Why it matters
Search engines, app stores, marketplaces and advertising platforms change their ranking systems and rules often. When a change goes against a business, the effect can be sudden: a content site loses most of its search visitors, an app drops out of a store category, or an ecommerce brand's adverts are disapproved.
Timing is what catches buyers out. Listings usually quote figures for the trailing twelve months, so if the hit landed in the last few months, the headline numbers still carry the stronger period before it. A price built on those figures pays for traffic that has already gone. Sellers are not always hiding anything. Some genuinely expect a recovery, and recoveries do happen, but they are uncertain and can take several update cycles. You should not pay for one in advance.
The Loupe valuation tool reduces the multiple when revenue is down 5% or more on the previous 12 months, with a larger reduction when it is down more than 20%. For SaaS, a rule on annual growth takes the place of the revenue rule. For content sites and apps, a traffic fall of more than 20% over 12 months brings a separate reduction. These rules compare full 12-month periods, so a hit in the most recent quarter can be understated. Run the numbers again on a recent run rate before you rely on the indicative range.
Trailing twelve months means the most recent 12 consecutive months of figures, whatever the financial year. It gives a more current view than the last set of annual accounts.
A run rate annualises a recent short period, such as last month's revenue multiplied by twelve. It shows current pace, not what the business actually earned over a year.
How to spot it
- Monthly traffic or revenue drops in a clear step rather than drifting, and the step lines up with a known update or policy change. Google publishes the dates of its core and spam updates on its Search Status Dashboard.
- The listing quotes 12-month totals but the seller will not share a monthly breakdown.
- The last three months, annualised, sit well below the 12-month figure.
- Ranking keywords or app store positions fall sharply over a few weeks.
- The seller mentions platform emails about policy breaches, demonetisation, removed listings or disapproved adverts.
- The business changed its model recently, for example from display advertising to affiliate links, without a clear commercial reason.
- The site has published large volumes of thin or automated pages, hosted unrelated third-party content, or bought links. These are practices that search engine spam policies target.
Questions to ask the seller
- Can you share traffic and revenue by month for the last 24 months, split by source?
- Has any search update, app store review, marketplace policy or advertising policy change affected the business? What happened, and when?
- Have you received a manual action, warning, strike or policy notice from any platform?
- What did you change in response, and what has recovered since?
- Have you bought links, paid for guest posts or published content at scale with automated tools?
- How do the last three months compare with the same months a year earlier?
Documents to request
- Monthly traffic and revenue by source for at least 24 months, exported directly from the analytics and payment accounts
- Search console data showing clicks, impressions and any manual actions or security issues
- Every notice from search engines, app stores, marketplaces, payment processors and advertising platforms in the last two years
- Backlink reports, and invoices for any link building or sponsored content
- A dated log of site migrations, redesigns and large content changes or removals
- Advertising account history showing disapprovals, suspensions and appeals