As webmasters and bloggers, we sometimes are fortunate enough to be given the opportunity of a merger or a buyout of one of our web sites. In most cases this raises a whole new set of questions and is usually not an easy decision to make. About a year ago I was given the opportunity to sell one of my very fast growing web sites for near seven figures and a revshare for a two year period. After the two year revshare, I would lose total ownership of the site. This was my fastest growing site, and was less than six months old at that point. What would I do?
Since the founding of MoneyReign I have always worked for myself and have never had any other staff members. Sure, I outsource some programming and web designing jobs here and there, but they would not be considered part of the company. Being president, CEO or founder of a web site that grows dramatically can be very stressful when deciding whether or nor to sell part of your company, and in essence yourself. Will the new company care as much about your web sites as you? Will they maintain the standards you have held in what gets published to the site? You will need to ask yourself many questions like these, should you be approached with the opportunity to sell.
After going over many figures associated with several offers, talking with my attorney as well as close friends who also were at some time in the position to sell, I ultimately made the decision to not go forward with the merger and keep the site in my network. Financially, the opportunity did not make total sense, as they were offering only what the site had nearly grossed already. The potential upside was in becoming part of their network and the rev share growing while cycling their own network traffic into mine, as well as being able to say I was bought out by another company!
Almost a year has passed now and this same company has gone on and partnered with several other sites, some of them fairly large. I cannot stress how happy I am that I never went forward with the acquisition. Every couple of months a new rep from their company still sends an email to me or messages me on IMer, trying to influence me again into selling. They even tried lowering their new offer for the site by 50%… not very intriguing at all. I will never work with this company in the future, just for that fact that while I was in a chat conversation with their main M&A representative (I can only assume he was frustrated by me not wanting to sell the site) he started going off on a tangent about me lying about my numbers and quickly left the chat window I thought this was hilarious and so unprofessional… further justifying that I made the right decision to not work with these guys.
Regarding other mergers/buyouts by this company, I’ve noticed skanky (almost adult) video clips added to sites they purchased (to increase click throughs).
The moral of the story is, if you are ever in the position to sell or go into a merger, don’t rush into it. Find out about the company. I know it sounds obvious, but make sure all possibilities are thought through thoroughly. Understand what you will be giving up in the process, mainly control. I would be so disappointed today if I no longer owned what remains one of my hottest sites and something I’ve put so much time and effort into, just for another company with some funding to buy and ruin it with trash ads and treat it just as another source of traffic.
My friend Jim Cramer would probably not agree with me on this, but all business decisions are not simply the bottom line when it’s your own company or web site at stake, the decision to partner or sell goes well beyond dollar and cents. I am still hopeful that at some time I will be able to sell off a web site or two for a nice profit (who doesn’t), but I feel I will know better when it is the right thing to do, based on the experience I have described here. I hope it makes you think twice before “selling out”.