What Are The Procedures And Key Points Of Considerations For Website Buying/Selling or Website M&A?

Website M&A, also known as “website mergers and acquisition” refers to the buying and selling of websites and their content. In recent years, business through websites has been stimulated, and the asset value of websites is increasingly being recognized. In this trend, the number of Website M&A cases is on the rise, and its attention is also increasing.

When conducting Website M&A, are there any different procedures or points to note compared to general M&A such as stock transfers and business transfers? In this article, we will explain the procedures and points to note when conducting Website M&A for companies considering Website M&A.

What is Website M&A?

Website M&A refers to the buying and selling of websites owned by individuals or companies. The purpose of conducting Website M&A varies, such as purchasing a high-traffic website to generate revenue, or selling a costly-to-maintain site to focus on other businesses.

Benefits of Website M&A

For the transferor in a Website M&A, the primary benefit is the ability to receive consideration. For individuals or companies operating multiple websites, there are also advantages such as reducing management costs by selling unnecessary websites, and being able to concentrate on other websites or businesses.

For the transferee, benefits include the ability to shorten the time and effort required to grow a website from scratch and increase its revenue. Additionally, by purchasing a website that is already somewhat operational and generating stable revenue, they can also mitigate the risk of failure in website management.

Procedure for Website M&A

Website M&A is conducted by registering on a matching site or requesting an M&A brokerage firm. While it is possible to conduct transactions between individuals, there is a risk of various problems such as breakdown of negotiations or loss of contact, so it is recommended to use a matching site or a brokerage firm. The procedure for using these services is as follows:

When Transferring a Website

1. Register on a matching site and undergo a transfer site review by the matching site
2. Conclude a brokerage contract and a confidentiality agreement
   When requesting a brokerage to an M&A brokerage firm, you will conclude a brokerage contract and a confidentiality agreement with the brokerage firm. When using a matching site, you will conclude a confidentiality agreement with the counterpart company
3. Negotiate with the counterpart
4. Conclude a basic agreement
5. Undergo an audit from the transferee and conclude a business transfer agreement
6. Website transition

When Acquiring a Website

1. Register on a matching site
2. Consider the website to be acquired based on information such as the number of page views
3. Negotiate with the counterpart
4. Conclude a basic agreement
5. Conduct an audit and conclude a business transfer agreement
6. Website transition

When acquiring a website, be sure to check the revenue in detail, whether stable revenue is being generated, and whether it is dependent on a single affiliate project.

Market Price for Website M&A

How much is the market price for websites traded in Website M&A? The price of a website varies depending on its business model and the amount and stability of its revenue, but it is often said that most transactions occur between 500,000 and 1,000,000 yen.

Websites that are traded at higher prices are those that have been generating revenue for a long period of time through affiliate marketing or AdSense. These websites are popular because they require little daily operation and can generate revenue with minimal effort. Furthermore, even if a website is not currently generating much revenue, if it has a high number of visits or page views, it could significantly increase future revenue with just a small effort added, making the number of visits and page views a major point. On the other hand, websites with low revenue or a short operation period are difficult to sell and have a lower market price.

Not only the business model and profitability, but also the SEO measures of the website can affect the price. Among SEO measures, the method of posting a lot of high-quality content that is evaluated by search engines is called “White Hat”, and the price will be higher. Conversely, methods that unfairly raise search rankings, such as posting self-performed links, are called “Black Hat”, and the price will be lower. Search engines regularly update to prevent black hat sites from ranking high in search results, so white hat sites are in high demand.

Points to Note When Conducting Website M&A

Website M&A, due to its nature of buying and selling websites, has different considerations compared to general M&A. It is necessary to proceed the procedures carefully to avoid troubles such as losing access to the website.

While the handover procedures may vary depending on the nature of the website, we will explain the points to be careful about for any type of website.

Domain Transfer

Be careful that if the rights to the domain are not transferred, the domain may become unusable if it is not updated.

Content Transfer

When handing over the content such as images and articles posted on the Website to the transferee, you must pay attention to who owns the ownership and copyright of the content.

If you have asked external photographers or writers to create images or articles, depending on the content of the contract, the ownership and copyright of the content may not have been transferred to the site owner, and the photographer or writer may still hold them. Check the whereabouts of the content rights in the contract, and if the website owner does not have the rights, you must obtain permission to post these contents even after transferring the ownership of the website.

Server Handover or Transfer

You can either take over the existing server or set up a new one. If you take over the existing server, apply for a name change to the server management company. If you want to transfer to another server management company, you can also set up a new server and transfer it.

Handover of Practical Work Related to Website Operation

For practical work to operate the website (such as updates and maintenance), create a manual with as much detail as possible and hand it over to the transferee. Also, if you are outsourcing website operation and article posting to external staff, notify them that the website owner is changing, conclude a change contract or a new contract, etc., and continue the operation.

Summary: Consult Lawyers for Website M&A Procedures

Website M&A has unique considerations separate from regular M&A, and proceeding it individually involves various risks. Advanced expertise in law and internet business is necessary for a successful Website M&A. If you are considering a Website M&A, it is recommended to consult with a lawyer who has handled many such cases.