oddsod - 6:59 pm on Jul 1, 2005 (gmt 0)

People with those skills are going to value a site differently than someone who has the belief and the personal experience that traffic frequently just disappears

As far as the buyer is concerned there's a wide range of beliefs and personal experience that will decide how far he is willing to go but a site sells on it's own merits, not the colour of the buyer's shoes.

Earnings potential of a site depend in large part upon the skill and experience of the site owner... so what matters is what you can make with the site, not what the previous owner made.

This is not reflected in the many transactions I see. Would you as a seller have a different price for my less than skilled grandmother vs my very web-savvy son? The new owner's monetising abilities are completely immaterial for the purposes of valuation. This is the #1 fudge offered by sellers: when the earnings don't reflect the price they are being offered they offer an earnings figure that is completely arbitary, pulled out of thin air, a future unknown, a wild guesstimate that they are in no way obliged to underwrite (so they can come up with whatever they want).

Buying a business based on current earnings is not an "old school MBA" mentality, it's what's done day in and day out thousands of times everyday all over the world.

There are people who have track records of adding good content and rehabilitating and improving existing sites and turning $5 a day sites into $50 a day sites

Right, and if they take the risk buying your site, invest their time, money, skill and experience into generating more profit out of the site you want a cut of that future profit by having that money factored into the selling price? Some would consider that unreasonable, unfair, extortionate and downright greedy.

People with those skills don't value your site differently - they value it exactly the same way as everyone else: By looking at your past earnings (among other things). They may differ from other buyers in what they believe they can do with it. The emphasis on they should give you an idea of who should benefit from the future investment into and development of the site.