Hello, I am interested in hearing from those with expertise in selling sites, particularly forums. Is there a suggested methodology for valuating it or determining the asking price? For those of you who sold forums in the past, what methods did you use?
What are you selling? Varies a lot depending on all factors, number of members, traffic, earnings, topic of forum, etc.
Basing a forum value on income usually places it around 18-24 months income (as opposed to 10-12 months income from a content site). Other things matter also though, such as uniqueness and of course traffic.
Peter: I am doing research for a member question posed at my forum. Any recommendations on how to determine value based on topic? mdvaldosta: When you say 18-24 months income, you mean to take the total cumulative renenue for that period as the current value, or the average monthly revenue for that period multiplied by 18-24 months? Since traffic should boost ad revenue, could dollars in ad revenue collected per daily unique be a good metric to use? How much do domain value, software included, development time invested, etc. play into the formula? Thank-you for your help!
Every factor plays a lot. For example, here's a listing for a forum where the primary value is the domain. That's one I'm selling, and take away the domain and the sale doesn't really justify a four figure sale price. The members, database of posts, and traffic are just nice bonuses to go along with a top quality forum domain. Subject is meaningful too. For example, I recently bought a forum about daycare. It's a much more active forum, lots more posts, than the one I mentioned above. However, I have a difficult time to find anyone interested in buying it because the niche is one that most people in the market of buying and selling websites wouldn't be familiar with. So, the sale price of this forum, even though it's so much more active than the first, would be a similar price. And, earnings would be a small or insignificant factor in the sale of both of those forums, even though I do agree with mdvaldosta about the 18 to 24 months revenue being a good starting point for a sale price. Just, sometimes revenue is not how you can get to final sale price. So many forums are created and built without earning money being a major factor. Hope that helps.
When I say 18-24 months revenue, as Peter said that's just a starting point and there are other factors involved. Let's say a forum generates $100 / month revenue from Adsense as it's sole monetization - but the server costs and adwords promotion are costing $75 / month and it takes a couple hours a day to manage the site... well then the forum wouldn't be worth that much. Add that to the fact that this only applies to sites being purchased for the sole purpose of generating income. It's really something that has to be taken on a case by case basis. Content sites made for revenue are much easier to value.
It seems I've received an infraction for posting this thread in the wrong category. Perhaps a moderator can move the thread to a more suitable forum.
I have wondered the same thing. I am in the market to maybe sell one of the forums that don't make any money. The problem is it is a general discussion forum -- can anybody aid in how I would go about evaluating it before I put it up for sale?
A general discussion forum not making any money is going to be hard to sell. Does it have any redeaming quality? Tons of traffic? A brilliant domain name?
I wouldn't say that's nothing. There are lots of people here who could do well with a site getting a lot of traffic. I'd recommend auctioning it though, let the market set the price.
i got some different opinions here 1st preference is obviously revenues Then its >> No of new members joining in the board month on month basis >> No of active members >> Quality of members >> No of posts increment month on month basis Lot of factors are to be considered for valuing a forum
Sure. But you'd be surprised at how much they all boil down to one thing: money. Quality of members/posts in itself isn't an investment reward. It has value for what it can be leveraged for. Why do people part with money? Because your product/service presses the right buttons. Usually that button is money (via earnings). True, there will be some buyers who are looking to acquire a "community" for some other reason. Perhaps they like the subject. Perhaps they've grown fond of the site and don't want to see it change. Perhaps there's some other reason. But it's very rare that any reason overrides the big M. Compared with content sites forums mean more work, more security risks, less new visitors and more repeat visitors (so low CTR for ads), less layout control, less earning power. Does that all compensate for the free user generated content? No, not if that user generated content is not earning the big "M". It could earn either directly via ads... or indirectly e.g., reaching critical mass in its sector and giving you the credibility to run webmaster pub cons (Brett Tabke and his conferences). But, that still boils down to profit. I'm having trouble seeing why forums should command a higher multiple than content sites.