The glossary

What the words in a listing actually mean.

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Valuation and accounting

MultipleThe number a business’s profit is multiplied by to reach a sale price.TTMTrailing twelve months — the most recent twelve months of performance, used as the basis for valuation.Add-backAn expense added back to profit because a new owner would not incur it.RPMRevenue per thousand impressions or sessions — the standard measure of how well site traffic monetises.EPMVEarnings per thousand visitors — total revenue divided by sessions, in thousands.Working capitalThe cash a business needs on hand to keep operating between paying costs and collecting revenue.Owner dependenceHow much of a business relies on its current owner personally — the discount buyers apply hardest.

Recurring revenue

MRRMonthly recurring revenue — the predictable subscription income a business bills each month.ARRAnnual recurring revenue — monthly recurring revenue expressed as a yearly figure.Net revenue retentionThe share of last year’s recurring revenue still being billed a year later, after cancellations and upgrades.

Deal terms

EarnoutPart of a sale price paid later, only if the business hits agreed targets.Non-competeA clause preventing the seller from building a competing site after the sale.Inspection periodThe window after funds are in escrow during which the buyer verifies what they received.Buy Now priceA fixed price that lets a buyer purchase a domain immediately, with no negotiation.Lease to ownA domain sale paid in monthly instalments, where ownership transfers once the final payment clears.Fast TransferA network arrangement where a domain sale completes instantly because the name is held at a participating registrar.Asset purchase agreementThe contract that transfers the specific assets of an online business, rather than the company itself.Non-solicitationA clause preventing the seller from approaching the customers, users or staff being transferred.

Traffic and search

Type-in trafficVisitors who arrive by typing a domain directly into the address bar rather than clicking a link.Referring domainsThe number of distinct websites linking to yours, counted once per site.Content decayThe gradual loss of traffic to older pages as rankings slip and information dates.Core updateA broad change to search ranking systems that can move a site’s traffic sharply.

Domains

WHOISThe public record of a domain’s registration details.Aged domainA domain registered years ago, whose registration date is older than a freshly registered name.Exact match domainA domain that is precisely the search phrase it targets, such as carinsurance.com.Brandable domainAn invented or evocative name valued as a brand rather than for describing a category.BackorderA standing order to attempt registration of a domain the moment it becomes available.Transfer lockA 60-day hold that prevents a domain moving between registrars after certain changes.Auth codeThe password-like string that authorises a domain transfer between registrars.NameserversThe servers that tell the internet where a domain points — and, on some marketplaces, what commission you pay.RegistrantThe person or company recorded as the legal holder of a domain registration.ccTLDA country-code extension such as .co.uk, .de or .ca.Redemption periodThe window after a domain expires during which the original owner can still recover it.CybersquattingRegistering a domain that trades on somebody else’s trademark, in bad faith.

Covered in full elsewhere

GuideEscrowA third party holds the buyer’s funds until the assets have been transferred.GuideGoodwillThe part of the price not attached to any transferable asset.GuideHoldbackPart of the payment kept in reserve after closing, released once conditions are met.GuideLetter of intentA non-binding outline of the deal, agreed before the contract is drafted.GuideSDE and EBITDATwo earnings measures; which one applies depends on the size of the business.GuideSeller financingThe seller is paid part of the price over time, out of the business’s earnings.

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