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Hosting Discussion > Operating a Web Hosting Business > Web Hosting Business and Legal Issues > Steps to take when purchasing a hosting company?
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  Post #1 (permalink)   06-18-2007, 12:58 PM
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I am noticing a new trend... People would acquire another hosting provider just to find out that ex-owner(s) was/were not in good standing in the business community. Be it forum spamming, other scam operations, old promises not kept, money not refunded, invoices not paid, etc.

Do people not perform any due diligence when buying another business? Is there an extent to which this due diligence can go? (Searching web hosting forums and pulling information off Google can only go so far.) What steps do YOU usually take (or would take) if you purchase another web hosting operator?


  Post #2 (permalink)   06-18-2007, 01:49 PM
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Funny, I was searching DigitalPoint yesterday and I saw that someone was selling 58 clients. I was interested, so I contacted him.

To me it felt like a scam, because he was being very vague with the details. For instance, I asked what his company name was. He refused to give me the name because he said that the "name was sold". A companies name is very important, because I need to know how their reputation was and if they had any reviews. I finally found his company name, by searching his "Threads Started" because he said he sold the name. I saw that he sold the name, so I googled search the name, and couldn't find anything.

He then claimed, he had over 35 clients hosting monthly, so I said can I see a screenshot? He then responded saying, that he does not have a billing system, and that all his clients were on paypal subscription.

Long story, short, I ended up not buying the clients.

I tend to question a lot, when looking to buy hosting clients or a company.
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  Post #3 (permalink)   06-20-2007, 08:28 PM
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Join Date: Jun 2007
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Originally Posted by Artashes
What steps do YOU usually take (or would take) if you purchase another web hosting operator?
I would want to know their stability, length of time in business, number of customers, their churn rate (or how fast they lose customers), # of customers on monthly, quarterly, yearly payment plans, etc.

Since customer service is my personal pet peeve, I'd google them to find out their history on customer service, both good and bad. I might would also check with some of their current customers to see how they like the service.

If they are a host with an exceptional customer service record, I'd have them sign a no-compete agreement.

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