

Retweet.com sold for $250k on Flippa - ccarpenterg
http://flippa.com/auctions/85167/bids

======
pclark
Lets think logically.

Retweet.com is a site that is famous for stealing code from its competitors
[1]

They claim to have millions of visitors. They clearly don't. At best they
could claim this traffic on compete.com if their retweet widget had _massive_
distribution, like the successful original Tweetmeme - except Retweet.com
doesn't. Have you _ever_ seen their button in use?

So we know that Retweet has a "shady" code base, we can be pretty certain
their traffic is false. Their popular url shortner?
<http://search.twitter.com/search?q=RT.nu> compare that to any of the popular
services. Not so much.

They had a contest for visitors when the site launched. They never hit the 1M
or whatever unique users, not even close.

Guys, this company can't even spell "All Rights Reserved" correctly - "All
Rights _Reservered_ " A simple google search would come up with the amount of
ridiciulous-ness this company has created.

But it has a bid! So it must be true. Except all you need is a verified phone
number to bid. Yeah.

$250K. Honestly.

[1] <http://www.techmeme.com/090727/p56#a090727p56>

~~~
grellas
Your very insightful comment highlights the broader problems with trying to
buy or sell a website via public bid.

A website (or at least one normally worth buying at all) is a going business
and not a mere item of tangible property.

When you buy an item of tangible property (say, a car), you have expectations
that the item will be delivered to you as described. You will be concerned
that it will be in the condition represented and that it will be the make,
model, and year advertised. For the most part, that is it.

The issues are far more complex when it comes to selling a going business,
including one that takes the form of a website.

Here are just a few of the issues that might arise:

1\. All sorts of people might have rights to the IP underlying the website and
its development, and to the business concepts underlying it. In a bona fide
sale of such an asset, the buyer will want to conduct due diligence to ensure
that all such rights belong to the selling company and are properly
transferred to the buyer in the sale. An auction sale of this type affords no
opportunity to do such due diligence.

2\. The IP rights connected with a website also can create liabilities. For
example, suppose a company doing a SAAS business has been accused of violating
some IP rights of another company, whether patent, trademark, copyright, or
trade secrets (for example, if someone claims that a renegade ex-employee
stole code and used it to start an illegitimate site - this, for example, is
what a former doctor and clinician at the Mayo Clinic is accused of trying to
do with respect to software that helps with insurance billing and disease
tracking, see
[http://www.law.com/jsp/article.jsp?id=1202445949066&Mayo...](http://www.law.com/jsp/article.jsp?id=1202445949066&Mayo_Clinic_and_Doctor_Disagree_Over_Who_Stole_Software_Secrets)).
This type of issue is handled in a bona fide sale by having the selling entity
(and the seller's principals) give warranties and representations attesting
that no such claims exist and that they have no reason to believe that any
problems of this type exist, and this is coupled again with due diligence to
examine the records of the selling entity to ensure that this is so. Again,
with an auction of this type, a buyer has no chance to protect itself on such
points.

3\. If a selling entity is swamped with liabilities that far exceed its
assets, and fails to pay its payroll taxes, sales taxes, etc., a buyer who
acquires the assets of such an entity as a going concern will often have what
the law calls "successor liability" - meaning that, you might think you are
buying a mere website but you might wake up to find that you also "bought"
potentially hundreds of thousands of dollars of unpaid tax liabilities
formerly owed by the seller alone but now owed by both seller and buyer.

4\. One of the critical factors in any bona fide sale is for a buyer to
examine and approve the financial statements of the seller. A website business
will have associated financials reflecting a track record of some kind. In
less conventional situations, such as retweet.com, the seller may admit not to
have monetized its website but, even then, there will always be something of
value that needs to be verified to ensure that what the buyer is buying is
what the buyer thinks it is buying. Is it the volume of daily traffic? Is it
some other metric of value in the social networking world? In such cases, in a
bona fide deal, the buyer goes through the records to verify what is or is not
the case and, further, requires the seller (and its principals) to warrant
that their claims in writing.

5\. Even if there are no hidden liabilities, the parties to a bona fide sale
will always negotiate such things as whether a buyer is expressly assuming
certain liabilities or not, and these are spelled out in advance prior to a
closing. Not all liabilities are bad in this sense. Maybe there is a long-term
arrangement for data storage with a third-party vendor. This would naturally
be assumed to be transferred to the buyer in connection with a purchase. But
what if a website has many such items and the parties are not clear on what
liability is or is not to be assumed by the buyer. If the deal is silent on
the point, as it would be in the case of an online auction, then the
liabilities likely would remain with the seller if a buyer refused to assume
them.

6\. In a bona fide sale, if a seller sells a business based on fraudulent
misrepresentations, the seller is potentially liable for the damages stemming
from the fraud or may be forced to give back the buyer's money if a judgment
of rescission is entered against that seller owing to the fraud. In the real
world, however, this remedy is meaningless if the seller is itself a mere
shell with no assets. That is why, in a bona fide sale, a buyer will want in
all such cases to make sure that the principals behind that shell are
individually on the hook for any fraudulent misrepresentations, and every
asset sale worth its salt will therefore have significant deal terms connected
with who makes what warranties and how much this exposes them to potential
liability. With an online auction, on the other hand, the "seller" might be
some worthless entity that will be judgment-proof when it comes time for a
defrauded buyer to attempt to gets its money back.

7\. Almost all bona fide sales will have "conditions to closing," meaning that
the deal will be set to close, and will close, once everything has been
properly positioned and not otherwise. For example, if the seller has key
contracts that are not transferable without a third party's consent, the sales
agreement will typically specify that the deal will close if and only if the
needed consent is obtained. If it can't be obtained, and if it is critical,
then the parties can walk away from the deal. With the online auction, the
format does not even take such basic items into account.

8\. This is not even to mention the major strategic factors that go into an
acquisition, i.e., whether it is best structured as a stock sale, an asset
sale, or a merger and whether it should be done tax-free or otherwise. None of
these factors are even remotely considered in an online auction.

I could go on and on, but I'm sure this is already much too long as it is.

The essential point is this: to me, the flippa.com approach to buying websites
appears to be trying to simplify a sales process that is inherently too
complex to be simplified in this manner. Maybe I am missing something, but the
terms of use at the Flippa site seemed to provide, in highly simplistic terms,
e.g., that a seller commits to sell and a buyer commits to buy but without
specifying more about the structure and terms of any given deal. I think this
misses the mark for the sale of any even remotely sophisticated website unless
a buyer is willing to fly blind in making the purchase.

All of which raises a broader question - what does this type of online auction
site aim to achieve? Is it a place for desperate sellers to sell to naive
buyers? Is it aimed to facilitate honest deals but only very simple ones? Is
it aimed to provide a "finder" function by which companies can let it be known
that they are available for sale even though the true sale would only occur by
a more conventional means following the auction itself?

Looking at flippa.com, it is hard for me to see what makes sense as a business
model for this type of auction format given the legal issues involved.

~~~
pavs
I sold a site at sitepoint (before they moved to flippa domain last year) for
25k. I set up the auction at night, went to sleep, woke up next morning with
several bids and many PMs. Several of them offered me more than my BIN price.
The site was sold is less than 24 hours. My investment: ~$25 to setup the
auction.

Just a wordpress blog.

I think they changed some of the terms since moving to flippa and it is still
ridiculously easy to sell a site through flippa.

Looking at this auction, I have my doubts. Something is not right. It is also
possible that the buyer is an idiot with extra cash lying around.

------
rwhitman
The sale of Retweet was heavily publicized in all the major tech blogs.

Why are people skeptical about the final bid price? They played the press
right and skewed the value, resulting in a bidding war. When there's an
artificially perceived value who's to say someone's going to make a rational
purchase decision?

For all you know the new owner could be the teenage son of a Russian oil
magnate, who's dad bought it for his kid's birthday after he read about it on
Mashable. Cheaper than a Ferrari

------
DanBlake
I wouldn't be surprised if its fake because Kevin and crew likely didn't want
to admit failure, so put in a fake bid looking like they had a "win". Lets
watch and see if the domain details change (hosting/ip/etc.)

Mesiab labs ( the company that owned/owns retweet ) also runs hummingbird, the
#1 twitter spam tool so dont congratulate them too quickly.

More information about how shady these guys are here :
<http://techcrunch.com/2010/02/17/retweet-com-for-sale/>

One final note: Even if the purchase is real- The buyer is going to be very
disappointed when he finds out that 95% of the claimed traffic is from the
iframed retweet buttons and not run-on-site traffic. For a semi accurate
analysis of the traffic, just look at alexa (which doesnt count iframes) - It
barely registers

~~~
ryanwaggoner
This would be really, really stupid, since they had bids over $200k and they
would have had to pay $500 to win their own listing. Seems unlikely.

~~~
pclark
dude, seriously. I just registered and bided on a random site. You don't have
to pay $500 to bid, and there is no proof that the $250K was paid.

~~~
unperson
$500 is not for bidding, but for the listing fee and the "Success Fee"
(commission). The creator of the auction pays this amount; if that happens to
be the same as the winner of the auction, then they lose this amount.

------
whereareyou
If this is real, I dont think retweet, the website, has anything to do with
the purchase price. It's all about retweet.com, the domain.

------
blantonl
I'm a little confused here. The title indicates the site _sold_ for $250k
however the bidding still has ~2 hours left?

Is the headline incorrect, was the auction extended, or am I missing
something?

~~~
btipling
There is a "Buy It Now Option" which won it. The headline is incorrect.

------
pclark
I highly doubt the purchase price is real.

~~~
ryanwaggoner
I highly doubt this is fake. Did you read through the listing and the comments
from the seller?

<http://flippa.com/auctions/85167/Retweet-com>

Also, Flippa verified that the seller had access to the site. Now, you might
argue that the bidder will fail to pay up, but I don't think this is "fake".

~~~
pclark
obviously the buyer is fake. You really think someone would pay $250K for
retweet.com? Why? Dear lord man.

~~~
ryanwaggoner
Actually, I doubt the buyer is fake, and I _really_ doubt that all the bids
leading up to $200k were fake. $250k is not a tremendous sum of money for a
site with this kind of traffic, traction, and with so many blogs and sites all
over the web using it. I wouldn't buy it, but I have no trouble believing that
someone who knew what they were doing could easily make a good return on that
$250k.

------
clistctrl
I've perused the listings of flippa a few times. Its usually 90% affiliate
marketing (really badly done) if this is real its a huge win for Flippa.

On an unrelated note, I was once amused when a lady posted her health related
blog (It made about $100 a month or something) for $65k. When people corrected
her saying oh you mean $650 she was a little more then offended.

~~~
blantonl
with this in mind clistctrl, I'm curious as to what other (or more
"trustworthy") online marketplaces exist for listing a Web site for sale. And,
when are they the best route to take, and if not, what other routes should
folks take?

I own a couple domains, well, online businesses, that generate some fairly
significant revenue - not affiliate marketing, not buy-my-ebook stuff, but
real freemium subscription businesses that are content oriented and have
highly specific demographics. No, no porn either :)

