Think about your Facebook business page for a second. Yes, it’s free to set up and free to verify. But if you invest, say, a couple of hundred dollars a month into your page (whether it be for content, advertising, promotions, hiring a digital agency, etc.) over time those investments can really add up. We’re talking thousands, sometimes tens-of-thousands of dollars here.
Or think about your company’s website. Chances are, in one way or another, you’ll be paying to have your website built. Then there’s the issue of domain names. If you’re lucky, when you start a new company your domain name will be available, and all you’ll have to do is purchase it and pay an annual subscription fee.
That isn’t always the case.
A lot of times a new business owner will be buying a company from someone else and things don’t go so smoothly. We’ve seen domain names ransomed for over $5,000 by the previous owner of a business — the month after the business was sold!
When you look at Facebook business pages and company websites from that angle, it’s easy to see why they should be considered assets. The type of assets that are worthy of special consideration during a business purchase negotiation.
Unfortunately, a high percentage of our new clients who have recently purchased a business are involved in legal disputes with the previous owners over Facebook business pages, company websites, or other online assets. Tangling in legal disputes over social media accounts and company websites is not how these new business owners imagined spending their time!
If you want to avoid this happening to you and your business, here are the three online assets your business purchase agreement should cover:
Ownership of social media accounts is handled in two different ways by social media sites:
The first way is a simple username or email address and a password. To transfer these types of accounts, you need to acquire the username and password, change all recovery and verification methods associated with the account (including the email address the account is registered under) and finally, set a new password.
Twitter, Instagram, Yelp, TripAdvisor
The second way occurs when business accounts don’t have their own login information and are, instead, accessed by personal accounts with admin privileges. To acquire ownership of these accounts, you must be added as an admin or owner, and then remove any other admins.
Facebook, LinkedIn, Google+ / Google My Business, YouTube
One of the largest advantages of paid digital marketing is the amount of data it produces. Data that prevents a new business owner (or their digital agency) from having to plan their marketing strategy from scratch. Not being able to see the past mistakes and success of a business, even under previous owners, is a competitive disadvantage.
Every major social media account a business has may also have a corresponding advertising account. These accounts should have their billing method removed, and then be transferred to the new owners.
Search and Display advertising accounts should be considered as well, whether they be Google, Bing, or a dedicated demand-side platform (DSP).
If having the advertising accounts transferred is not an option, the next best option is detailed reports for each campaign ran, and permission to get additional details from any digital agencies who assisted on those campaigns.
There are at least four parts to a company website that should be covered in a purchase agreement:
Domain Name • File Hosting • Email Hosting • Website Analytics
Transferring control of these is a little more complicated than with social media sites. If all three are hosted with one company, it can be as simple as providing a username and password. However, if all three are hosted with different companies or agencies, the transfer can be fairly complex.
For more information on the different types of hosting, see our previous post here.
It’s important to note that if you lose control of your domain name, all of your company email addresses will cease to work or to belong to you. For example, if we lost control of OpenSail.com, I could no longer have the email address firstname.lastname@example.org. I’d have to start a new email address at a different domain, and whomever controlled opensail.com would now receive all the email sent to my old email address!
As for, Website Analytics, the current website might have years of analytics data — all of which is incredibly useful to a skilled digital marketer. The most common analytics software in use is Google Analytics, which is free software and its accounts can be easily transferred between users by any user who is Google Analytics Certified. However, there are many paid analytics solutions that would require the payment method be changed as well to ensure a smooth transition and uninterrupted data gathering.
Those, in a nutshell, are the three type of assets — Social Media Accounts and Review Sites, Advertising Accounts, Company Websites — that should be covered in any and all business purchase agreements.
And while we’re still on the topic of purchase agreements ...
Before one is drafted, there should be a discovery executed for any and all of the existing business’s online assets. For businesses with large or complex web presences, having a digital agency properly execute the discovery can save a lot of grief in the future. Any assets discovered, should be included in the purchase agreement.
If the sale of the business is contentious enough to warrant escrow being used for other assets, then it is prudent to consider placing the online assets in escrow as well — either with a law firm with experience doing so, or with a digital agency acting on behalf of the law firm.
If you need to gain control of online assets, a competent digital agency can help you acquire control over some of the digital assets listed above. However, there is nothing we can do against a legal judgment declaring that they were never included in the purchase agreement, and therefore, ownership of them never changed. So, be sure to include online assets in the business purchase agreement!
Laywers need to protect their clients during a business purchase by ensuring that online assets are covered in the purchase agreement. If you are purchasing a business and are unsure if your business agreement covers online assets, don’t be afraid to talk to a digital agency, or to bring it up with your laywer – they want the deal to go as smoothly as you do!
We love your feedback!