Question About Site "WORTH" With Adsense As main Revenue.

[JStubblefield]

Hi everyone,

First off I am not trying to sell here just need some advice on how to value an adsense generating site of mine.

Just curious as to some members opinions about a site that I have owned since 2001.

I am possibly looking to sell and everyone should know these website WORTH websites or VALUATION sites are mostly bogus.. I mean most that I have tried value my site at what I make in ONE month..

Here's a few specs:

Online since 2001

Generating between $1,800-$2,400 per month via adsense.

Generating $60-$200 per month via CJ.com

Around 500 pages all original content or user submitted ads.

It is a vehicle classifieds site.

Sign-up for dealers and dealers able to post pics and all descriptions.

Number 1 or first page yahoo, google, msn, etc. results for many pages. especialy STATE SPECIFIC pages.

Lots of pagerank 4 pages and around 600,000 on alexa.com (yeah I know I need more backlinks..lol)

Blog

Videos area

Google Analytics code on every page..

and a lot more accumulated over the years..

The ONLY real draw-back of the site is I have never developed any php on the site so to even change one link in the menu requires a menu edit on all pages... which can be sped up using a search and replace program, etc.. I just never really wanted to "take away" from the old school feel of it and dont trust that rankings would NOT go down by doing things like this..

//////

So it makes over $20,000 per year since 2005.

All that is thru natural search engine results, 85% of visitors are from search engines. No money spent on further advertising to this point.

I'd just like to get people's estimates for what a site like this would be worth on the market.

Thanks everyone here I have been a user for a while but sadly, just a find an answer quick kind've user of this site up till now.

thanks in advance as I have no real idea where to start "valuing" my site for sell.

[edited by: JStubblefield at 7:18 am (utc) on June 17, 2009]

[IanCP]

This has been argued back and forth for years as far as I can remember.

Best sensible estimates were always around 3 months gross income. That was before things hit the fan.

Today? Who knows.

In the past the only people I knew who would sell were those anticipating terminal brain cancer and a very short life span left.

Of course your particular mileage might vary.

[incrediBILL]

I wouldn't sell a site like that for less than 6x months income but it's going to cost you 6x in lost revenue for the year as well.

What's the urgency to unload the site?

Sounds like a cash cow to me, something to keep running and enjoy the free money.

[JStubblefield]

Well Bill its nice having the money coming in every month but over half of that goes for bills and the rest is spent here and there. I would much rather take a lump sum, continue my education, get started on a house in these great buying times and move on to other things.

I am in the process of getting all the ducks in a row to present it for sell (history of the site, etc.)

Bottom line is I'm kind've tired of being known as the guy that doesn't have a real job. I spend too much of my life in front of this computer (This is just one of about a dozen sites I run, surprisignly this one pays the bills and I sort've take it for granted and spend the least amount of time on it, but it still produces) and for 9 years I've watched what my NON-VIRTUAL passions were in life pass me by.

[incrediBILL]

If half the money goes for bills every month then technically half your selling price lump sum will also go for bills as well.

IMO, you're better off holding it and starting a savings plan as you'll have more lump sum cash piled up in the long run if you're patient instead of losing the cash flow altogether.

FYI, real jobs are highly overrated. I quit the corporate world about 10 years ago and then sold off all my other biz ventures about 5 years ago and have proudly been "without a job" ever since thanks to the web.

If you think you spend to much time behind the computer now, wait until you get a boss...

[farmboy]

Well Bill its nice having the money coming in every month but over half of that goes for bills and the rest is spent here and there. I would much rather take a lump sum, continue my education, get started on a house in these great buying times and move on to other things.

If everything is as you have described, I agree with Bill. It doesn't sound like you're going to be able to get a large amount of money for this site anyway.

Just because housing prices are lower than they were a couple of years ago doesn't necessarily mean it's a good idea to buy now. You might wake up one morning a year from now and realize you have a monthly house payment due on a house with stagnant value and no longer have the income from this site.

Discipline yourself not to spend the AdSense income from this site "here and there" and save it towards a house down payment. Then you'll be able to purchase a home AND still have your site's income later if that's what you want. If you want, I can give you my opinion on why purchasing a home might not be a good decision for you at this time.

FarmBoy

[nomis5]

A few months ago, as an experiment, I tried to sell one of my sites. Rock solid, improving income and page views, around for seven years, 1,000 pages, double your income and a similar spread of income.

It was a total waste of time. Prospective purchasers viewed it as being just as risky as buying an 8 month old site with loads of incomprehensible and complicated code, leaky databases etc.

From my experience, you would be lucky to 6 months NET income for your site. And that is just not a viable option for you if things are as you say.

The experiment inspired me to develop that site further. Just to prove that I can add 50% to the income over the next year. And it can be done even in this climate.

[explorador]

JStubblefield, first congratulations for such achievement. Now tell us your secret (just kidding).

Your site has a very high Roi as I can see. I know Alexa is not to trust but I'm amazed the site works like that with that ranking. I have a site with 300,000 alexa ranking (pure organic traffic) and is far from those numbers.

I spend too much of my life in front of this computer

What about giving conferences, talks or something like that? perhaps at schools? you could keep your site and talk about it as a model case for study or as a pilot for motivation with young people or even webmasters.

That would take you out of the computer and keep you around people. I know a few friends who after few years got tired of their sites so they hired someone else... and now they give conferences, they love to talk and share.

Just an idea.

great for you.

[netmeg]

If you don't want the site anymore, you don't want it, and that should be all there is to it.

But if it were me, I'd hang on to it (it's earning a respectable income, this is not necessarily the best time to sell, etc etc) and work on ways to bring those costs down to 25% or less, and otherwise reduce the time I need to spend on it.

[dauction]

3-6 YEARS

Dont sell it for anything under that..

Sites selling for 3-6 months are junk..

Look at it this way..

Your site makes 20k and people are telling you it's only worth 3 months..

6.6k

If that were REALLY the case ..you should be a BUYER not a Seller.. buy 3 More sites (same quality) and you are now making 100K a year off a 20k investment

But we all know thats BS because no one in their right mind is selling quality sites based on 3 months income ..

I (was once not in my right mind lol) sold a site once for far to cheap..never ever do it again..

[farmboy]

I know Alexa is not to trust but I'm amazed the site works like that with that ranking.

How exactly is an Alexa ranking determined? Either it's reliable or it's not. And if not, why do people keep mentioning it as if it's worthwhile to mention?

FarmBoy

[RonS]

That website gives a few hundred dollar value for non-registered domain names, and says that webmasterworld is worth $6 million. Pretty amazing.

[netmeg]

There's no "exact" about Alexa (unless you're working for them) I get the impression they get a lot of their data from their toolbar. They probably have other sources as well. I've found it a reasonable indication of trends, but certainly nothing I'd base an offer for a site on.

[LostOne]

I couldn't see getting a real job if I ever sold my site. Never been very good working for others either. That link values mine at 4 months income, better than one I stumbled across a few weeks ago that said it's worth 2 1/2 weeks income.

[incrediBILL]

It valued my primary site at roughly 2x AdSense annual income, not bad :)

However, I earn way more than that and wouldn't see it that cheap.

[edited by: incrediBILL at 4:08 pm (utc) on June 17, 2009]

[Swanny007]

I would say value on your site would be a minimum of 2 years profit. I sold one site and got nearly 1 years' profit but it wasn't making much and I just wanted out.

[farmboy]

It valued my primary site at roughly 2x AdSense annual income, not bad :)

It underestimated the daily traffic to one of my sites by a factor of 100.

And it estimated the daily traffic to one of my domains without a site as being in the thousands.

I'm guessing it considers traffic as a factor in determining a value. Oh well, so much for that site's credibility.

FarmBoy

[dailypress]

I hear and read 6 months but I dont think that applies to every site.
I wouldnt give mine away for 3 years worth.

[martinibuster]

I've always understood it to be a multiple of several years. Doesn't make sense to sell a site for less.

[ken_b]

That valuation tool site gave some really wacky numbers for sites I'm familiar with. For my site the page views and visitors were way, way off the mark.

[vordmeister]

My own abandoned web design site is apparently worth £22k according to a site mentioned in this thread. Shows how difficult this sort of thing is to figure out.

It's tricky to value a site. If a buyer thinks it might not be sustainable past 3 months they'll not offer more than that multiple. A site built for the long term without any spammy promotion would probably go for a higher number of months income.

Sites you can leave alone will probably sell for more than sites that need constant updates from someone with specialist knowledge.

Question I'd ask is whether the site in question would make more if it were abandoned than is it were sold.

[incrediBILL]

I've always understood it to be a multiple of several years.

If it's solely based on AdSense, where you have ZERO control of the ads, that's way overpriced.

If they sold their own direct ads and didn't depend on AdSense, or sold products, or anything else, it would push up the valuation.

[edited by: incrediBILL at 10:06 pm (utc) on June 17, 2009]

[HuskyPup]

Hahaha...great fun tool:-)

It valued my site at one week's real-world B&M income...PVs and visitors were so far out (low) it is obviously selecting numbers at random!

[JStubblefield]

Thanks everyone.

In reply to Vordmeister
"Question I'd ask is whether the site in question would make more if it were abandoned than is it were sold. "

I don't really understand that it makes what it makes every month whether I touch it or not. When I do add content it naturally goes up.

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In response to Explorador:
"JStubblefield, first congratulations for such achievement. Now tell us your secret (just kidding). "

I do plan on participating on here I'm all self taught but I feel I have a lot to share.

------

Thanks to everyone for their responses, based on what I have found here and at other "reputable" forums I am thinking around 2 years annual income. The only cost for this site is the server at $75 per month.

I mostly base that on the history of the income and how the site is transferable without a skip in anything since I do nothing other than add a few pages here and there, so it is basically set it and forget it at this point.

From research I think I may build more "value" into it by opening another revenue stream. With the traffic we get, believe it or not we have never charged for ad listings. It's always been post your ad up for free. Perhaps I will update the design a bit and adjust it to atleast time-based listings for a small amount. And possibly making "ATLEAST" the menus for each page editable from one page (php include perhaps) instead of hand coding each page on a menu change would bring it up to speed in that area.

Once again everyone thanks for your thoughts especially those that have "been thru it".

See ya on the boards!

[edited by: JStubblefield at 7:26 pm (utc) on June 17, 2009]

[YieldBuild]

I think it's interesting what values the public markets are putting on sites that get most of their traffic from natural search. Look at Answers stock symbol answ. They did $16M over the last 12 months, are growing quickly and are valued at a market cap of $55 Million. They also just received $7 Million in cash for warrants, so they have close to $20 million in the bank. Not a real sophisticated analysis, but fast growth, profitable, and 40% of the market cap in cash. That values it at roughly 2X gross revs. For a business that isn't growing, I'd expect a discount. Or maybe answ is grossly undervalued - I'm long enough SEO wise, but if you want exposure to the google rankings, just pick up a few shares:)

[Edge]

Your site makes 20k and people are telling you it's only worth 3 months..

6.6k

If that were REALLY the case ..you should be a BUYER not a Seller.. buy 3 More sites (same quality) and you are now making 100K a year off a 20k investment

Total return of investment in three months? Where do I send the money!

[incrediBILL]

I am thinking around 2 years annual income

If you get that for a strictly AdSense site I'd be shocked, but what do I know.

I once bought a full blown ecommerce site including inventory for less than 2x revenue, and it had tangible value in the inventory.

[JStubblefield]

Hi Bill,

I understand about buy low sell high.. heck I was a car dealer for many years..lol

But I do know I'd hate to be stuck in the lick the stamp and ship it business...

[edited by: JStubblefield at 12:06 am (utc) on June 18, 2009]

[graeme_p]

Answers is very unlike most content sites:
1) They license content (so they have lower margins than a site that generates its own content or buys it outright)
2) They are big enough to be listed.

Also, does that market cap number shares issued on recently exercised warrants? Have the convertible prefs been converted yet? If not, how big is the adjustment needed?

[graeme_p]

If you get that for a strictly AdSense site I'd be shocked, but what do I know.

I once bought a full blown ecommerce site including inventory for less than 2x revenue, and it had tangible value in the inventory.

An evergreen or user generated content site can have very high margins, so is likely to be a lot more profitable than an e-commerce site with the same revenues.

It was a total waste of time. Prospective purchasers viewed it as being just as risky as buying an 8 month old site with loads of incomprehensible and complicated code, leaky databases etc.

Yet more evidence that it is not worth selling content sites if they are any good. I would keep it and keep making money but stop working on it and let it stagnate, or hire someone to run it for you.

If neither of the above will work, then it really is worth the low multiple.