genialnames NamePros Regular Join Date: Jun 2005 Location: Italy Posts: 794	tolkein, I wish you succeed, I wait for your next work, in the while I take a look at clickcash.ws. ;-) __________________ www.genialnames.com Mostly developable Domain Names...because the name says it all! Olympionic.com it's mine, it could be your!

11-25-2005, 01:11 PM	#21 (permalink)
Genialnames NamePros Regular Join Date: Jun 2005 Location: Italy Posts: 794	sorry, I typed in the wrong post. (I deleted the previous entry and put this instead) __________________ www.genialnames.com Mostly developable Domain Names...because the name says it all! Olympionic.com it's mine, it could be your! Last edited by Genialnames; 11-25-2005 at 01:16 PM.

12-03-2005, 07:47 AM	#23 (permalink)
kingfisher NamePros Member Join Date: Aug 2005 Posts: 37	Very interesting. thanks for that ....i might see the full article

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**How a Website Lost 90% of it's Value in 2 Months**

How a Website Lost 90% of it's Value in 2 Months