Derrick
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There are often questions as to how much a website is worth or what the value of a certain domain name or web service is. Recent acquisitions in the online space – typically YouTube and MySpace – have highlighted the importance of accurate website appraisal methods.
The significant Microsoft investment in Facebook further made people scratch their heads as to whether this social networking site could really have a value of US$ 15-Billion.
While the value of traditional businesses are somewhat easier to establish because of the many years dedicated to refining the methodology for evaluating these brick-and-mortar models, the online space is still in its infancy which makes it very tough to accurately predict the true value of a website. There are however some clues.
Standard metrics like unique monthly visitors, page views & time spent on the site, yearly revenue & profit, current growth, number of backlinks, search rankings, earnings per visitor and visitor loyalty are all prominent issues when looking at a site’s value.
Other, less predictable factors, however also play a vital role. These include potential future growth, competition in the market where the website operates, whether the site has multiple revenue models and the difficulty in re-creating the website and brand.
While we may have a broad overview of what should be used to evaluate the current value of a website, the accurate weighting of these components is definitely not easy to establish. It is also likely that the value of a certain website is very specific.
There are luckily some indicators which have been used in the past. These indicators do not take many factors other than revenue into account (typically growth, unique visitors and page views), but they do provide an accurate measurement to sites that have been sufficiently monotized.
An estimation by Ventureplan:
6 x Trailing Twelve Month Revenue for content websites
3 x Trailing Twelve Month Revenue for content websites
An estimation by Buysellwebsite:
(12 x (Net Income Average)) + 12 x (Unique Visitor Average x Unique Visitor value)) x 1plus the content value = High Value for Website
(9 x (Net Income Average)) + 9 x (Unique Visitor Average x Unique Visitor value)) x 1plus the content value = Low Value for Website *Unique visitor value = 1/2 the value of the top fifteen bid placements on Overture for relevant keyword
I however prefer the following online calculator which makes use of a wide range of metrics. It is easy to use and gives a very rough estimation at the end:
http://www.glurk.com/
For a more comprehensive article on the value of a website be sure to visit http://www.stuntdubl.com/2006/02/20/website-valuation/
BTW: Any budding millionaires out there?
The significant Microsoft investment in Facebook further made people scratch their heads as to whether this social networking site could really have a value of US$ 15-Billion.
While the value of traditional businesses are somewhat easier to establish because of the many years dedicated to refining the methodology for evaluating these brick-and-mortar models, the online space is still in its infancy which makes it very tough to accurately predict the true value of a website. There are however some clues.
Standard metrics like unique monthly visitors, page views & time spent on the site, yearly revenue & profit, current growth, number of backlinks, search rankings, earnings per visitor and visitor loyalty are all prominent issues when looking at a site’s value.
Other, less predictable factors, however also play a vital role. These include potential future growth, competition in the market where the website operates, whether the site has multiple revenue models and the difficulty in re-creating the website and brand.
While we may have a broad overview of what should be used to evaluate the current value of a website, the accurate weighting of these components is definitely not easy to establish. It is also likely that the value of a certain website is very specific.
There are luckily some indicators which have been used in the past. These indicators do not take many factors other than revenue into account (typically growth, unique visitors and page views), but they do provide an accurate measurement to sites that have been sufficiently monotized.
An estimation by Ventureplan:
6 x Trailing Twelve Month Revenue for content websites
3 x Trailing Twelve Month Revenue for content websites
An estimation by Buysellwebsite:
(12 x (Net Income Average)) + 12 x (Unique Visitor Average x Unique Visitor value)) x 1plus the content value = High Value for Website
(9 x (Net Income Average)) + 9 x (Unique Visitor Average x Unique Visitor value)) x 1plus the content value = Low Value for Website *Unique visitor value = 1/2 the value of the top fifteen bid placements on Overture for relevant keyword
I however prefer the following online calculator which makes use of a wide range of metrics. It is easy to use and gives a very rough estimation at the end:
http://www.glurk.com/
For a more comprehensive article on the value of a website be sure to visit http://www.stuntdubl.com/2006/02/20/website-valuation/
BTW: Any budding millionaires out there?