Internet Business Opportunity Buy/Sell Indicator | Market Equilibrium

Jun 162008

In June of 2007 I wrote that the Internet Business Opportunity Seller’s Market, begun in 2003, had turned to a Buyer’s Market.

I had predicted then that the Buyer’s Market would return to a Seller’s Market in November 2007. I was wrong! I fault my full understanding of the “Subprime Crisis” as the villain. Further, a glut of new Internet Business Opportunities hit the market between September 2007 and January 2008. Creating a continuance of the Buy/Sell Indicator bias in favor of the Buyer.

During the first quarter of 2008 many Internet Business Opportunities initially listed for sale in the second half of 2007 were taken “Off Market“. Those businesses that were SOLD were acquired for well below the Asking Price. There were also several buy/sell transactions accomplished for very low multiples.

For example, a seven year old publishing/directory website that should have sold, even in the worst of times, for a 3.0 multiple of cash flow went for a mere 0.7 multiple of cash flow. The owner was retiring and did not want to wait for the market to return.

Keep in mind in this case that the owner “liked” the buyer and felt the buyer would keep his long standing website growing into the future. It is the answer to question #1 that all buyers should be asking of their target Internet Business Opportunity.

In April of 2008 the number of new Internet Business Opportunity listings fell dramatically. By early May the Buy/Sell indicators had turned neutral. In other words, we have reached “Market Equilibrium”.

Meaning sale prices will stabilize, buyers will find it more difficult to negotiate better terms, and the average length of time on market for a seller will return to the traditional seven months.

Internet Business Guide

Internet Business Opportunity Buy/Sell Indicator | Market Equilibrium

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