Lessons from an Acquisition

As many of you saw yesterday, Internet Brands (NASDAQ:INET) has acquired one of my sites.  (The sale actually closed in February, but they wanted to finish up all their acquisitions before announcing any of them.)  Since then, I have also worked with a friend as he went through the same process.

Now that both the deals are public knowledge, I wanted to pass along some of the things I learned while selling two high-dollar sites to large companies for those of you who are contemplating a sale now and those of you who will somewhere down the road.  (Also be sure to read “How to Sell a Website.”)

Enlist the Help of Professionals

If you believe your site could sell for more than $100,000, you’re throwing money away if you don’t use an experienced broker or investment banking firm to help you sell it.  Because they’re much more adept than you at running an efficient process, finding potential buyers, and maximizing the bids from those buyers, they make up their fee many times over.

For example, this whole process started when I received an unsolicited bid for the site.  Before all was said and done, though, my representatives had secured not just one, but two final bids that were easily more than twice what I ever could have gotten on my own.

If you’re looking to sell, now or in the future, I can provide you with some strong recommendations.  Use the Contact Me link above to get in touch with me.

The Final Offer Isn’t the Finish Line

Getting the final bids in is just one step along the way.  You’re not done until you actually close the deal, and that’s not a foregone conclusion by any means.  That’s why it’s important to understand that…

All Buyers are Not Created Equal

Thankfully, I think we would have been well-served going with either of our two strongest bidders.  Both were fantastic throughout the entire process, and I worked with more rockstars at Internet Brands than I ever have at any other company.  The head of their transition team was amazing, and they backed up every single promise they made.  I would do another deal with them in a heartbeat.

I can’t say the same for my friend, though.  He accepted a great offer only to see it deteriorate miserably over the next few weeks — leaving him having to go with the number two bidder.  He still ended up with a great deal, but it wasn’t nearly as smooth as he and I had expected it to be.

It’s Not All About the Money

Okay, it is mostly about the money, but there are several other intangibles that factor in heavily as well.

How much time do they want to have to transition the site?  You don’t want to be waiting around for several months, running the site as a lame duck, while they take their time transitioning the site.  Be sure the transition time is stated clearly and that it’s not longer than it has to be.

What responsibilities will you have after the transition?  Make sure those are stated clearly as well.  If you want to just transition and walk away, make sure to get that into the agreement.  In many cases that’s a reasonable request and one that buyers will be okay with.  In others, though, there are strong reasons for them to want you to stick around.  It just depends on your situation.

What restrictions will you have with regard to going into similar businesses in the future?  For instance, imagine you have two offers on the table: one is for $100,000 more than the other, but it also prevents you from entering similar businesses within the next 5 years.  Is it worth $100,000 to handcuff yourself for the next 5 years?  It may very well be, but think about that as you’re weighing different offers.

Know When to Walk Away from the Table

My wife and I went to Puerto Rico with my company back in 1998 and stayed at the Westin Rio Mar Beach — a great resort that also happened to have a friendly little casino.  I’m not a gambler, but Brett and Allen from Summit Catalog (great guys and great friends) spent the week showing me how to get almost even odds at the craps table, and by the last night I was ready to put all I had learned into practice.

Man, was it easy.  Within minutes I was up $250 and still going strong.  They were clearly great teachers, and we were going to walk away with some outstanding spending money.

It didn’t take long for things to start heading the other way.

Before I knew what had happened, I had lost almost all my winnings.  I had no idea what hit me.  How did things change so fast?

As I left the table with exactly as much as I had started with, the nice man working the table gave me some of the best advice I’ve ever gotten: Nobody taught you about knowing when to walk away, did they? I’ve never forgotten that.

The less defensible your site is, the more it’s just like gambling.  I had built the site into the largest site of its kind on the web, but 85% of the traffic came from search engines.  It had had top rankings for highly competitive terms in Google for years so there was no reason to expect that to change, but would that be any consolation if Google suddenly decided to change things and the business disappeared overnight?

Yes, there’s a good chance that you’ll leave money on the table (I did), but you have to weigh that against the chance that something disastrous happens to the business.  Every day you hold on to it, the risk increases.  At some point you have to make the decision to bank your equity and walk away with your winnings.

You’re Never Guaranteed Another Opportunity

One of the biggest things I’ve learned over the past year is that past success is no guarantee of future results.  I had always assumed that I’d be able to use the same strategy for several more years (it had worked for years, so why wouldn’t it work for several more?), but it became apparent during the process that similar opportunities were drying up fast.  I might be able to replicate the same success once or twice more, but there was no guarantee.

Since then, too, I’ve become more and more conscious of just how many well-known successes are actually one-hit wonders.  Their one-time success brings them fame, but they struggle to replicate the same success again — even with the same techniques.  There are obviously exceptions (ShoeMoney, for instance, has hit several homeruns), but look around and notice how many people are more famous for being famous than for a history of multiple successes.

Obviously this makes the decision to walk away even harder.  If this may be your only chance to secure your retirement, how do you know when it’s time to sell?  I don’t know.  Every situation is different.  I’m happy to talk to you if you’re struggling with that right now, though.  I may not have an answer, but sometimes it just helps to talk to someone who’s been there.

It’s Totally Worth It

It never crossed my mind a year ago that I might get to this point and regret everything — selling the site, spending two and half years of my life building it, etc. — but I see now that it could have easily ended up that way.  Thankfully, though, nothing could be further from the truth.  It was totally worth it, and I’d do it again in a heartbeat.

It’s worth every minute you put into it, every time you decide to press on instead of quitting, every time you sacrifice to get closer to the dream.  Totally worth it.  More than I ever imagined it could be.


  • Peter Askew

    August 8, 2008
    at 10:55 am

    great great (did I say great?) post..

    posts like this keep me motivated..

    we gotta meet up soon, I wanna catch up..



  • Shane

    August 8, 2008
    at 2:54 pm

    Thanks, man. I really appreciate it.

    Look for an email.


  • SEO Book.com

    August 9, 2008
    at 11:46 am

    Buying & Selling Websites…


  • Jaan kanellis

    August 9, 2008
    at 12:12 pm

    Great post Shane especially on knowing when to walk away.


  • Nat Arem

    August 9, 2008
    at 12:45 pm

    Which one of those was your site?

    I kind of regret not doing this when I sold a site for a sizable dollar amount a few years ago, but live and learn.


  • Shane

    August 9, 2008
    at 2:27 pm

    It was Nursing Jobs.org. I had owned it for about 2.5 years.

    And yes, I’m a big believer in living and learning. You’ll definitely screw up along the way, so might as well learn from it.


  • Jaan kanellis

    August 9, 2008
    at 2:48 pm

    Thanks Shane. Just wondering why did you put the forum on another domain and was that other domain part of the acquisition?


  • Shane

    August 9, 2008
    at 3:45 pm

    Great question, Jaan.

    I launched the forum on another domain so that I could decide on the fate of the two separately. They were still heavily cross-linked and cross-marketed, but keeping them on separate domains let me decide whether to sell just one of the sites or both. I knew any ultimate purchaser might be more interested in one or the other and that I could maximize the final revenue by being able to deal with each separately — just like how Tribune is keeping open the option that the Cubs could be sold to one buyer and Wrigley field to another.


  • Rich Owings

    August 10, 2008
    at 4:10 am

    How do you go about finding and selecting a qualified broker or investment banking firm?


  • Shane

    August 10, 2008
    at 6:48 am

    There are two things I think are essential in choosing a good representative: ability and trust. I need to be confident that they can do the job, and I need to be able to trust them.

    For those reasons, it’s important for me to have a personal recommendation from someone I trust and to be able to see a proven track record.


  • M!hai @ Freshome

    August 10, 2008
    at 7:01 am

    Sometimes you need to read a post like this to skyrocket your motivation, because we all know how easy is to lose motivation in these days with all those ads all over the place, made just to want more and more. Thanks !


  • Shane

    August 10, 2008
    at 10:51 am

    Thanks for the kind words! I’m glad it was helpful for you.


  • Alex Newman

    August 11, 2008
    at 12:32 am

    The site you sold to IB… did you always plan to sell it from the start? Do you think it better to plan the entire site campaign with a view to final sale or do you think it doesn’t matter?


  • Shane

    August 11, 2008
    at 10:56 am

    That’s a great question, Alex.

    I honestly don’t remember what my ultimately goal was — or if I even had one. I’ve found in my life that I’ve been woefully to unable to predict things 1 year in advance, much less several years, so I probably didn’t go into it with any particular end-goal in mind. I was probably only focused on increasing traffic and revenue as much and as fast as possible.

    What I think is essential is to make sure you’re prepared for whatever scenario you end up finding yourself in — the first step in that being to lay a firm foundation so that your fundamentals are established as firmly and as early as possible.


  • Kelly

    August 11, 2008
    at 4:24 pm

    I like this post, especially “is not all about the money” part. Taking a decision to sell something that have opportunity to grow in value is not easy. Even when buyer bid in high price, but I think it’s difficult to compare the bid with the future value if we manage the site ourself. The intangible factor must get biger portion in this stage.


  • Alex

    August 12, 2008
    at 10:43 am

    Shane. Wow! Great article. Very inspiring.

    Don’t spend it all in one place.




  • Poems Girl

    August 13, 2008
    at 4:12 am

    Thanks for such a wonderful post. I can read it again and again

  • […] second article on selling websites is by AskShane.org and is the written by Shanesel who recently sold his website, check it out and […]


  • Rusty Davidson

    August 14, 2008
    at 2:16 pm

    Shane, I would love to sit down and have you show (teach) me what you did. Glad for you!


  • BlogSavvy

    August 18, 2008
    at 10:35 am

    Great Post, Too often you count you chickens before they hatch, I never understood this until I was selling a business, and while the first offer was like, WOW, I could buy a Porsche, a new boat, etc etc. Then the real negotiations started and while the final number was good, it wasn’t great, and i had to give up that new boat! Keep it up.


  • This Blog Will Pay My Mortgage

    August 24, 2008
    at 12:48 pm

    Hi Shane, thank you for the encouraging post. There seems to be more and more people thinking like businessmen when it comes to selling sites. Keep us informed of future projects.


  • Free Business Ideas » Ask Shane.org

    September 15, 2008
    at 3:29 pm

    […] just didn’t buy that, though, because my experience had been completely the opposite.  Since selling my site, I had just been finding opportunity after opportunity.  They were literally […]

  • […] another factor at work too, though.  I just talked with my bankers and found out that they represented Bankaholic’s owner, too.  You can’t overestimate […]

  • […] Lessons from an Acquisition – Ask Shane […]

  • […] after selling my own site to Internet Brands (NASDAQ:INET) and helping countless others with their sales (and in many cases the decision not to […]

  • […] from earning a decent full-time salary to having a very significant online business that I later sold for more money than I would have ever […]

  • […] I sold my first site, I was amazed at the multiple I got. A lot of that was due to the particular timing (early 2008 […]


  • Viviane

    May 21, 2012
    at 1:26 pm

    Hi Shane, I’ve been learning a lot from you. I have some questions if you can help me.

    I’m crazy to work from home and your ideas fits great. But, I never built a site, I don’t have any skills yet. Is it possible for me though? Will it take much longer for people that don’t know how to create a site?

    Do you think if I start now at the end of next year my site will be ready and many soon ready to sell?

    Yeah, it’s all about money. Many of us struggle with that and dream of having money. So how long (least) until the site is all set to be sold and make a great profit?


  • Shane

    May 21, 2012
    at 2:05 pm

    A few sites do explode and get sold for crazy amounts in a year or less, but they’re very few and far between. Especially since you’ve never done this, you’re more likely looking at at least a five-year timeframe. See http://www.RetireInFiveYears.com for a full plan.