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Valuation factors for websites

Discussion in 'Sites' started by itsme, Jan 30, 2006.

  1. #1
    Hi all.

    As most of us here are either buying or selling websites, I wanted to get a few opinions about what makes some websites worth more than others... aside from the obvious adsense stats.

    What contributes most to the value of a website? How to determine whether a certain revenue stream is solid enough to be considered?

    - AdSense Revenue (or other ad networks) tend to be the main thing that people base their valuations on, but is it reliable? In my limited adsense experience, these numbers change... a lot sometimes.

    - Link sales revenue. I see less of this being considered as a solid revenue source, but I have some sites that deliver stable and reliable income from link sales... especialy when the links get sold several months in advance.

    - Affiliate sales. This is for sure a MAJOR risk to base the value of a website on affiliate earnings... You are at the mercy of the products/networks provided to you, not to mention the late payments that are often associated with affiliate networks... and fluctuations in CTR and conversion rates.

    - Domain Name, in my opinion the most under valued factor of the bunch. I've seen quite a few websites with fantastic domain names sold purely on their revenue stats despite having domains that would probably fetch a hefty sum on their own!

    - Traffic. Is it really worth paying for? How much is it *really* worth? Do you place more value on natural type-in or search engine traffic? How can you be sure it's going to stick around once the sale is made???

    - Content / SEO / AGE also seem to have a part in the equation... perhaps too small?

    So what are your thoughts? Do you think that we are concentrating TOO MUCH or too little on certain aspects of the sites we sell/buy? What would YOU like to see considered most when setting a sale price?

    I personally think that AdSense revenue alone is not what makes a good website. I think there are a lot of great sites that people are afraid to list because they don't generate enough AdSense $$$... don't be shy folks, let your voice be heard, what's most important to you?
     
    itsme, Jan 30, 2006 IP
  2. GeorgeB.

    GeorgeB. Notable Member

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    #2
    2 words: passive income

    Buyers are looking to buy a site that makes the most money for the least amount of work.

    They are also looking at longevity. How long the site has been earning the amount it is and what are the chances it will continue earning that amount or even more.
     
    GeorgeB., Jan 30, 2006 IP
  3. itsme

    itsme Well-Known Member

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    #3
    Yes but can you really guage the value of a website from (most commonly) the last 3 months or so of AdSense income?

    I would much rather buy the website with a mix of good domain/content/PR since these require *little* work to boost traffic and therefore ad revenue/aff sales.

    I do understand what you're saying though... lots of people just want to buy it for $xxx and wait 6-10 months for the cash to come back, then resell (or keep) the site and do it all over again. No work, all gain. :)

    But with no work often comes no results... :(

    Maintaining ad revenue may not be so easy, that is why I have started this thread, to see what else OTHER people consider valuable in a website.
     
    itsme, Jan 30, 2006 IP
  4. Seiya

    Seiya Peon

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    #4
    Not only that... i just spent a grand buying a site that makes 0 profit and is inactive. I bought it because its OLD , has a lot of indexed pages and gives me a nice COOP :p
     
    Seiya, Jan 30, 2006 IP
  5. perdrix

    perdrix Peon

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    #5
    Offer any true investor the opportunity to make 5% on their money with minimal work, and most will take you up on your offer. After all, that's a 60% yearly return on your investment. On this forum, however, the going rate is actually 10% a month... an absolute steal... if the income can be verified, and traffic maintained afterward.

    I value websites based on their originality, genre uniqueness, long term income, and the ability to incorporate the site into my network. I pay premium for those sites with high natural search engine traffic and high bookmark rates, or sites with internal income (not advertising related) that are not drop-shippers.

    I devalue sites which require heavy amounts of my time, lack extensive proof of long-term income, have had heavy SEO, are involved with link swapping or selling, templated, or turnkey. Doesn't mean I won't buy them, just that I won't pay a lot for them.
     
    perdrix, Jan 30, 2006 IP