Determining site value...

[Lyte]

Hey ya'll!

I need the help of some domaining pros!! I'm hoping to clarify or correct my understand of site valuation.

My understanding is... when determining the value of a revenue generating site you take the monthly revenue and multiply it by some number of months For example... a site that makes $100/month you multiply that by (let's say) 36 months = $3,600 or at $6000 for 60 months.

Here's my big question... is this process true regardless of the monthly income? Meaning, whether the site makes $1,000/month or $100,000/month do we use this same formula?

Or... is there some other matrix/formula used to determine the sale price of a site when it starts generating more and more money??

Please advise!

Thanks!

Lyte

 

[Ben42]

The monthly revenue formula can give you a basic idea of a sites value but there is a lot more to it. Also, the opinions of buyers and sellers can differ greatly on the number of months. I think most buyers want to settle for 12 months for websites at most.

Things to consider are:
-How are they generating income, can I do it better?
-How much work has gone into the site?
-Does the domain add additional value?

For just domains I hear from between 24-48+ months income. Why the huge difference I'm not sure, but with a domain I guess you can just sit back and get natural traffic where as a website there is SEO and keeping the site popular to worry about.

To sum up though you have to take a look at the site as a whole. Use the monthly revenue as a starting point and add or subtract from there to work out a deal.

 

[Lyte]

Hey Ben,

Thanks for responding.

Hmm... I was hoping for a more definative formula. Is there some pricing related to traffic? I think I've seen some kind of formula relating to traffic. Does that sound familar??

Thanks!

Lyte

 

[cache]

if you earn money by clicks, then traffic is not directly related. If you
run CPM ads, then you may have thousands impressions for a few cents.

Hey Ben,

Thanks for responding.

Hmm... I was hoping for a more definative formula. Is there some pricing related to traffic? I think I've seen some kind of formula relating to traffic. Does that sound familar??

Thanks!

Lyte