Matt at Blogging Fingers has come up with an idea for the holidays and made it into his December project and a challenge for his fellow bloggers:
The target with this site is to earn $150-$250 during December when everyone is buying Christmas presents and then sell the blog late January when the January sales are slowing down. I will then pick the most profitable 30-day period to display as the monthly earnings. E.g. December 15th – January 15th may have earned more than simple the month of December. If there is a 30-day period where $200 was earned, the site should have no problem selling for over $2000.
It is a pretty standard idea. Build up a blog, then sell it. But the way that he describes it, I have to ask, is that ethical? It seems a little shady to me to take a blog that’s only been around for 1-3 months, only advertise the best 30 day period of income and then try and get 10x that amount as a sale price. Especially knowing full well that that could be the most profitable 30 day period of the sites annual cycle.
It is possible that the new owner could put a little work into the site. Further the promotion of the site. And get the site to the point of making that $200 or more even in the slower months. But what if it doesn’t happen? What if that really is the high point of the year. Let’s say for arguments sake that the site only makes $60 a month for all months except a 90 day period surrounding the holiday season. For those 90 days, the site makes $150, $200, and $150. That gives you about $1040 for the year before hosting and advertising. That makes the $2000 selling price nearly 2 years worth of income. There’s a reason that most sites sell for 10x to 12x monthly income. Nobody wants to wait that long for their break even.
Lastly, what blog buyer isn’t going to do their due diligence and ask for a little more than a 30 day window of income? I really think you shouldn’t do too much unless you can get a 6 month average. It’s smart to do so. At least I think so. Of course, Matt recently sold Blogging Fingers for $6000 so maybe I’m way off here? Or maybe Matt is the Kevin Trudeau of the blogosphere. Blogomercial anyone?
Hmmm… Maybe I’ll participate and create a Debt Cures blog for the holidays… I could talk about the use of online real estate flipping as a method of debt reduction. ðŸ™‚
Besides, in the end, my issue is more with the method of reporting income for the basis of the sale price than with the idea.
What do you think? Would you buy a blog if you knew that the seller had selectively chosen the best 30 day period to use as the stated monthly income of the site? Or would you want to see 6 months (or from inception) numbers first? If you were the seller, would you consider it ethical to sell a blog in that way?