Appraising Your Own Site

DangRabbit · Apr 27, 2006

How do you figure out the value of a site you're selling?

I have a site. 190,000 uniques per month. PR7. Top 100,000 in Alexa. #2 and #3 in Google and #1 and #2 at Yahoo for the top search terms. 118,000 incoming links in MSN, Yahoo and Google combined. Big publicity in the media.

But revenue is low. About $2K per month. (original goal wasn't to make money -- think non-profit awareness type site).

So... if this were yours and you had prospective buyers in the same industry interested... how would you figure out the price?

Thanks!

aldwin · Apr 27, 2006

an easy way is to set a revenue multiplier and make a simple moltiplication.

the more complex way is to think about a potential commercial use for your traffic which will not scare away users, estimate the potential earnings, take 60-80% of that estimate and multiply it for your desired revenue multiplier so that you have your price.

DangRabbit · Apr 27, 2006

Aldwin,

Thanks. I don't really understand multipliers, but that is how the company that did the appraisal came up with a value, and is also why they capped the value of our traffic.

But how do you account for traffic, good market saturation, excellent search engine and linking prevalance, reputation, individual domains and content itself? Certainly, they must all have a value, no? We have become the "Pepsi" of our industry in reputation and popularity and I believe our prospective buyers know it. What kind of multipliers take that kind of Rep, PR and Marketing into account?

Any ideas are helpful...

aldwin · Apr 27, 2006

DangRabbit said:
Aldwin,

Thanks. I don't really understand multipliers, but that is how the company that did the appraisal came up with a value, and is also why they capped the value of our traffic.

A multiplier is equal to X years of revenue.
Usually when selling to resellers you may get 2-3 years revenue but you can go as high as 10 years for certain domains.

But how do you account for traffic, good market saturation, excellent search engine and linking prevalance, reputation, individual domains and content itself? Certainly, they must all have a value, no? We have become the "Pepsi" of our industry in reputation and popularity and I believe our prospective buyers know it. What kind of multipliers take that kind of Rep, PR and Marketing into account?

Any ideas are helpful...

That's a totally different thing.
All of that can surely bring a premium with itself, and usually you do that by increasing the multiplier.
It also depend on buyer.. if you want to have all taken into account it's better to find someone already in your industry or which may expand in that industry so that he may see the value all that carries.