Interview with Jeremy Wright
As mentioned in my intro, Jeremy Wright has been involved in the SitePoint Marketplace for a long time. Although he's a buyer of higher-end sites, his tips are applicable to any web site in the Marketplace. Read on for Jeremy's perspective on buying web sites.
PD: You're one of the few people who's been buying and selling sites on SitePoint as long as I have; what's your take on how the Marketplace has developed over the years and where do you see it going?
JW: That's a great question. I think the Marketplace has clearly evolved from the early days of everything goes. That was fine until it was flooded with turnkey sites and the like, and so they were split off. Later it was flooded with people misleading others, so the process was made slightly more stringent. And I know there are plans afoot to make it even more professional. However, I'm struggling to pinpoint ways in which it's better than it was five or more years ago ...
Do you look at the Marketplace primarily as a buyer these days?
Yeah, largely. b5media, the company I have the honor of helping run, is primarily a buyer rather than a seller. However, in the past I've been buyer, broker, and seller for some of the largest sales on the Marketplace.
b5media is known mostly as a blog network, so you'd be mostly looking at blogs to buy?
Yes and no. Fundamentally we're a media company. And while more than 90% of the content we produce is blog-based, we're always open to properties that are going to add fundamental value. Whether that's traffic, revenue, features, or community.
Well, what type of web site, or should I say, what attributes of a web site would gain your attention?
That's a great question. The kind of site that'll always grab our attention is one that has at least three of the following attributes:
- significant traffic -- that is, more than 1 million page views per month on a recognized statistics package (for example: Omniture, Google Analytics)
- significant revenue (more than $5,000 per month)
- minimal integration problems post-transaction
- different content to what we already run (unless it's a market leader)
- scope for improvement (seo, server infrastructure, ads, design -- anything we can optimize)
Probably our last BIG one was a video community site in the celeb space. It hit all criteria. The problem was that the previous owners had spent months inflating its traffic (via paid traffic) and failed to disclose it. Google Analytics was unable to show the issue, so the traffic was fake, the profit was fake and we learned some hard lessons. We still made our money by using the features elsewhere, but yeah -- lessons learned.
Has the economic conditions caused that change in your buying pattern?
Until this year, we typically bought 1-2 sites a month. Since the economy tanked, we've been waiting for it to bottom out so that we time purchases to their most cash-efficient point.
Our change in buying patterns has made it difficult for us to do open-market purchases. These days we do cash-light transactions with earnouts, bonuses, revenue guarantees, and so on; that way the seller makes more money than he would holding onto the property, but we're a bit more protected. Sometimes we'll do shares or options as well. This new style of buying, for us, makes using the open marketplace challenging; we either need to list just the cash component, or be seen to be inflating the cash component by stating the total deal value.
One last question and I'll let you go: How do you effectively sift through Marketplace listings without wasting your time looking at dead-ends?
Does an effective way exist? It'd be great to have an advanced search function, so we could look for our types of sites, but the reality is that we often find sites outside our sweet spot. Right now the bigger challenge is seller expectations.
Thanks very much for your time. Is there anything else you'd like to add?
Just a huge thanks to the crew at SitePoint, the Marketplace buyers and sellers, and all the Forum members who've helped me on my journey of growth. I wouldn't be where I am -- nor would b5media be where we are -- without you all. So a huge, huge thank-you to everyone
Tips for Buyers and Sellers
- Put your best foot forward
- Use a recognized statistics service to verify your traffic. (Recommended: Google Analytics)
- Work on building traffic as your first priority -- it's the foundation of value for your web site.
- When selling, let the buyer be the judge of what needs improving on your site, and avoid too much focus on it yourself.
- Make your site easy to manage for the buyer with standardized platforms and/or well-documented code.
- Give your site a unique voice. Good content sites are remarkable for the statement they make about a topic.
- Build sustainable revenue -- obviously.