Website Valuation

[zinc]

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hey all

Anyone know how I work out the value of my sites (roughly)?

Cheers

[Adeel]

tell me ur sites n ill give u some idea on it...

[KieronD]

It's ususally based on x years times net profit. Whereas x could be anything from 1 to 10. Not being vague intentionally, its just valuations differ in different sectors and different buyers. There is no set standard.

[morleymouse]

stability / age too? A site made live 3 months ago, turning over £500 profit a month for the past 3 months wouldnt (in my eyes) be worth £6k and thats just one years profit.

then theres cost, how much traffic and sales are being driven by PPC, if its a lot do the keyword lists come with the site etc

in the end its as much as you can get someone to pay, you might drop lucky and find someone looking to get started i nthat sector and you have a site thats 3 years old you just want rid of in which case it would be a bit of good luck on your part and a great investment for them!

[csn]

What happens if the site doesn't earn much?

YouTube would have been costing the owners a bomb in bandwidth.

Where would the sum Google paid have been derived from?

[Adeel]

3 major factors i would consider buying a site wud be ummm

1: customers (registered) - so ill get set data for email marketing as u know conversion is far better with existing customers than new..

2: no of clickz are not relevant coz it can be bought from search engines but i would definitely value SEO strategies, inbound links and directory submissions to analyse free traffic.

3: does it serve the purpose (my set requirements)? if it does then i mite be able to bid higher..

Ciao..

[deano6410]

I have tons of info on this, I will upload it for you and send you the urls when it is online.

Dean

[Shak]

I Have bought and sold a number of sites, so here is my 2p worth:

Contracts
Systems
Processes
Are the new buyers buying a site that can be run by them, or do they need to buy You for a ceratin length of time.
Diversified traffic (organic search, ppc, affiliates, type ins)
Outstanding liabilities
Trademarks
Growth Potential
Technology (licensed or in house)

as a seller it's your job to make it as easy as possible for the buyer to understand what EXACTLY they are buying.

as a buyer it's their job to do due dilligence on you and your site, and frankly put, time is money so many haven't got the time if the purchase amount doesn't warrant undue legal expenses.

however 1 key question, why do you want to sell ?

there has to be a valid reason.

ok enough boring stuff at 7am

shak

[zinc]

I don't want to sell my sites I am just curious and just wondered if there were a simple formula to work out its value but I guess this makes sense

Thanks everyone

[mickn88]

In a strict sense, people buy companies based on their earnings and growth potential. If companies change hands in your industry for 10 times earnings(profit), it does not mean your company will be worth that. It could be worth more or less, depending on the growth rate.

However companies can often shell out bundles of cash to acquire a company so that they can get their hands on new technologies, trademarks, customers bases, easy market entry....In instances like this, there is no real conventional valuation.

Basically there is no set value on a company. It is worth different things to different people. eg...if you have a new technology ...but you are making a loss.....you could still be worth a lot of money for google/yahoo etc who could take your technology and implement elsewhere. However to a conventional business investor your company is just a "dog" that he wouldn't touch with a barge pole.

[deano6410]

I don't want to sell my sites I am just curious and just wondered if there were a simple formula to work out its value but I guess this makes sense

The only formula is this:

Worth = What someone is willing to pay for it

I have bought and sold many, many sites this year and I have wrote numerous site buying and selling articles for numerous sites, but this is the only exact formula.

[Shak]

The only formula is this:

Worth = What someone is willing to pay for it

I have bought and sold many, many sites this year and I have wrote numerous site buying and selling articles for numerous sites, but this is the only exact formula.

dean

without asking for specifics, could you maybe clarify the following:

a, many many sites ? (less than 10, over 10, over 50)
b, average sale/purchase price
c, timescales from agreeing to buy a site to completion

thanks

shak

[deano6410]

a, many many sites ? (less than 10, over 10, over 50)
b, average sale/purchase price
c, timescales from agreeing to buy a site to completion

Shak,

a) I do this as part of a fairly new partnership, but we have bought and sold somewhere between 10 - 50 sites thus far.

b) I prefer not to answer this one, the numbers vary too much. We have bought small sites for a few hundred dollars and are in talks for sites around $70,000. One of the network of sites we sold was sold for 7 figures.

c) With smaller sites we generally manage to keep it under 48 hours. With larger sites our lawyers get involved.

Feel free to contact me via PM for any future queries.

Dean

[axod]

I find it useful to check things like

http://www.sitepoint.com/marketplace...y?categoryid=1

There's a wealth of information on there, so it gives you a rough idea of what people are buying and selling websites for.
Quite a lot of the sites listed are lame though - "93 unique visitors for this month alone!!! $4.19 monthly earnings!"