Forum Moderators: martinibuster
FOR EXAMPLE (THESE AREN'T TRUE FIGURES)
If you had a site with
10,000 pages (5,000 indexed with google as being unique).
Had 5,000 unique visitors a day.
Had 100 clicks averaging $1 a click = $100 a day
making $36,500 a year.
What would the site be worth?
As I say this is a hypethetical question but it would be nice to hear different views.
For what it is worth I think you'd have buyers around the $50,000 region providing you could see stats.
ricey
The important thing is that risk is one element in determining what a site is worth, and the risk associated with a quality content site on a topic that can be monetized in a variety of ways is likely to be less than the risk associated with a site that depends on a single revenue stream and a constant supply of new users from search engines.
Any site, however anyone describes its quality, is more desirable when it has low risk and multiple revenue streams and less desirable when it has high risk and a single revenue stream. A site that you may not consider a "quality content site" may be preferred over a content site if it's not reliant solely on the Google algo and Adsense (like most content sites out there).
Also, I don't talk about non-existent sites or models :)
BTW, something else to keep in mind when asking "what is a site worth?" is why the buyer wants it. If a buyer wants a site for strategic reasons (market share, to keep another competitor from getting the site, to acquire a coveted doman, to gain access to specific technology, etc.), then it may be worth more than its immediate or long-term earnings potential might suggest. When Gannett and the Tribune Co. each bought a 25% stake in Topix.net, for example, they didn't do it just for the AdSense income.
Give me a budget of $50k to start up my own NEW site and I'll have a much larger site than that within a year or two. There's no barrier to entry, what makes a site worth $50k when you can otherwise spend that money to do the exact same thing?
There are a few things that can cause a site to buck the market trend. If it has something valuable like a copyright or patent that has never been exploited, a unique position in the marketplace, or if its very existence is a thorn in somebody's side - it may fetch a higher net profit multiple than most other sites in the market. Then there's the pending court case with the potential for a massive pay-out, a two-letter dot com domain, the world's largest opt-in mailing list of mesothelioma lawyers... other things can add value. Content is not the be all and end all. :)
But, those are rare exceptions. Too often webmasters read about these exceptions (or Google's net worth related to their revenues last year) and get excited. Usually their excitement is shortlived. 12 x is pretty much where it's at no matter what owners of content sites may want you to believe.
woop01, it's about "time" too. If it's going to take you $50K and 12 months to achieve what you could have now for $50K....
If it's going to take you $50K and 12 months to achieve what you could have now for $50K....
On the other hand, if you think you can continue earning $50K per year after 12 months with what you've built, why sell?
This ups the ante and makes the business a whole new ballgame, in my opinion.
WisdomSeeker
when i wanna sell, its usually 6 months revenue.
there are no set rules in it.
scraper is not a swear word and some scrapers are indeed great sites. It's often argued that the SEs themselves are scrapers at heart. I wouldn't mind owning the Google "brand" :)
Therein lies a big risk. You have referred to at least three categories of sites in your post, using the term 'scraper' to apply to them all.
However, the most popular (and probably legal) use of the term "scraper" is for a website that makes unauthorised use of another site's (copyrighted) content. This excludes the other two categories that you've included: Search Engines, eg: Google, and other with-permission compilation sites (WPCS, for want of a better phrase, or is there one?), eg: Shopping. Pardon the vividness of the analogy, but lumping them all together is akin to claiming a murderer is no different to a chef because both use knives to cut meat.
Future risks associated with scraper sites are very different to those associated with SE or WPCS. The inherent value of a site ought, like shares, to reflect the long-term prospects of the sites. SE, WPCS, and original content sites, because of their growth potential, should all have much greater intrinsic worth than scraper sites, which are entropic.
if you think you can continue earning $50K per year after 12 months..
There are a lot of things that "ought" to be, but aren't. It's not about future risk per se, it's about perceived risk. And if you spend a few hours at the main site selling forums you'll probably see that the market is pretty clear on 12x net monthly as a fair price for most established sites.
Don't shoot the messenger.
And if you spend a few hours at the main site selling forums you'll probably see that the market is pretty clear on 12x net monthly as a fair price for most established sites.
1) Not all sales occur through such channels.
2) Not all sales result from the owner hanging out a "For Sale" sign.
3) Not all purchases occur for the same reasons.
4) Some of us have no interest in selling, at 12X net monthly earnings or any price. :-)
Not all sales occur through such channels
Some of us have no interest in selling
See, I complete agree that content sites should be worth more. I have content sites that I wouldn't sell for 48x. I've paid large sums of money to put together content and have done a considerable amount of writing myself. I understand where you guys are coming from. My point is about what's happening in the market rather than what should happen.
If you want to know how much your site/s is worth, it's fairly simple to find out. Put it up for sale/auction and see where the bidding ends. That's it, really. You don't have to sell at that price but that's the cheapest and most effective way of getting your site valued.
And the going market rate shouldn't really bother you :)
I'm not bothered at all, since I'm not selling. :-)
And I'm not questioning your remarks on how the "going market rate" is calculated; I'm simply saying that not all sales are determined by the "going market rate." That's why your method of calculating worth (by putting a site up for sale or auction) is of limited utility: It determines market worth only for sites whose owners are looking (or pretending to look) for buyers.
It's like anything else: If an employer is recruiting a specific and highly desirable person who isn't job-hunting, the employer will almost certainly have to pay more (and be willing to pay more) than he'd pay to hire an out-of-work person who's looking for a job. If a street vendor in Mexico knows that a tourist really, really wants the one grey goatskin rug in his stall that's filled with brown goatskin rugs, he'll be able to get more than he would for a brown goatskin rug. In such cases, the law of supply and demand trumps market averages.
For the buyer the economics is the same whatever category of scraper you put the site in.
This point genuinely puzzles me.
On the one hand, it's not unusual for businesses to be valued according to the industry-standard multiple (of revenue, or of earnings). But on the other, there can be many issues raised in the due-diligence process that scupper such sales or reduce the valuation.
If I were buying a website, I would certainly consider an SE or WPCS (With Permission Compilation Site) on similar terms to an original content site. But a 'scraper' (using the narrower definition than you are using) could have many skeletons in the cupboard, such as potential litigation arising from copyright theft.
The lack of clear differentiation between these types of websites therefore both puzzles and concerns me. Perhaps it rather bluntly depresses the whole market for websites rather than having different rates for sites with different risks and prospects.
The lack of clear differentiation between these types of websites therefore both puzzles and concerns me.
It should also depress you. Because I've seen scrapers of the worst kind represent less risky propositions than some of the content sites I've been offered.
How many scrapers do you know who've been sued? Is a scraper more likely to be sued than the owners of official-google-adsense.com?
Because I've seen scrapers of the worst kind represent less risky propositions than some of the content sites I've been offered.
Well, of course. No matter how good the content might be, the wrong topic aimed at the wrong audience isn't going to generate much revenue. The type of content can be a factor, too. And if the site depends entirely on the "brand appeal" of a 90-year-old person with Alzheimer's who's had three heart attacks (think Matt Drudge 50 or 60 years from now), the site isn't going to be worth much. :-)
The lack of clear differentiation between these types of websites therefore both puzzles and concerns me. Perhaps it rather bluntly depresses the whole market for websites rather than having different rates for sites with different risks and prospects.
Even if it just depresses prospective sellers expectations it might work out fairly well for buyers.
In non-auction situations the exact same thing happens for any good site: There are a number of suitors all talking to the seller with each taking his offer up to a maximum of his own ceiling.
If anything depressing sellers' expectations causes less sites to come up for sale. And that's not really in any buyer's interest.
If anything depressing sellers' expectations causes less sites to come up for sale. And that's not really in any buyer's interest.
oddsod, another 'puzzling' thing that has occurred to me in this thread is the fact that people sell sites at all. For example, our site currently earns at the rate of around $80,000 to $90,000 per annum from Adsense (that's nothing new to this forum, as I've posted our monthly earnings before). Its a static content site, so if we walked away we'd probably still continue to earn at that rate, though it might decline slowly if we don't update it to reflect changes in Google algos and/or visitor patterns etc..
To get a passive income of that scale, I'd need a lump sum of at least half a million dollars, probably more. Although one could argue that there is a greater risk with a website of the income collapsing than with other forms of investment, that needs to be set against the fact that our site has experienced continued visitor growth for over a decade.
In that context, the only circumstances I could envisage anyone selling a site are either (a) they are so desperate for cash that they are willing to let it go cheap, (b) they think that the income is going to collapse in the near future or (c) that the site is dynamic and requires a lot of work to keep going. But perhaps that is because of my lack of imagination or experience in this field.
So, why do people sell websites for what is patently much, much less than the "asset value" the website represents?
Incidentally, as far as our site is concerned there is another factor, that there is still much (complementary to Adsense) revenue-generating potential that we haven't yet realised. But, for the sake of this argument, let's lay that aside.
As for scrapers, Google and the other search engines work very hard to keep true scrapers out of their search results. Such sites have a short effective lifespan and obviously represent a very very risky investment.
Note that I said "true scrapers" above. I'm not really interested in debating whether Google, for example, could be classified as a scraper site by some trick of semantics.
why do people sell websites for what is patently much, much less than the "asset value" the website represents?
Market sentiment decides how much to discount for the perceived risk. The "asset value" you talk about is maybe a concept more appropriate to B&M property.
Why do people sell at all?
Hmm, there could be a million reasons. If I had all my sites in the Adsense basket and they were collectively making $80K a year and I had no other sources of income... you bet I'd want to divest myself of a few. And use that money to buy an ezine with 50K double opt-ins. Or a network of affiliate sites. Or a collection of ebook copyrights. Or some physical property.
>> virtually nobody ever does sell their website
That's why all the buyers in this thread should get out of the market! Seriously, leave it. Find something else to do :)
I started by reducing ad blocks from 4 to 2 and then to 1. If the pool of advertisers is small for your site, and the advertisers all bid only pennies per click, you are better off taking the ads off that page, or banning the advertiser. I have done both. By only having one ad on a page, and looking at the pages that are getting bids of less than .25, you can tell which advertisers want to be on your site, and what they are willing to pay per click. If you don’t like the amount, Remove the ads and/or ban the advertiser.
I now have a fraction of the ads I use to and have banned many advertisers. Including the ones that have scraper sites. These people bid .01 on your site to suck off your traffic in hopes that they can make .02, which IS a living in some countries, but not in the US. Our site gets over 40k page views per month, small, but we use to produce 15k clicks a month. Now since we removed the ads, we produce something 60 at a price we consider fair.
I just keep removing ads and advertisers and will till revenue is acceptable for us. Even if that means removing all Adsense ads, then so be it. The advertisers know who we are and can contact us directly for ad placement. As a matter of fact, you could lose direct ad revenue from advertiser because if they can advertise cheaper thru (G), they will. I predict that by Feb 1st, we shall no longer have Adsense ads. If everyone took the same route, soon (G) will only have ads running on sites where $100(US) a month is a living, and that could cut even more into the quality of the pages displaying the ads, thus there is a potential of Adsense ads becoming worthless, and that WILL cut into their stock prices.
You have no choice. Remove the ads, or grin and bear it. Complaining isn’t going to do squat.
I feel that it is asinine for any REAL business to run the ads any longer. Your ONLY choice is to remove the ads.
Um....What if the real business is making real money with AdSense? Why would it want to remove the ads? (And aren't we drifting waaaaay off topic here?)
Heck, I think 2x would be very fair.
And the going market rate shouldn't really bother youI'm not bothered at all, since I'm not selling. :-)
EFV, actually, you don't need to be a seller to talk the price up. You could be looking to raise cash using the website/business as security, you could be looking to attract a partner, and even if none of those apply, people have forever derived a deep satisfaction from seeing their property appreciate in value.
Skaffe recently put the wow directory up for sale (mods, please delete if not allowed) and, interestingly, a competitor actively searched out threads about this sale and tried to talk the price up in every one, especially his own forum (where "rumours" joined the shill). Why? Because of the spill over effect. If I can push prices up in my area then I stand to gain even if I am not looking to sell my property now.
Anybody who is not a buyer has more incentive to talk the price up than down.
I made a sound suggestion earlier: If you want to get your site valued put it up for auction and buyers will value it for free. I'll make another suggestion now: It's easy to see who's bluffing. Those believing that five years of net income is a fair price should be delighted to buy your Adsense site at 24 x months. Try them. Not one biting? Hmmm. Go back to suggestion one ;)
It's easy to see who's bluffing. Those believing that five years of net income is a fair price
I think that's a misleading question, because you used the expression "fair price".
What you are saying - which I and presumably most others would accept - is that the current market price is about 12 months of earnings. Whether it is a fair price depends on other factors, and there are many markets where prices are depressed below 'fair price' for lots of reasons.
I think the bottom line is that it's currently a buyer's market. Anyone thinking of selling would probably be better off retaining their websites unless there are really compelling reasons to do so.
And the example you gave of diversifying doesn't seem compelling to me. One only needs to wait a short time and enough cash would be raised to diversify without having to divest oneself of the current website portfolio.
there are many markets where prices are depressed below 'fair price' for lots of reasons
For all practical purposes "fair" describes what the market supports at a given point in time. It's "fair" in the current market climate.
Any other definition of "fair" - or if "fair" is entirely subjective - sellers may never agree a figure with buyers. Ever. Add 10% to any seller's price and he'll still feel it's a fair price :)
One only needs to wait a short time
