Market for Selling Internet Based Companies and Websites Keeps on Growing

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With an estimated 223 million websites (source: Netcraft 2009) and many billions of dollars of revenue generated online, the internet is a prime location for conducting business. It is probably no surprise that the market for buying or selling internet based companies has been growing fast during the last years. Specialized internet business brokers are involved in most of the deals of significant size.

The value of a website is determined by many intangible assets.

Since the start of the internet era in the early nineties the number of online businesses and transactions has exploded. The market for websites started to grow in early 2000, when the first business owners started to sell their businesses. Since then the number of websites being offered for sale has exploded. The current economic situation reduced the availability of funds to finance a business acquisition. Compared to brick-and-mortar business however, still many websites change ownership. Unlike potential buyers of a brick-and-mortar business potential buyers of websites are not limited by geographic location. “This basically creates a very large market place of potential buyers and sellers”, says Ed Vandekrol, senior broker with Borchino, an internet business broker.

Like regular brick-and-mortar businesses, website owners sell their business themselves or use a business broker to assist them. Specialized internet business brokers have specific knowledge about selling internet based companies. For instance on establishing the value of a website, which can be quite different from a brick-and-mortar business. The value of a website is determined by many intangible assets, including items such as page ranking, organic traffic, year of establishment, customer relations and domain name. Of course traditional aspects like business model, revenue and cash flow continue to be important factors in determining the value of a website.

Should a business owner always use a business broker? It depends. The most important factors are the size of the business and the potential size of the deal. Any business with more than US$100,000 in revenue should always work with a professional business broker. According to Ed VandeKrol, “internet business brokers have access to a large network of buyers. This will increase the number of offers and more offers often times result in a better deal for the seller.”

For more information you can visit the website of Borchino internet business brokers, http://www.borchino.com.

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