Help buying a website

[Utlogget]

Website is a game related, 4 years old

Daily vistors range from 10k-15k, mostly US
Average adsense daily income in 2008 is USD 170
Average adsense daily income in 2007 was USD 235

Theres also 30+usd from affiliate networks each day. Seller started doing affiliate networks in the summer, neverblue, cpmstar etc.

So the website brings in about 200 usd each day now.
All stats ok and verified

What would a website with this income go for, 12/18 months of revenue?

any tips

 

[Theo]

I would not sell this one for under 5 years of revenue if these figures are consistent.

 

[Varchar]

The domain name itself and the source of the traffic (and PR) make one big factor in terms of appraising the value of your site. Assuming your figure is consistent and your domain is not that amazing, and that you are making $200 a day, most people only willing to pay up to 12 months of revenue. You also need to state if you invest any money in advertising or promoting the site.

One of the reason why game site is very cheap now is because the market is very saturated with game sites. The PPC clicks used to be 40 cents a click which now pays pennies. Also very often the site's revenue and traffic will dry out soon after the site changes ownership.

It is a big risk for the new owner especially that you are already showing a decline in revenue compare from 2007 to 2008. So the big question is, what will be the daily revenue in 2009 and beyond?

Kawing

 

[Theo]

I don't know where you gather these metrics from, Varchar. Twelve months of revenue for a high traffic site that delivers consistent revenue is laughable. Even in the days of low payouts, 36 months has been the absolute minimum. Rick Schwartz proposed something even more radical: say you're 30 years old, and on average live until 75. You need to charge the difference; that is, 45 years of revenue. Think about it.

 

[Varchar]

The stat is from some of the recent sales at ********* including some of the sites I have recently purchased myself. I basically monitor every game sites for sale since my main business is building and selling game sites. The only difference in this case is that the traffic is really high.

For example, phparcadescript sells game script and listed with $150 daily income and was recently sold with listing price for $25,000. That's less than 6 months revenue. MyPimpScript which I purchased for $7k which also earn $1500 a month. Again, less than 6 months.

Many game sites are listed with starting price below 6 months revenue ended the listing unsold.

This is just the current market trend for gaming sites. It would be very different for other sector such as financial, legal, real estate etc since the PPC payout is still strong in those sector. Again, the risk of a gaming site is that the PPC is getting lower and lower every day.

Kawing

 

[Utlogget]

A little more info here.
website is Pr4, most traffic is from SE and returning users, theres no paid promoting and
the website was submitted to several free web directories in 2006 and have been at #1 side of google for several good keywords for a few years and still is.

 

[Theo]

The stat is from some of the recent sales at ********* including some of the sites I have recently purchased myself. I basically monitor every game sites for sale since my main business is building and selling game sites. The only difference in this case is that the traffic is really high.

For example, phparcadescript sells game script and listed with $150 daily income and was recently sold with listing price for $25,000. That's less than 6 months revenue. MyPimpScript which I purchased for $7k which also earn $1500 a month. Again, less than 6 months.

Many game sites are listed with starting price below 6 months revenue ended the listing unsold.

This is just the current market trend for gaming sites. It would be very different for other sector such as financial, legal, real estate etc since the PPC payout is still strong in those sector. Again, the risk of a gaming site is that the PPC is getting lower and lower every day.

Kawing

Not sure what kind of forums you frequent. Those so-called "gaming" sites that are simply a template with RSS feeds and a free phpBB forum are a dime a dozen. No domain owner worth their grain of salt would sell a sure money maker for ...six months of revenue. They'd be hitting their head on the table six months later, thinking of the money they lost.

All this bullsh!t comes from pseudo-SEO evangelists that price domains by the pound. Please don't spread misinformation from that known forum that's known to be frequented by scammers and fly by night "SEO" gurus.

 

[Varchar]

Well, I am just writing what I am aware of in the gaming/arcade script market. I have no intention of spreading misinformation. Please accept my apologize if you think I have done so.

I, personally, am affected by this downturn of gaming sites. I do agree with you that webmasters will be banging on their head 6 months down the road if they sell for less. But at least I am happy that I have picked up a few revenue sites for less 10 months of revenue.

Regards,

Kawing

 

[Biggie]

i'd have to say any site making $100 a day is worth far more than six months revenue.

either varchar is getting great deals or the rev dries up after a year or so

the other consideration is that these sellers don't equate website sales like domain sales

since i'm not into buying websites, no way i could say....but it seems that there's some money to be made here

 

[overture]

36 months revenue for a web based business is laughable.. thats the going rate for brick and mortar recession proof businesses like beer distributors... you would have to be an absolute nit to pay over 24 months for a non-branded entity within a vertical space where you could raise profits immediately. If you are willing to pay me 36 months I have two websites both doing $xx,xxx per month for over 4 years that i will ggady sell for 36 months revenue.

 

[Theo]

36 months revenue for a web based business is laughable.. thats the going rate for brick and mortar recession proof businesses like beer distributors... you would have to be an absolute nit to pay over 24 months for a non-branded entity within a vertical space where you could raise profits immediately. If you are willing to pay me 36 months I have two websites both doing $xx,xxx per month for over 4 years that i will ggady sell for 36 months revenue.

And that'd be your choice, not mine; definitely not that of dozens of others who own web sites that generate steady income. In fact, if you're so cocksure about your assets, put them up for sale. I would not.