How to Value a Site

How do you know what to sell your site for?

[napka]

I've read a number of postings mentioning the sale of websites. I run a fledgling site with a partner and we're trying to determine each of our stock in the project. Can anyone shed some light on how the value of a site works?

[harleyx]

That's a pretty tough question, especially without a specific site to examine. There's alot to consider, and alot of it is very speculative. The main things most people use to value a site are:

traffic stats
domain name
the website itself (content, scripting, etc)
active membership (for forums, online services, etc)
inbound links

Having at least 6 months of revenue and traffic stats can help a whole bunch. For sites with ad-based revenue the general rule of thumb tends to be 12-24 months of profit, depending on how much traffic/revenue history you can provide, site maintenance involved, etc. Subscription based sites follow a similar formula, though I have no firsthand experience selling a subscription-based site.

You may want to stop by dnforum, or a similar website sales forum, and just read through the different developed websites for sale. Doing that for a few months gave me a good idea of how to evaluate a site's worth.

[napka]

Honestly, the site just made its first $5 from affiliate advertisements this month. We just began optimization efforts about three months ago and are averaging around 1100 unique visitors per month. Originally, we planned to charge for a service and then stumbled upon the world of external monetization. I guess it will be tough to project a value at this point. Thanks so much for the insight. It was a tremendous help for my understanding.

[Raymond]

For commercial site, your monthly profit (after all expense AND YOUR SALARY) times 12, plus your assets. That gives roughly 1 P/E. Not the most accurate, but it is close enough.

If your site possess something very valuable, but you just haven't found a way to capitalize it. The value depends on who you sell to. Say if you have a "legal and sellable" database of high income online users with their physical address and phone numbers...etc, Ogilvy will probably pay you an arm and a leg for it. The value varies greatly depending on how much money the new "buyer" can make from it.