Hey guys, I have a quick question concerning a recent website that I sold. Basically, it was a decent-sized sale of a content-based website that earned money through advertisements. A week or two after the sale, the buyer asked me to pay for the advertisements currently running on the site (from private advertiser sales - banners/links). Eg. if one ad I sold for $100 ran between July 10th till August 10th, and I sold the site itself on July 25th, I will need to pay the buyer the equivalent amount the ad is online after the sale till it expires, between July 25th - August 10th. So, I need to pay $50 to the buyer for that particular ad. Anyways, although I really don't mind too much, this is the first time I've been asked to do something like this, and the amount is beyond pocket change at $1.5k+. What do you think? Am I required to pay this legally? Should I pay this under business ethics? Thanks!
Legally and ethically you would only be required to pay these amounts if they were agreed to in the sales agreement PRIOR to the sale. I am not a lawyer but as a CPA I need to know basic business law. Tom
What TomR said is correct, however what you're saying is that you are paying to ensure the ad placement (as part of your sale agreement, presumingly). However, I might have misunderstood entirely what you are trying to say. If you don't pay this $50 and it results in your sale contract being broken, then I would simply pay the $50. However, if it doesn't then you don't really have anything to worry about. Have you discussed the situation with the buyer himself?
You need to pay the buyer since now he own the site. Which mean that the new owner own all the kind of ads revenue generate from the site.
Both yes and no. If you look at it from a business ethics point of view, then yes, you should pay him. The ad paid for the full month, you guys need to split profits for that month. If you look at it from a business making money point of view, then no, you do not need to pay him. You found a way to make the site profitable, thats how you sold it. It is up to him now to continue to make money off that site. You sold him the site, the content, and showed that its profitable, that doesn't mean you should give him any of your profits. It is up to him to manage the site and keep it profitable.
I dont think you are required to do so unless it was agreed upon. Either way I would just fork it over to stay on good terms as its not that much money.
Sounds good - thanks for the responses . I've gone ahead and exchanged a few emails with the buyer. We've worked something out that works for both of us. Thanks! Donny