Re: How to value a web site?

From: David Hammes, VP <dhammes_at_4internet.com>
Date: Mon, 11 Jan 1999 18:56:22 -0600 (CST)

There are many valuable resources. Garage.com (Guy Kawasaki)
is one. Red Herring has articles about this as does Business
2.0 and the Industry Standard.

Here are a few basics I am familiar with:

1). There is a value placed on the number of unique visitors
and impressions served. This can be determined simply by the
value of impressions as they are sold as advertising (actual
rates vs. rate card), and are around $15 per 1000 and 30%
sold.

2). There is a value determined by comparable business
models and their valuations. Identify close business models
and compare valuations.

3). There is a formula to determine value by actual and
projected sales. This can be 50 to 60 times current sales
and 15 times projected sales, (As long as the stock market
continues to favor Internet stocks).

4) Taking the specifics of each valuation model and
averaging it will give you another value.

These do not include the value of Internet 'realestate' or
domain name(s) owned.

In each case, the valuation will be discounted in proportion
to the comparable model i.e. if you compare your stats to
one of the major players, your particular valuation will be
in the same proportion as your company compares to the major
player.

This input is for a seller. A buyer must look at other
values as a purchase may add dimension to an exisiting
business, enhance traffic, customers or features without
adding to overhead, etc. (1+1=3).

Good luck!

David Hammes
dhammes_at_4internet.com


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Received on Mon Jan 11 1999 - 20:27:04 CST