Buying and Selling Seasonal Website Businesses
What is a seasonal website business? This is a website business whose revenues fluctuate with the four seasons.
As such, when you’re buying or selling a seasonal website business, you must analyse the website’s traffic and financials in a slightly different way than you would a regular website business. The primary reason is that the revenues do not trend in a stable fashion month-to-month.
Website buyers must be aware of this notable difference when acquiring seasonal websites. And website sellers must present the website’s data in a format that is easy for website buyers to analyse and understand.
Examples of Seasonal Website Businesses:
1. Game portals
Game portals are websites that compile online games that visitors can play for free. These websites generate revenues primarily through online advertising. These revenues come from in-game advertising, banner advertising, and other PPC revenue streams.
Visitors to these game portals play the games for free. These users are generally younger visitors between the ages of 18 and 30 years old. In colder weather, more users stay indoors and play games online. In warmer weather, fewer users play games online.
For these reasons, game portal revenues tend to decline during the summer months compared to, say, winter months.
2. Travel Websites
Most travel websites are seasonal website businesses. Certain travel destinations are more popular during certain months of the year. Leading up to these months and during these months, these websites receive significantly higher traffic than the rest of the year.
Therefore, these travel websites receive higher revenues during those specific high-traffic months.
3. Seasonal Product Websites
Certain e-commerce businesses sell products that are used during a specific time of year. Examples include websites that sell air conditioners. These websites do a significant portion of their business during the summer months.
We recently raised $1 million in financing for an online furniture retailer. Even though this business may not seem like a seasonal website business on the surface, there was a definite trend in seasonality in customer purchases.
Of course, when the retailer offered bargain sales, revenues increased. These were often offered during Black Friday and Cyber Monday sales. But, unlike most other retail products, people tend not to buy furniture during the Christmas period.
Furniture is bulky and relatively expensive and thus not convenient to give away as Christmas gifts to family and friends. During the Christmas period, this e-commerce business’ revenues decreased.
How to Analyse Seasonal Website Businesses
When analysing seasonal website businesses it is not a good idea to focus on the revenue levels from one month to the next. It is much better to analyse similar months in consecutive years. For example, you should analyse January 2014 to January 2015 numbers.
In this way, you can see clearly whether the financials and traffic numbers have increased or decreased during the exact same month in each year. Thus, you can analyse the seasonality of this website business.
Ideal Website Buyers for Seasonal Website Businesses
A seasonal website business can be a generalist website or a specialist website. As such, they attract a wide variety of website buyers.
Some websites like game portals require specialized knowledge in this niche in order to successfully operate the portal. On the other hand, travel information websites can generally be managed by anyone willing to invest the time in creating travel articles or outsourcing this task to professional writers.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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