I Sold My Largest Money Making Website

March 21, 2011 Posted by Tyler Cruz
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A couple of weeks ago, I sold my largest money maker, PokerForums.org.

I haven’t blogged about it until now as I didn’t want to publicly declare anything until the escrow was received in my bank account and the site was fully transferred to the new owner.

The selling of this site is a major event in my life as an internet entrepreneur. Not only does it mark the single largest transaction I’ve ever received, but rather, and more importantly, it represents a major shift in the evolution of Merendi Networks Inc, my corporation.

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A Brief History of PokerForums.org

Many years ago, I was an active member of a Starcraft forum. Some of the members started getting into online poker, which in turn got me interested as well.

There started to be a lot of new poker discussion bubbling on the forums, but we were limited to one single thread to discuss everything related to poker. This made sense, considering it was, after all, a Starcraft forum, but there were a lot of us who were really interested in discussing the topic.

And so, on 17th Apr, 2004, I made PokerForums.org. Its genesis was made purely out of the desire to create a forum completely dedicated to poker. I told some of the other members on the Starcraft forum, and a bunch of them immediately (and happily) joined.

This was all just prior to the huge poker boom that occurred due to the World Poker Tour and Chris Moneymaker winning the WSOP from a freeroll. PokerForums.org, almost entirely due to its domain name, consistently ranked in the top 3 (usually #1) for the term “poker forums”, which helped to drive new traffic to the site.

The online poker boom was so fierce that advertisers were contacting me left and right to advertise on the site. In 2005, just one year after creating the site, PFO already made 10x more than it did the year before. In 2006, it made 3x what it made in 2005, which is more than most people make full-time.

Life was good.

Then, on September 30th, 2006, the republicans sneakily snuck an “anti-online gambling’” section into the port security bill, known as the Unlawful Internet Gambling Enforcement Act, or UIGEA. Two weeks later, George Bush signed the Act into law.

What followed was immediate turmoil. PartyPoker.com, which was the largest online poker site at the time, had its publicly-traded stock drop almost 60% in 24 hours as a result of this bill being passed.

A couple days after the bill was announced, one advertiser, who was paying me $4,500 in ads each month, cancelled their campaign. That was the biggest immediate effect I felt from UIGEA, and it sucked. That was $54,000 a year lost right then and there.

Not too long after, online e-Wallets such as Neteller refused to allow online poker-related transactions. Credit card companies banned the use of online gambling-related transactions as well. This made it very difficult for people to deposit online, which in turn meant less advertising dollars for me.

At the time, I wasn’t worried. I saw so much demand from advertisers that I just couldn’t see how it would affect me dramatically. In turns out that I was mostly correct, as the site’s income didn’t see a dramatic drop until 2009.

However, I actually believe that was not so much due to the UIGEA as it was for the following two reasons:

1. I became too busy with other projects.

Out of concern for having all my eggs in one basket, I decided early on once I started making good money online that I wanted to diversify my portfolio in case one of my sites quickly died.

While I still believe this to be a good business move, what I didn’t see myself getting into was going overboard with this mentality. I kept making more and more websites. I was using the shotgun approach – making and buying a bunch of websites, with the hope that one in a dozen takes off.

Having so many projects eventually caught up to me and wore me down to the point where I was completely neglecting some of my sites, PFO being one of them.

2. My interest in poker waned.

While I was very interested in poker for a long time, playing in private home games, multi-tabling 24 tables at once online, reading books, and watching TV, my passion slowly diminished over the years. By 2009, I had already stopped playing poker altogether.

I do not like to work on projects that I am not passionate about (unless it bring in good coin, then I’ll be passionate about anything).

The Sale

And so a year ago I decided to put it up for auction on Flippa. I ended up listed it three times, with no sale going through. I had received a number of private offers, but I turned them all down as I was looking to get more for the site.

I actually received a higher offer at that time from the person who ended up buying it a couple of weeks ago. I ended up selling it to him for less, a year later, as the site’s income dropped dramatically, making only half of what it did the year before.

He had contacted me after the 3rd listing on Flippa ended with an offer, and after some back and forth negotiating, we agreed on a price.

I spent an entire day considering whether or not to accept what I felt was his final offer, and made my decision to accept the following day after “sleeping on it”.

The price I received was lower than I had wanted, but when you look at the income the site was making right before I sold it, it was actually a good decision to sell.

At the same time, it was a fair price to the buyer. He already owns a large poker website and is familiar with the industry. He is also still passionate about poker and doesn’t have as many sites as I do to bog him down.

Part of the sales agreement was that I couldn’t publicly disclose the exact amount of the transaction, since I know that pretty much every one of you are dying to know. I’ll just say that it was definitely not a fortune, but at the same time, based on the last 3 months income prior to sale, it would take me 30 years to make that amount from the site (assuming income stayed at that same level).

That particular fact is what ultimately lead me to accept his offer.

PFO does have potential though, which is why I originally wanted a higher price for it. I had made $220,000 from the site during my ownership of it, and the income dropped mainly due to my complete and blatant neglect of the site.

Right before selling, I had commissioned for a complete redesign of the site and had big improvements in line, including upgrading and converting the site to vBulletin Suite, allowing our members to have their own blogs, etc. I passed this onto the new owner and he is going to continue with that route, so I think he will do well. I certainly wish him the best of luck.

It was just time for me to let the site go and let somebody else take care of it.

The Future

So now I have a lot of extra cash in my pocket, and I bet a lot of you are wondering what I’m going to do with it.

Can you say, “Mercedes-Benz”?

Just kidding.

Obviously the absence of PFO will now create a void in my monthly income, so I can’t just go out and spend the money on candy. And after taxes and the exchange rate, it’s really not all that much.

No, my plans are to reinvest that money into purchasing a new website. I know that I wrote above that one of my mistakes was having too many projects (websites), but I also wrote that I started to lose my passion as well. If I find a new website that interests me, it should help compensate for the fact of replacing the site.

I’ve been looking on Flippa nearly everyday, looking for a nice site to buy. Unfortunately, 99% of the listings there are complete crap (literally… around 99%. I’ll see maybe 1 in 100 listings that look half decent).

There is one listing there currently that I’m interested in, and might possibly purchase if the price is right.

Other than being on the lookout for a nice established site to come on the market and acquire, I’m thinking about using a bit of the sales cash to put towards my mortgage. However, my new mortgage interest rate, which I renewed just 1 month ago, is very low, so it may be smarter for me to use that money to invest online instead.

Anyhow, goodbye PokerForums.org. You’ve certainly served me well.

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Posted: March 21st, 2011 under My Websites  

50 Responses to “I Sold My Largest Money Making Website”

  1. Ryan says:

    These are the posts I love! Congrats Tyler!

  2. Dave Starr says:

    I figured this was coming a few weeks back when I read about you expecting a large payment in US Dollars.

    I know it’s bittersweet, but you really and truly did the right thing … when the spark is gone you can’t build a fire, and what separates a successful poker site from an ‘also ran’ is the fire.

    You want an idea to get fired up about? Solving the business problems of beig an online entrepreneur.

    The continual exchange rate problems (, the differing laws and advice on incorporation, smart (but still honest) ways to deal with taxes.

    How to outsource without breaking the laws of the country you outsource from (hint, a LOT of foreign bloggers can be sued by the government of the Philippines and it just might happen, becuase ‘fast buck’ artists sell services without caring about the law, but end-users will be forced to care …

    wow, I could go on, as you know I can, but play from your strengths. You are one of the smartest entrepreneurs online I know iof regarding business decisions … most people making money just let it happen … capitalize on that strength is my suggestion. Godspeed.

  3. jpassmore says:

    Ah I was waiting for you to post on this. I was looking at PFO last week sometime and happened to notice the post informing your members of the website’s sale. While it probably did sting to sell a site you owned for so long and built up, I think you have other good opportunities.

    You’ve mentioned throughout your blog usually having 3 large websites. Well you’re working more on growing your blog and movie-vault, and I really like the concept of publisher challenge, and I hope you can revive that. Three solid sites right there, plus hopefully you finish up Robot Warz and it does something for you.

    Best of luck Tyler, I’m looking forward to reading your next update!

  4. It ain’t easy selling a site you built from the ground up, but sometimes it’s the right choice.

  5. Congrats on the sale and good luck on your search for a new site. Keep us updated.

  6. mr brain says:

    Wow, 30 years ? this is the biggest offer i have ever heard, normally they will pay you 1-3 years of your current earning, the most i have ever heard is 10 years, and you manage to take a deal for 30 years , you are really good at negotiation, i need to learn from you, you the man

    • Sigh says:

      What he’s effectively saying is that his inability get excited about doing anything other than lift pie to his mouth led to PokerForums dwindling down to the point it was effectively making nothing in advertising.

      Any deal that pays him 30x what the site is on track to pull in on an annual basis only makes sense if the deal is basically pricing in that income as zero, so he’s basically just selling the domain name.

  7. Congrats on the sale Tyler. Thanks for sharing your story with us. :)

  8. I have sites that don’t make nearly that much – and thinking of selling them – even though I have lost interest and time – is always tough. Congrats on the sale and businesslike thought process!

  9. Congrats on the sale Tyler. Sometimes you have to let things go and start fresh :) Keep us updated on what you might buy :)

  10. Guys Gab says:

    I know the feeling Tyler. I’ve been going through a similar situation for the past 3-4 months, but ultimately I turned down their offer (even though at current levels it would take me roughly 24 months to make that money back).

    I thought I had moved on, but the passion I have for that site just wouldn’t go away, and I knew I would regret it if I sold out. It sounds like you were done with PFO, so I guess you made the right choice.

    Good luck with the next venture!

  11. Ricky says:

    Slow down cowboy!!! Don´t go to flippa just looking for something to buy. That´s a huge mistake. Why not invest a low amount of money into the development of a new site? If you have no ideas on that simply wait a few months….you´ll come across something.

  12. Kate Kutny says:

    Congrats on selling your website. That is awesome! Thanks for sharing your story with me. I wish you luck on building another great profitable website :) I know you can do it. Your a very smart guy!

  13. george says:

    This is an inspiring post. Well done on the sale

    I have to agree with you on Flippa. Lot’s of white noise sites there

    Not many decent sites to go after

  14. haha says:

    If that guy spent more than 10,000$ for that site hes a sucker. That site has been a sinking ship for over 2 years.

    • George says:

      PokerForums.org was sinking ship for 2 years, the post quality, count, member count, and more declined to a point that in a web design standard, is completely useless. It needs a redesign, clearing of all posts, and starting over from scratch. Getting the spam and bullshit alone off of the site would take MONTHS! Good job getting an idiot to pay you way too much. I hope he’s financially secure otherwise he’ll be fucked soon.

      Well done dumping the site.

  15. Jasmine says:

    Way to go Tyler. I am sure you have sold the site at a really good price. :)

  16. Congratulation on the sale Tyler. I think with your experiences you can build more website and more profitable with the the cash on your hand right now.

  17. Brad says:

    Congratz dude! you can now move forward fast! and build even bigger projects!

  18. Jacob says:

    If you sold it for a decent price, kudos. It was a dying site that you were never going to do anything with. As for the person who bought it, I think they scored big. I hate when people talk about how a site has been declining, so it has no value. If the person is already a reputable source in the poker industry, they can easily turn the site around and make it a success. So, I think the buyer definitely did do well (so long as they didn’t spend a shit ton of money).

  19. Fazal Mayar says:

    Congrats on the sell, thats a lot of money right there but you created a good site and put in the efforts, so you deserve it to be sold!

  20. Congrats on the sale now its on to bigger and brighter things!

  21. tyler,

    not sure whether to congratulate you or feel bad that you gave up that income. Either way, it sounds like you are going to be fine and made the right decision so I guess it is congrats.

    i have sold a site on flippa as well and agree that most is garbage. keep looking because every once in a while a gem pops up.

    when one door closes, another opens.

    brandon

  22. John says:

    A lot has been changing legislatively in the US for online poker. There are currently a handful of States that are working towards legalizing. There is also significant effort to legalize at the federal level as well. Could be that the site will turn into a major money maker again in the not too distant future.

    • Paul B says:

      Yeah Pokerstars are making headway in this, even hiring key ex government staff. I can’t understand why Tyler ever went down the route of selling advertising when he could have been running affiliate offers and taking a % for ever more.

      I bought a poker site towards the end of last summer and even with 80 active referrals it’s more than paid for itself.

    • Tyler Cruz says:

      Yeah, things are picking up in getting it back in legislation again, but the process is so slow that even if it does become “legalized”, it wouldn’t be for a couple years, in my opinion.

      It was a bit of a gamble though, one I was willing to take. It’s also a gamble for the new owner.

      It also doesn’t change the fact that my interest in poker waned over the years.

    • Too bad Tyler’s interest in poker isn’t the same, if I recall correctly he wasn’t a bad player at all.

  23. paul says:

    congrats, sounds like it was a good move for you.

  24. Congrats of the sale Tyler, now to get even bigger and better!

  25. Congrats on the sale, now on to bigger and better things!

  26. Cash37 says:

    Congrats. Much success.

    BTW get an account to help you figure out that exchange rate issue!

  27. I just love success stories, and here’s another one inspiring me.

  28. Ashish Patel says:

    congrats on the sale tyler.. :) thanks for sharing the success story.

  29. Sunfrog says:

    Make a website like Farmville except that it teaches real backyard farming. Make it be about permaculture and you’ll save the world while getting rich.

    Make a NoGrub for webtrepeneurs. You type in what kind of websites you own and it displays a list of affiliate offers you can run.

    Make a library website. It works exactly like a library except it’s Kindle and if the government wants to censor it easily, it can’t because you made it censor proof.

    Make an eBay that doesn’t suck.

  30. That was a very insightful read, Tyler. I know what you mean, sometimes it’s time to try something new. I’m sure it must be bittersweet as you ‘raised’ it and now it’s flown away, but you can use the profits from this to build something even greater. Good luck to you for that.

  31. Well looks like you made a pretty penny so congrats.

  32. imkazu says:

    congrats on the sale, re-invest ! :)

  33. Akhilesh says:

    “I do not like to work on projects that I am not passionate about (unless it bring in good coin, then I’ll be passionate about anything).”

    I like your approach. Always a true marketer no matter what :)

  34. DJ Sophia says:

    PokerForums is an owesum forum…i hope that new admin will continue it in a nice way…..

  35. [...] were created around 2004-2005 mainly as a direct result from the success of my poker forum (which I sold a number of weeks back). I loved the idea of having users create their own [...]

  36. Wah Pedals says:

    Congratulation for the sale. That’s a really nice forum. Building a good forum takes a lot of time and effort. I imagine it wasn’t easy to say goodbye

  37. Congratulations> it would be better though if you told us the amount you sell but as you agreed not to tell it, it’s fine.
    Well Done again

  38. Congratulations on the sale. I hope it is not coming too late. If you plan to buy another website then make sure you can manage all the ones you have at the moment because it can be quite difficult. All the best!

  39. [...] were created around 2004-2005 mainly as a direct result from the success of my poker forum (which I sold a number of weeks back). I loved the idea of having users create their own [...]

  40. Hello Tyler, congratulations your by negotiation!

    I liked a lot of your post, it is really motivator! I hadn’t thought this type of negociation!
    I thought this happened only whith the Dotcoms, but you opened my mind for a reality a lot different.

    Thank you by to share this experience!

PeerFly

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