Site sale with AdSense revenue

Theoretical question

[georgeek]

This thread [webmasterworld.com] raises an interesting subsiduary question. If a site has an AdSense revenue of $X/month what is the likely sale value of the site based on this factor alone?

[racer_x]

There are formulas for valuation businesses based on their revenue and/or profit. However these are specific to different types business.

I am not aware of any indepth study done on the valuation of web based businesses. For a website there are no real fixed assets. Of course there is value in the intellectual property of the web pages, configuration and any scripting. As well the goodwill a existing website has in attracting returning vistors and new vistors from search engines.

So based on similar advertising based small businesses. I would say the value would be 3 times the annual operating revenue.

Or 5 times the annual net profit. The is a real net profit, with person who is doing the work actually being paid a salary or wage. Some small businesses the owner does work but doesn't draw a salary so as to make the net profit look bigger than it really is.