How do I determine what a Website is worth?

I own a site that has a PR3 ranking, I took the site down but I still have it.

Is it worth $100 or so?

I have no adsense or anything on it

 

(1) Take the last 6 months of gross, and divided by 6
(2) Take the last 6 months of costs, and divided by 6
(3) Do (1) minus (2)
Fair price is (3) X 10

And don't forget Page Ranking is meaningless...

 

so with that formula that guys pr5 website that he made over 40k last year is worth the 25 he is asking?

 

If the website's traffic based on SEs, then the website probably does not worth more then 1 monthly income it generates... Since the SE traffic is totaly unreliable. If the traffic somes from links / members / subscribers then you can say it worth 6-10 month of gross. And yes PR is meaningless unless we are talking about a PR7 or higher site when you can sell some links.

 

Absolutely. If he does 40K net / year (based on last 6 months), I'll buy it today for 25K, As-Is, no question asked...

 

You are applying real life rules to an Internet based business. Big mistake. Never heard of websites which lost their ranking overnight?

 

It might be a big mistake, but not concerning ranking, again.
Ranking is meaningless.

I have a website " mysite.com " - 7 y/o, PR0, no advertising, no backlinks.
I have a web page at " mysite.com/page " - 2 months old, PR3, no advertising, no backlinks.

I actually put mysite.com on mysite.com/page as backlink to increasing the ranking of mysite.com. But it is not working

 

The way I would value a domain, is the same way I would value real estate:

There are three components:

1) The domain name value. This would be comparable to land value. The best way to appraise this is to find comparables that have sold recently. This may be difficult, if there is no public record of similar type of domains, but Afternic and Sedo may be good places to start.

2) The website value: This would be the value of the site you created and the value you built into the site (e.g., PR). Again, comparables would be the way to go, but each buyer may see the value differently - just as different investors place different value on buildings. Most of the time you have to wait until someone comes along and sees value in the website (building) that you built.

3) The revenue value: This is pretty straight forward. An investor would look at the revenue stream and compare it to the risks and returns that they could get in another similar investment. If a site is earning $100/year then if I , as in investor, paid $1000 for it, then I would be earning 10% a year on my investment, which is darn good compared to other investments. Government bonds right now are earning less than 5% and corporate bonds are at about 6 -7%. So 10% would be very nice, especially if the earnings are consistent. However, it the investor has to put a certain amount of money each year into maintaining the site and the earnings level, then that would have to be deducted from the expected return.

I hope this gives you some idea on how I would value your site,

Happy New Year!
Rich

 

Rich very good tips thanks and happy new year to you too!

 

for example, if my net income for 1 website is $3 a month then can I ask for $400+ for the website (according to your example richrf) or is it way over what its really worth is like 50-100 dollars???

 

If the $36 a year is a consistent return with no extra work required, this would yield an annual return of 9% on the $400 investment, which by all measures is excellent. Such a property, could probably be resold for at least the same $400, which means no loss in principle.

However, there are two other factors to consider:

1) Will the property (domain name) appreciate. If so, this would be an added return over and above the 9%. As a real property, this would be excellent.

2) What is the cost of maintaining the property (domain name + website). This annual cost - it could be, for example, daily labor that must be used to administer or upgrade the site, maintain SEO, etc. - must be subtracted. Clearly time/labor is a cost that must be included, since there is a limited amount of this available.

An investor, would probably also look at the traffic and decide that the traffic can be more effectively monetized (that is, money is being left on the table), and that the property is worth even more because of the potential. This may create a situation where there investor is will to pay more than the intrinsic value and revenue stream would suggest.

Hope this clarifies a bit how I might look at an domain investment,

Rich

 

Dude, you better not invest in domains...