What’s it worth?

[Kenny B]

How does one put a dollar value on a website? Lately I’ve noticed some webmasters trying to sell their sites anywhere from $5,000 to $750,000+ and you have those who claim their sites are worth millions based on current or past performance.
So what is the formula to evaluate what a site is worth, how much is based on current (or past) sales, traffic, content, and potential? I know this is a very broad question as all sites are different but I’d really like to know how people come up with an asking price for a paysite.

Happy New Years & hope to see to everyone in Vegas!

[Darin]

I think they just roll dice.

[Evil Chris]

Originally posted by Darin
I think they just roll dice. Darin... try to behave for once! LOL

[wsjb78]

Originally posted by Evil Chris
Darin... try to behave for once! LOL

As RPGer I have to agree with Darin. The dice are never wrong!

Once I get accept for "Who wants to be a millionaire" I'll trust the power of a D4!

[Mister X]

I think there are a lot of different factors to consider. With most sites the actual content is worth the smallest fraction of the asking price. Unless it's exclusive content it loses it's value steadily as it ages. A good domain name can be worth a LOT as anybody knows. The actual number of members I would guess would be worth no more than half the renewal value of each membership. That might even be a little high. If a site has 1000 active members, chances are usually pretty slim that there's going to be a 50 percent rebill. If there is actual physical hardware like servers that may or may not raise the price. A european buyer might have little or no interest in owning servers that are physically in the US for instance. Then there's a lot of somewhat ephemeral stuff to consider. Does the site have high brand recognition? Is it already overexposed, like say Bangbus, and starting to slide or is it well positioned to make it possible to grow the site? Is there an affiliate program in place? Is it an active/effective program? Does it have something that would appeal to your current traffic sources or are you going to have to try learning a whole new niche?

I think in the majority of cases I wouldn't be willing to pay more than the equivalent of 2 to 3 months of the site's income. If it's something that you can fit right into your current operation then perhaps a little more. I don't think there are any sites worth millions. It's far too risky a proposition when you are dealing with chance. We've all seen sites selling like crazy and then disappearing virtually overnight. Anyone remember Busty Amateurs anymore? Hehe.

[-=HUNGRYMAN=-]

The industry "rule of thumb" is basically that your site is worth AT LEAST what you can prove it makes in 6 months time ... but as Mister X noted, there is still alot of risk involved.

Lets say I have a site that is making 10K a month clear ... I sell it to you for an agreed price of $75K as a turnkey site ... (affiliate program, affiliates, content, etc)

There is NO GUARANTEE WHATSOEVER that because I had the smarts, the business-sense, and whatever else it takes to operate a sucessful site, that you too will have it and be able to put it off to enjoy the same level of success ... but also there is the chance that you will be even MORE sucessful with the exact same site than I was ...

There are MANY variables in buying existing sites ...

[Darin]

Originally posted by Evil Chris
Darin... try to behave for once! LOL

Hey it's true! lol!

[Mister X]

Originally posted by -=HUNGRYMAN=-
The industry "rule of thumb" is basically that your site is worth AT LEAST what you can prove it makes in 6 months time ... but as Mister X noted, there is still alot of risk involved.

Lets say I have a site that is making 10K a month clear ... I sell it to you for an agreed price of $75K as a turnkey site ... (affiliate program, affiliates, content, etc)

There is NO GUARANTEE WHATSOEVER that because I had the smarts, the business-sense, and whatever else it takes to operate a sucessful site, that you too will have it and be able to put it off to enjoy the same level of success ... but also there is the chance that you will be even MORE sucessful with the exact same site than I was ...

There are MANY variables in buying existing sites ... Yep... that's what I mean about whether or not you can fit it right into your operation or not. If that's the case it's worth a lot more to you than if you have teen sites and you have to learn how to get traffic for a gay site or something like that. I think it's probably pretty easy to buy a successful site and run it straight into the ground within a couple of months if you don't have the savvy to run it.

[Evil Chris]

I'm not so sure how much the content on a site should figure into the selling price. Content goes stale very fast. Even exclusive content. Exclusive content brings them in and keeps them longer, however that doesn't mean you still don't have to update just as often.
So I wouldn't figure content into the selling price that much.

What I would base a price on primarily is the traffic. How much is it getting, where is it coming from, is it paid traffic (ie. affiliates) or is it generally type-in or SE traffic? These factors will let you know what your domain is truly worth IMO.