This is a guest post by Martin Gessner, author of the ‘Site Buying Method’ – a guide to understanding the process of researching and buying a website.
One of the great things about buying an online business is that there is a great deal of information that is publicly available. You can do market research on traffic, keywords and competitor sites, as well as information about the site you are considering purchasing. However, there will be a number of pieces of information that you can only get from the seller. These include the details on actual traffic and income.
When the seller provides this information, they will usually provide screenshots. They may even provide an Excel spreadsheet that details the income. Treat screenshots or other documents as good for informational purposes only, not as proof to substantiate their claims. It is too easy to alter and modify screenshots for you to be able to trust them. After you have checked the information in the screenshots, if you are still interested, you then need to try and verify the information.
Here are some options to help you verify the information provided by the seller when buying a website:
A step up from screenshots is a video that the seller makes that shows them logging into their accounts. For example they will log into their Google Analytics to show the traffic, Google AdSense to verify the AdSense income and perhaps their ClickBank or PayPal accounts. This kind of proof is a lot better than screenshots and is a lot harder to fake. However, it is still possible to alter and edit a video so it is not 100% reliable.
Another option is to ask for a live screen sharing session. This allows the seller to demonstrate logging into the various accounts in real time to prove any claims made, as both parties are able to see the one screen. To avoid the problem of the seller setting up a fake Google login page and AdSense site, be sure to request the seller to drill down on a number of areas on their account. While some buyers request the seller to log in to their own computer to further remove any doubt, sellers may be understandable cautious given the security implication (key-stroke-logging anyone?).
Meeting in Person
The lowest risk option is to meet the seller in person and watch as they log into their accounts to show you the traffic and income of the site. I once met a seller in a McDonalds, where he used the wireless connection and his laptop to login to his various accounts and prove the traffic and income claims he had made. Although it is unlikely the seller is based in a location close by, it can happen. If they are based in the same city, it is well worth a trip to meet them and look at everything first hand. If you are buying a website with a hefty purchase price, you may even consider travelling further to meet the seller.
A lot of sites will have some form of AdSense income. There are many sites that are sold as ‘informational’ sites and their only source of income is AdSense. If that is the case, then you need to investigate the claims of income closely. As with all of the different types of information that we ask for from the seller, the more extensive the data obtained the better. Obviously we are going to feel more comfortable if we can see proof of one year’s data versus one month.
There is one problem with verifying AdSense income. When you join the AdSense program, you agree to the AdSense terms and conditions. These include a confidentiality clause that you agree not to disclose click-through rates or other statistics relating to property performance in the program. You are however allowed to disclose the amount of Google’s gross payments.
To comply with the terms and conditions, when a seller provides a screenshot of their AdSense earnings, they need to hide a number of items on the page before they can share it with other people. As well as blurring the performance statistics, it is possible to also alter the earnings amounts. It’s easy to edit a screenshot in Photoshop or with so other photo editing software. So, a screenshot of AdSense earnings is again great for informational purposes, but you cannot rely on it.
Here are a couple of options for verifying Adsense Income:
Adsense Performance Is Integrated Into Google Analytics
It is possible to link Google Analytics and Google AdSense accounts. If the seller has done this, then you can find the overview of AdSense revenue within the Analytics report. You could then use the ‘verified’ Flippa Google Analytics report or request the seller to email the report to you directly. This will give you the AdSense figure for the report period.
Email the AdSense Report
It is possible for the owner of the AdSense account to email a report of AdSense earnings to you. In Google Analytics the seller needs to use the Report Manager functions to send an email report. Many sellers are not aware of this feature, so you need to be familiar with it to explain and direct them to it. Be aware that it is possible to fake even this, as it is possible to alter the ‘from’ address of an email and send an altered report.
Ask them to add your AdSense publisher id to the site for a few days. In this way you are able to see the income in real time. Although instead of adding the id to just the site you are considering purchasing, they could add it to multiple sites that are earning income, giving you the impression that it is all coming from the one site, when in fact it is coming from a number. Also request the seller to share the Google Analytics report for the site and do a sense check of the number of AdSense impressions against the traffic numbers.
Martin created The Site Buying Method to help buyers learn what they need to check before they buy an established online business and website. Interested readers can find out more at www.sitebuyingmethod.com.
How do you validate information in screenshots? Anything about buying a website you do not see covered in Martin’s list? Let us know in the comments below.