JS_Harris - 5:01 am on Mar 14, 2010 (gmt 0)
Good question but the real answer is that the owners income is irrelevant, it's an arbitrary figure that doesn't impact the site in any way.
To figure out what a site is worth you need to figure out how much it can reasonably be expected to earn and subtract what it would reasonably cost to run it. These figures are worked out for various amounts of time, 6 months, a year, 2 years and 5 year forecasts are a good idea.
Next you need to figure out how unique the site is and determine how much competition it has. If the site is similar to other sites expect to pay less, perhaps 6 months revenue for it. If a site is one with authority, in a tough sector to gain ground in and hard to duplicate expect to pay more for it, perhaps 2 years gross revenue.
Only the best of the best sites will fetch crazy values, the rest will get more reasonable valuations and as always it pays to sell where there is a lot of demand or buy when there is little demand if you forsee an increase in future demand.