Selling mobile apps is one of the most popular types of business on the Internet. Modern life can no longer be imagined without smartphones or tablets. With their help, gadget users order food, buy cars or just kill time.
Naturally, successful Internet projects when selling bring the owners a solid profit. And buyers benefit from the further operation and development of these programs.
Selling Mobile Apps — Why do profitable apps sell?
Selling mobile apps is the same business as trading any other product. If the product is good, it is taken willingly, when it is bad — not very much.
Why do developers sell a working and profitable project? The reasons are different:
- the product is initially developed for sale;
- life circumstances no longer allow you to engage in the project;
- a potential buyer offers a very good price;
- disagreements in the team led to its collapse;
- just tired and want something new for them.
No program can work on its own for a long time — “supervision” is always required. Troubleshooting, releasing updates, debugging, etc. Doing this for a long time is not to everyone’s taste. However, whatever the reason, if the decision is ripe, you need to implement it.
Determining the value of the product
There is no need to cherish illusions — the project costs as much as its profits. The price is calculated based on the principle of multiplying revenue by a certain time factor. For calculations, net profit is taken — minus commissions, support costs, advertising, etc.
The period for which the profit is multiplied depends on the success and prospects of the project. If monthly revenue is taken, the coefficient is from 12 to 36, in the case of annual — from 1 to 3.
Sometimes the price is set much higher than it turns out during the calculation. As a rule, this happens when a project is acquired together with the staff of developers by a large company.
What else affects the price when selling a mobile application or an Internet project?
Whether we are talking about a project with paid subscriptions or not, it makes sense for the buyer to analyze metrics in the context of customer behavior. You can do this with the help of special services — for example, Google Analytics or AppMetrica. Both the number of people who have abandoned the program and the ratio of the number of old users to new ones will matter.
If most of the clientele are people who have been using the application for a long time and regularly renew their subscription, this speaks in favor of the product.
User behavior makes it possible to analyze the so-called “cohort analysis” well. This is a research method where subscribers are divided into groups based on certain characteristics, and then look at their behavior in a specific period of time. Such an analysis allows you to track a lot of signs:
- user activity — how often they purchase paid subscriptions, whether interest in the product disappears quickly;
- ROI is the payback rate. The indicator allows you to estimate how soon marketing investments are “beaten off”.;
- MAU and DAU are monthly and daily user activity, respectively. That is, how many people logged into the app per day, and how many — at least once a month;
- The ratio of the previous values reveals the so-called “Stickiness” (Stickiness). This is an important parameter — it shows how much the project attracts users.
It is not so difficult to provide an initial download — for example, by promising a discount or another bonus. If a person has not deleted the application immediately after downloading or registering, but continues to use it regularly, it is worth taking a closer look at such a product.
Where is the sale of mobile applications carried out?
There are two ways — selling through the exchange or directly. Each option has its pros and cons.
IT Products Exchange
This is, in fact, an online store where you can buy or sell a mobile application like any other product. The owner places his product, indicates certain analytical characteristics:
- number of downloads per month;
- MAU and DAU indicators;
- Average user lifetime — how long a person uses the program on average before deleting it;
- a brief summary of the project and its prospects.
- the minimum price for which he is willing to give up the product.
After that, the auction for promotion begins. An advantage for the buyer (and a minus for the seller) — the application can be purchased for the initial price if there are no competitors in the auction. If many people show interest in the product, the owner can earn good money.
But we’ll have to share. The main disadvantage of working with the exchange is additional costs.
Usually the seller is charged a commission. On average, it is 10% of the transaction amount. This should be taken into account when calculating the price of the product.
The set of indicators may differ slightly on different sites. The most popular mobile application sales exchanges are now:
- flippa.com
- SellmyApp.com
- www.codester.com
- codecanyon.net
Often, not only the programs themselves are sold on exchanges, but also sites, domains and groups in social networks. By purchasing all this in a complex, you can become the owner of a ready-made business.
Direct sale of mobile applications and online projects
If the exchange acts as a kind of guarantor of the transparency of the transaction, then in this case all the risks fall on the seller and the acquirer. To be sure, you can involve a law firm in the transaction, which will competently draw up a contract.
However, this is already at the stage when the buyer is found. The ways to find it are limited only by the imagination of the seller, as is the case with any other product. Yet, given the specifics of the product, it is not necessary to stick leaflets on lampposts.
You can place ads on business portals – for example, on Bbport.ru . Outline the advantages, describe the terms of sale and the price of the product. For a detailed discussion, of course, it is better to meet with the buyer in person.
Ads for the sale of mobile applications can be seen even on Avito and other similar sites, initially “sharpened” mainly for trading real things. But times are changing. Also, Avito has its own service for the safe conduct of the transaction.
Sale of mobile applications and Internet projects — Legal aspects
Any mobile application is a program. Its basis is the source code protected by copyright. This is the main thing that is transferred during the sale. Together with the code itself, the exclusive rights to it, originally owned by the developer, are transferred.
To protect the interface design from illegal copying, the concept of “industrial design” is used, regulated by Part 4 of the Civil Code of the Russian Federation. This is an object of intellectual property related to the appearance of a product, including a software product.
If, at the end of work on the project, an industrial design is registered (which will not be superfluous), the exclusive rights to it must also be transferred to the buyer.
Selling mobile apps in two ways
The mobile application can be sold in full or with restrictions. In the first case, exclusive rights to the source code and industrial design are alienated. At the same time, the contract may not contain any restrictions.
The second option is a license agreement. Exclusive rights are transferred either for a while or for certain purposes. Territorial and other restrictions may also be included in the contract.
Drafting a contract
The contract of purchase and sale of the mobile application is concluded only in writing. Oral form is not allowed, especially since the product contains objects subject to state registration. After the conclusion of the contract, it will be necessary to make changes to the Register of Copyright Holders.
It is also necessary to provide a section on remuneration — without it, the transaction will be declared invalid.
Taxation of the transaction
For a long time, Russian legislation provided for exemption from VAT when alienating exclusive rights to software, including when concluding a license agreement.
However, since the beginning of 2021, amendments have been introduced to clause 26 of Article 149 of the Tax Code of the Russian Federation, and now only projects included in the Register of Russian Computer Programs and Databases can count on benefits.
In addition, applications intended for advertising or online sales do not fall under the benefits.
Overview of the largest deals in recent years on the sale of mobile applications and Internet projects
Successful and popular Internet projects are not ignored by the bigwigs of the IT market. In 2014, the social network Facebook bought the online messenger WhatsApp. The transaction amount was $1 billion. 3 years before that, Microsoft acquired Skype for 8.5 billion.
Popular mobile applications are also interested in big business. Even if they don’t get such large sums for these products, a good program may well turn its creators into wealthy people.
Below is an overview of the largest transactions for the sale of Internet projects in recent years, in ascending order of price.
Masquerade (MSQRD)
To begin with, you can be happy for your nearest neighbors. A team of young developers from Belarus has created the MSQRD program for editing selfies. The user can change the photo using filters, as well as apply various ready-made masks on it or create their own.
The project made a splash before the Oscar ceremony in 2016, one of the winners of which was Leonardo DiCaprio. Users got the opportunity to try on the face of the star of the movie “Survivor”.
When it was demonstrated live on American television, MSQRD came in third place in popularity in the AppStore. Many large companies began to show interest in the application, but eventually Facebook acquired it. The exact amount of the transaction remained unknown. According to some estimates, it is about $ 100 million.
The developers continued to work on the staff of Mark Zuckerberg. According to them, they had to immediately face serious restrictions caused by the political correctness adopted in the United States.
For example, it was necessary to exclude the masks of an Indian and American rapper Snoop Dogg — their use could lead to accusations of racism.
Looksery
The city of Odessa is known as the birthplace of many jokes, anecdotes and other entertainment. Here, in 2013, the Looksery project appeared, helping users to modify their appearance in a funny way in videos.
The program allowed changing facial features — nose, eyes and even the shape of the skull in real time. In addition, users could try on the appearance of some fantastic character or hero of their favorite movie.
In 2015, it became known about the acquisition of Looksery by Snap Inc., which owns the Snapchat messenger. The transaction amount is $150 million.
After that, the app was withdrawn from Apple and Google stores. Most likely, it was merged with the messenger, since Snapchat specializes in messaging with attached photos and videos.
Runtastic
In 2015, one of the “bison” of the global sports industry, Adidas, decided to extend its influence on the Internet environment. She acquired the Runtastic fitness application, which allows you to create and optimize a training schedule for both athletics and strength.
The purchase cost Adidas 220 million euros.
Runtastic was released in 2009 by the Austrian company of the same name. By the time of purchase, the program had 70 million regular users and twice as many downloads.
In 2020, the new owner announced the rebranding of Runtastic. Now the application is available for download in two versions — Adidas Running and Adidas Training, which are responsible for running and strength training, respectively.
Viber
A popular worldwide program for making calls and exchanging text messages. Like MSQRD — originally from Belarus. In 2013, it was decided to sell the project. To help with the implementation, the owners of Viber, who initially estimated it at $ 500 million, hired specialists from Goldman Sachs.
The financiers did not disappoint — they not only found a buyer, but also increased the transaction amount almost twice. As a result, the messenger went for $ 900 million.
Rakuten, the owner of Rakuten Ichiba, Japan’s largest e—commerce platform, has become the new owner of Viber. At the date of sale of the mobile application, its audience was 300 million users.
Talking Tom and his friends
This series of mobile games was developed in 2009 by the Logins from Slovenia, who founded the Outfit7 company. The app caused a real boom — 300 million people downloaded it in a week and a half since it was added to the AppStore.
The essence of the game is to take care of a virtual pet — a cat or a dog. He can be fed, petted or put to bed. The modern analogue of the “good old” Tamagotchi, besides speaking, has won the hearts of many people — both children and adults.
At the end of 2016, the owners decided to sell his “pet”, valuing it at about half a billion dollars. But here again the consultants from Goldman Sachs helped — the game was sold together with the company itself for $ 1 billion!
The buyer was the Chinese concern Zhenjiang Jinke Entertainment Culture. The company specializes in chemical products, but decided to diversify into the entertainment sector.
The investment is quite successful — from 2010 to the moment of sale, the game was downloaded more than 5.5 billion times. Now there are 7 characters available in it, so users have someone to choose their favorite from. The franchise is popular all over the world, an animated series has been filmed on its basis.
Sale of mobile applications and Internet projects — recommendations
Selling mobile apps and internet projects requires effort. Since products of this kind are quite complex. No one will understand the wilds of functions themselves and master an unfamiliar interface to evaluate the program. Especially when there are enough analogues.
Therefore, a developer who has decided to look for a buyer on his own needs to know the tactics of selling a mobile application — how to present it and reveal its advantages so that the acquirer understands his benefits.
Demonstration of functionality
A real show always works better than lengthy descriptions and boasting. If the product is not ready yet, you need to create at least a demo version.
It is important that the subject of the program corresponds to the sphere of interests of the buyer. For example, the owner of a cafe or restaurant can be offered a project that allows customers to find an institution on the map and order food while still on the way there — as implemented by KFC or Burger King.
The owner of the car service may be interested in a program that will allow you to monitor the repair of the car online. This will increase customer loyalty and eliminate unfair approaches to responsibilities on the part of the staff.
Push notifications
Thematic SMS mailing lists require a decent budget. If you show the buyer how easy it is to notify customers about any event using Push notifications, this can become a serious factor in favor of the purchase.
The owner of the program pays only for its maintenance, and sending push notifications is free. This tool helps to activate customers well — according to statistics, after sending messages, the number of visits to the application almost doubles.
In addition, notifications can significantly increase the comfort of using the product. For example, when delivering food, messages about the stage of readiness or the location of the order play an important role. All this should be demonstrated to the buyer.
Project support
The app can be a great marketing tool. If the possible acquirer is a firm engaged in a certain niche and does not know the subtleties of online advertising, the seller should help them make a decision by describing a possible plan for the implementation and promotion of the project.
It is necessary to offer information support for, for example, three months. Develop a product promotion strategy — at least in general terms. It is not necessary for the buyer to sit and puzzle them over how to apply the project in business. No one will do this — there is no water flowing under a lying stone.
Statistics are a stubborn thing
Often the likely buyer doubts whether the mobile app will increase sales? Some prefer conservative marketing that does not go beyond updating news on the site. Or a person simply doubts the effectiveness of mobile programs as an advertising tool.
Then it is necessary to give statistical data. In Russia alone, more than 50 million mobile devices — both smartphones and tablets – are used to access the Internet. Even for companies working in the b2b sector and selling, for example, machines or cranes, the audience of site visitors is divided roughly in half between “desktop” and “mobile”.
Also, people don not just go online. According to statistics, more than 2.5 purchases per day are made from each smartphone, and almost the same amount from tablets.
In 2020, users downloaded 218 billion programs from Google Play and the AppStore. At the same time, they spent more than $50 billion on app purchases in the first half of the year alone, and these numbers are only growing.
Therefore, correctly selected statistical data can play a serious role in making a positive decision by the buyer.
Adaptation to the platform
This point should be taken into account even before the sale of the mobile application, during its development. About 80% of the market is now users of inexpensive Android devices. There are also very “cool” phones running on this system, but they sell much worse than the products of the late Steve Jobs.
Apple accounts for only about 20% of the owners of the devices. Yet, since this manufacturer belongs to the upper price segment, these are people, as a rule, who are not poor and more often make purchases via the Internet.
Each system has its own type and architecture of programs — this should be taken into account when developing a cross-platform product. The design for Android will seem “eye-popping” to the owner of the iPhone, and vice versa. The result may be a refusal to use, or it will not even come to download.
Therefore, it is worth demonstrating the project to the buyer on both platforms. It is necessary to emphasize that the interests of all segments of the audience are taken into account during the development, and the market coverage will be maximum.
This applies to all types of applications — from a simple calculator to a program for online trading on the stock exchange.
In general, of course, it is easier to find a buyer before the start of work and create a project already under the order. But this is not always possible — many programs are developed without reference to a specific type of activity. Basically, various entertainment products. But, in any case, there is no need to despair. If the application was made “with a soul” — it will find a buyer.
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