Technology &
Internet Law

How To Buy An Internet Business

What are you acquiring?

Before deciding to proceed to buy an internet business, you need to look at what is an internet business comprised of. Is it:

1. The website address (“URL”)?

2. The content of the website?

3. The underlying goods and services provided by the business (generating customers)?

What is it you really want?

What is it that interests you about the internet business you are looking at?

1. The traffic? Then your easiest way forward might be to set up the appropriate links between the internet business you are looking at and your own rather than buying the business. You should also enter into an agreement dealing with what payments you will need to make for aggregating the traffic of the site you are looking at to your own.

2. The content? Consider instead some form of licensing agreement allowing you to use the content you are interested in, on your own site.

3. The underlying goods and services of the business? You may want to look at becoming an agent, franchisee or partner of the site you are looking at.

Asset or share purchase?

If, having considered these options, your objectives are still best served by acquiring the internet business, then you are either looking at a share purchase or asset purchase of the underlying business as a whole. Acquiring an internet business is much like the acquisition of any other business, but you might want to ensure:

(a) you examine and acquire the code, the URL, the content and any customer database used in the business as part of the deal;

(b) you are able to carry out acceptance testing before you buy;

(c) the website works on or with all relevant platforms, gateways and plug-ins;

(d) you can verify any key figures driving your desire to purchase (such as quoted unique visitor statistics or members of any newsletter run by the site);

(e) (where you are acquiring an existing customer database) you have the full right to use the database under relevant data protection legislation to achieve what you want with that database.

Tax & fiscal impications

Finally, please ensure you get an accountant to advise on the fiscal and tax aspects of acquiring the business, especially if it is located outside the UK .

NEED TO KNOW MORE?

For further information contact Julian Danobeitia.  Should you prefer to telephone, call us on +44 (0)207 278 1817.

Kaltons Solicitors, Suite 302, Spitfire Studios, 63-71 Collier Street, London, N1 9BE. Telephone +44 (0)20 7278 1817; Fax: +44 (0)207 278 1835.

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