site went from 200 visitors/day to 8/day

Maybe you have added far to many ads and html so you are being punished by google. What did you add after you bought the site?

Whoever owned the site could have been paying for traffic and then stopped buying traffic as soon as he sold it.

He may have linked to it himself from his others sites and the removed the links.

- this is worse case scenario and may not have happened here.

could even have something to do with the two algorithm updates that google has done this year. Is your site a scraper site?

I'd say give it 2 weeks and if you still have the lower end of traffic come back and ask.

You can get variances in traffic. I've seen it on all my sites that rely on SEO. You can also get sandboxed for short periods of time. (Ok I know all the SEO gurus will kill me for using that term technically incorrectly) but we all know that your position Google can change on a daily basis, even hourly, and if I get a lower rank than usual and come back later I call that a sandbox.

On the positive side you have a site that gets stuff ranked, so get writing some new content and that may help you.

Also perhaps get rid of ads and distractions until the traffic comes back.

I doubt the existence of ads (other than paid links) affect SEO that much but you could try to remove them until you get more traffic and then introduce them again.

I hope you were not framed by the seller but is doesn't look good.

I bought sites via flippa in the past. Not now anymore. All the statistics these sellers are providing you look great.

Unitil you buy them. Then it suddenly drops. Coincidence? Nope.

And it's not only I got burned badly on Flippa, but the sites who really are very well appreciated by google and give you a nice residual income cost you even more. Many experienced buyers know when they see gold and are bidding like crazy.

So it needs a lot of time in order to find these golden nuggets - every bit of info have to be cheched and checked again. Then you have a chance that you buy a great website for a huge price that is.

For me Flippa it's not worth the time and money.

did you checkbaklinks still exist through siteexplorer.yahoo.com before and after?

If the change happened on Feb 24th, then you got hit by Google's Farmer Update:
Google's Content Farm Algorithm Released: Who's Hit Most?

Changing owners does not make the site a "new site" in Google.

And the chances of you being penalized for something that someone else hosted on your server has done is slim at best.

dont worry about it now, do some promotion now and try to get more traffic.

Since you said all traffic all organic then, my only guess is that there were some out-site SEO work being done to keep the site up in ranking. Now that he no longer owns the site, he stops optimizing it.

yeah maybe backlink has remove, your blog weak in seo!

As Bill stated it is either the Google change that is effecting the site or the seller was linking back to your site with keywords and then removed them causing Google to drop your site.

Use a tool to see where the links where coming from to your site/pages and go over and see if the links are there.

My first impression was that the seller pumped it up for the sale, and then waited just long enough, and pulled the back links. You probably don't have any recourse from him. Going to have to roll up your sleeves and try to salvage your investment.

You need to be careful when buying website. There are a lot of people build their website for short term, sell it, and traffic goes zero. I have been buying website at Flippa for 2 years. Here's what you need to do before buying:
1. Check their traffic. You need to be careful if they only give awstat. Awstat usually shows bot traffic. This will make the traffic looks very high. Check their source traffic. The best is you get traffic from search engine. You need to be careful if the traffic is not from SE. This traffic can not sustainable. They can be from Twitter, Facebook. When they sell do they give the Twitter and Facebook account?
2. Check the backlink. You can do it easily using Google.com. Type link:thedomain.com . This will return the backlink. See if it has several backlink from the same site. If yes that's a warning. Find out if that backlink if the seller's. After he sells it, he can just remove the backlink and you end up having zero traffic.
3. Check the site ranking. I usually use keywordspy.com. It will show the keyword for that domain.