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Website value

     
6:14 pm on Jul 21, 2005 (gmt 0)

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Question on the value of a website with an intent to offer it for sale. It grosses $100K a year, with operating expenses of about 1/2 of that, or a net of $50K. It is almost advertising driven, and has been around for 5+ years. The advertising sales are a pain and something that I hate to do, but a young go getter would have unlimited potential. The site receives about 40,000 uniques a month and 4,000,000 acceses a month.

Is there a "norm" established to determine a base value for something like this? This site has just sort of grown from a hobby into situation where it really needs (could) go onto the next level, but I have not the desire or time to do it, nor the desire or need to open an office and hire people.

Is 2 times gross, 3 times gross, 4 times gross a good guess..... if not what would your thoughts be.

Thanks and I appreciate any info into past experiences.

6:21 pm on July 21, 2005 (gmt 0)

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Check this [webmasterworld.com] thread out
11:00 am on July 22, 2005 (gmt 0)

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The issue of it being a website aside I think there are two ways to sell anything.

1. Decide what price you want for it, advertise it at a little bit more and then negotiate down to the level you are happy with. Don't worry about what is 'reasonable' the market will tell you that.

2. Decide on it's mental value to you, perhaps it is 0, though it sounds like it'll be a minimumof 100K, and then advertise it as a 'make me an offer' sale.

Two other things to bear in mind. If I bought your website (not that I'm in the market!) and then rang you up and told I was turning over a million, or five million or ten million, would you be annoyed? At what price would you think to yourself 'Oh well, I could have done that but I didn't want to do the work. I got a decent enough amount of money for the work I wanted to do.'

Also, think of it as selling a business. My Mum and Dad run a B+M business and once had valued. I think it was at two times the turnover. I know the issues of an online business can seem very different but they are not really, at the root of it is the queston, can I make any money? You are talking about selling to a business person who will have to employ people and run an office, so you will probably get realistic offers from realistic businessmen if you approach offline markets as well as online ones.

Good Luck.

10:48 pm on July 22, 2005 (gmt 0)

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thanks Meg and bnhall for the thread. The question centers around this. Another year will almost definitely increase revenue (which will mostly be pure profit) and it should also definitely increase the value of the site (which has a companion printed magazine by the way). But it is sort of like the guy who opened a fishing tackle store because he loved to fish. He got so wrapped up in the store he never fished! I guess it is a good problem to ponder, but it seems like the dot.coms are back in the limelight at lease for this week. By the way, my website got started after a brain cell clicked in the last dot.com craze. I guess it is the old mid life crisis setting in. Kids are about done with college, and I think I see a light at the end of the tunnel. But everytime I have seen that light before, it has been another train barrelling right at me! Thanks again for the input, and any others that might wish to contibute thoughts or experiences. you can drop me a note at midamericaoutdoors@yahoo.com
 

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