Out of curiosity - selling a site with AdSense revenue of $1,000/PM

If I had a website earning on average $1,000 per month in AdSense revenue, would anyone want to take it off my hands for $15,000? The idea of selling sites to release the capital within is becoming more appealing to me by the day in my current circumstances, and I may decide to flog a site or two shortly.

Let me know, and someone warn me if its against the TOC/Policy to offer or sell a site in this manner - I can't see it being against the TOC as I'd merely be selling a site with the /ability/ to earn xxx ammount with AdSense should the new owner place AdSense on it after I've removed my code. Clean as a whistle I'd say.

Pete

 

Pete

I would say it would really depend on the source of traffic and history of the earnings. Apart from that, sites that are strong, easily sell for 12x, but I have personally seen sites going for as much as 20x. Depends on the buyer, how much he/she likes the website. Just my 2c.

 

To me it would depend first on the topic of the site. Then the things Honey mentioned as well as what the true expenses of the site are.

 

Expenses play a big role. When I hear revenue of $1,000, the next thing that comes to mind is "what are the expenses for the site?"

 

Personally, I'm flabberghasted every time I see someone selling a site for more than a few grand based on adsense revenue.

It seems there are either a lot of people who don't do proper due dilligence or there is a lot of information getting passed off behind the scenes and analyzed very quickly.

I mean, to value a site at $15+K, you would think:
a) are the earnings sustained for a good period of time (most of the time I see sites it's less than 6 months at the claimed income level)
b) are the expenses legitimate - it takes a while to research whether inbound links are really organic if the expense numbers don't quite make sense.
c) are the earnings sustainable for the long term or is there a growth opportunity? This really depends on the niche, the informative value of the site compared to others within the niche, the market sustainability of advertisers within the niche, the existing and prior marketing strategies, community acceptance of the site, etc. All things that would take a lot of time to figure out.
d) is the owner willing to stick around long enough for a complete knowledge transfer? Is the owner capable of knowledge transfer?
e) What are the real hosting requirements? Are the pages templated? Are the templates all still available?
f) How will the existing end user community respond to a change in ownership?
etc. etc.

I can certainly see some sites selling quickly for maybe even up to 50K that are obviously valuable properties, but not most sites. With all the information I would need to make a decision on a valuable web site, it really makes me wonder about the marketplace. The hot "selling factors" - adsense revenue, pagerank, organic links, community size, etc. are all so easy to falsify it would seem that people would demand more information in the initial sales posts, but strangely they do not.

Just my 2 cents. I think if you have a 1k/month profit site for 15K you will probably find more eager beavers out there than you would expect - at least from what I've noticed in the past year or so.

 

What everyone said about the site's topic.

 

The sites content is crucial. Is it topical and may go out of fashion?

 

I would also like to add that the reputation of the seller is very important. My firm uses that as part of the buying process. If a DP forum member with a good rep and over 1K in posts is selling that would justify a higher price. If it’s some new person with 10 posts we would discount the offering substantially.

The other factor I see as critical is the time to manage. Obviously a site you think you can manage with ten minutes a week is worth more than a site that takes ten hours to manage.

Just my 2c as well, good topic. I wish there was a $1000 AS site for sale we'd love to bid on it!

 

NevetS - Good post

I would just add that traditionally businesses have been valued at a multiple of net profit or earnings over the previous 12 months. (Commonly referred to as the PE ratio).

Earnings should be net of ALL costs.

When considering buying a site it is important to take into account the time you'll spend running it. If for example this site takes 40 hours a month to maintain and you value your time at $15 an hour, it means you should subtract this cost from the revenue. ($600/month)

In the case of this site the sums could look like this:

Revenue: $1,000 x 12=$12,000
Labour: $600 x 12=$7,200
Other costs: $1,000
Profit:$3,800

Therefore $15,000 is roughly 4 times profit.

This would be a fair price for a small business provided:
1) Revenues are, at the very least, sustainable at the current level
2) There are no foreseable additional costs (including time) unless they would create additional revenues
3) The knowledge can be transferred
4) The site topic has long term appeal

 

Ok a bit more details about the site I'm thinking of selling:

The mast majority of IBL's are from articles that have been written by an e-lancer and placed on article banks and submitted through Yahoo Groups for the back-links. There's over 40 articles on the site and currently spread over 3 article banks. Other back-links are from directories and a handful of sites ranking high for the big term in this topic - over 650,000 overture searches per month. I'm targetting over 20-30 secondary terms with the site aswell. The links for the terms I'm targetting, from the articles all have the correct anchor text, and with them being mostly 'article back links', every link is on a page with relevant content to the keyword, with the keyword in the anchor text, and the title of the page linking has the key-words in.

The site's being in operation for 6 months.

There is also an e-book I've had made by a very good elancer. 2 e-books infact, with 2 'bonuses' - both e-books are spot on related to the sites content. This has it's own 'sales' page and is set up on ClickBank but I've NOT released it to affiliates yet. The e-books do contain a lot of the information that's in the 'articles', but not all of it.

There is no 'community', no forums or anything like that. It's a very nice, clean site.

The site is pure HTML and requires very little maintence but adding a few articles whenever you feel appropriate. There's so much to this subject and so much one could do with the site with the right skills.

A huge advertiser base will always exist for topic of the site on AdSense and anywhere, and if you fancy, there's a lot of scope for developing your own products (being mainly e-books) about various sub-topics, hooking them upto clickbank aswell and releasing to affiliates. To be honest, the potential is endless............

There are no expenses to speak of except the hosting costs. No bought links, no rented links, no advertising campaigns going on, absolutely zero and relying only on natural traffic at present. No co-op advertising, 'cos I couldn't work it into my html pages. I'm not technically minded enough with the patience for that - so that's maybe something with potential?

The site is my baby as it's the first site I created with profit in mind. I'd really like to keep it and expand and dominate the field but the debts from old off-line business are catching up fast. I'll keep you guys posted. Although I only recieve traffic from Yahoo and MSN at present (around 500 uniques/day @ $300/month AdSense) I'm expecting the site to come out of the sand box any time soon, and that's when it will be ready to sell as the surge in traffic should be quite phenominal based on the keywords I've targetted and ranking inanchor for and all that jazz. That's when the site will be worth something sweet and nothing short of $1-2k/month.

Someone could turn this into a monster, especially with it coming with the e-books that you will sell separetely for a pretty penny and are advertised on the site with their own 'mini site' guides.html - I've not had the money recently (no kiddin', else I'd be keeping this site without question!) to invest in getting the sales page to convert more then 1 in 500 sales, but if you can take this to the 1% and release it to the ClickBank affiliates that alone would be a killer.

Even with the lack of traffic at present I'm thinking the site's worth a hell of a lot more then $15,000 now. Hell, I suppose when I sell I'll just do it via an auction and let you and the other bidders decide what it's worth 'cos the earning potential of the site AND the e-book is something huge. Of course, I won't be selling until I'm out of the sand box, which shouldn't be long now. The G-Bot first visited in March. I'll post all the webstats and such after this happens and release the details of the site, the e-book package and everything then. This should be enough to hold your interest and decide whether the site's for you though!

Pete