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Site sale with AdSense revenue
Theoretical question
georgeek




msg:1414855
 7:11 am on May 3, 2004 (gmt 0)

This thread [webmasterworld.com] raises an interesting subsiduary question. If a site has an AdSense revenue of $X/month what is the likely sale value of the site based on this factor alone?

 

racer_x




msg:1414856
 12:07 am on May 4, 2004 (gmt 0)

There are formulas for valuation businesses based on their revenue and/or profit. However these are specific to different types business.

I am not aware of any indepth study done on the valuation of web based businesses. For a website there are no real fixed assets. Of course there is value in the intellectual property of the web pages, configuration and any scripting. As well the goodwill a existing website has in attracting returning vistors and new vistors from search engines.

So based on similar advertising based small businesses. I would say the value would be 3 times the annual operating revenue.

Or 5 times the annual net profit. The is a real net profit, with person who is doing the work actually being paid a salary or wage. Some small businesses the owner does work but doesn't draw a salary so as to make the net profit look bigger than it really is.

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