Re: How to value a web site
Last year I started writing an article dealing with the
valuation of web sites. It can be found at:
http://www.websitebroker.com/valuation.html on our
WebSiteBroker.com site (which actually deals with the buying
and selling web sites). Basically, as many others also
mentioned, there are many factors to consider in determining
the value of a site (some more important than others
depending on the site). Some of the factors include:
A.Profits and Cash Flow
1.Source of Revenues
2.Operating Costs
3.Growth Multiple
B.Assets
1.Technology
2.Content
3.Branding
4.Databases
C.Traffic
1.Number of "hits" per day
2.Ratio of visitors to page views
3.Number of Links to the site from other sites
4.Percentage of traffic from search engines versus traffic
from other links to site
5.Placement for relevant key words on search engines and
historical performance data
6.Traffic growth per month in last year
7.Access statistics available for what period of time?
8.Automated messages
9.Does site use cookies
10.Are there mailing / discussion lists associated with the
site?
D. Motivations
1. Sellers motivation for selling
2. Buyers motivation for buying
Each of these sections (except D) is discussed in greater
details in the article. I also created a simple Excel
spreadsheet template helpful in determining the value of a
web site. It can be found at:
http://www.websitebroker.com/forms/forms.html . Please note
that both the article and the spreadsheet are works in
progress and I soon intend to incorporate some of the very
interesting issues raised by others in this discussion.
As a final note (and from personal experience) I think that
sometimes the price boils down to how much the seller is
willing to take and/or how much the buyer is willing to pay
and what each parties motivation is.
Bahman Eslamboly
broker_at_websitebroker.com
http://www.websitebroker.com
Buy, Sell and Trade Web Sites.
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Received on Wed Jan 20 1999 - 06:25:27 CST
