Be Your Own Buyout Firm

Apparently the old adage "one man's trash is another man's treasure" applies to business plans, too. USA Today reports that the latest online auction trend is to buy and sell dot-com companies on eBay.

"Troubled internet companies" are closing deals of upwards of $200,000 for their failed businesses, selling to buyers who presumably believe it would be cheaper to turn these web properties around than start from scratch.

Sound familiar? It's not unlike the runaway buyout market writ small, in that it's hard to grasp how buyers see the value that justifies the price. Unlike a traditional "brick and mortar" business -- a bold enough "sight unseen" online purchase to some of us -- the assets underlying Web 2.0 companies are all the more nebulous: Intellectual property (a trademarked name, a domain, possibly software programming code) and a failed business plan.

These resources are hard to value, hard to monetize, and hard to repurpose, too. A visionary entrepreneur might turn an old warehouse into loft housing, but programming code as a fixer-upper? Maybe not such a good idea. Even if the seller has lots of "positive feedback" on eBay.

by Liz Gunnison