| The evolution of website marketplaces means there | | | | Whilst it's impossible to create age, you can, if building |
| are now many opportunities for you to sell your | | | | your site from scratch, buy an aged domain (a domain |
| established website. | | | | that has been registered a while ago) and use that as |
| Before you place a down payment on a new yacht, | | | | a starting point to help give you some much needed |
| or buy that luxury Hamptons Beach house you should | | | | gravity in this department. |
| know the value of your site and ultimately know what | | | | Page Rank |
| to expect to receive when you sell i.e. you will need a | | | | People dispute whether Page Rank (PR) has any real |
| website valuation. | | | | 'value' and how it's a factor in valuing a site for sale. |
| Obtaining an accurate website valuation is difficult as | | | | My logic is that it matters to so many people, it WILL |
| there is no standard way to value web businesses. | | | | affect your website valuation for several reasons |
| The aim of this article is to give you some starting | | | | 1 - Higher page rank theoretically means it will be |
| points on which factors people will generally use to | | | | easier to rank for competitive keyword terms and out |
| assess your site and hopefully show you how to | | | | do your competition |
| increase the value by improving on these points. | | | | 2 - Page rank creates additional revenue in markets |
| Revenue | | | | where you can easily sell links on sites with a decent |
| Revenue is possibly the most widely used factor is | | | | PR |
| valuing a site for sale. A common way of quickly | | | | 3 - Page rank implies trust, and if Google trusts a site, |
| valuing sites for sale is to use a revenue multiple which | | | | then there's a good chance that others will too. |
| is simply multiplying your gross monthly revenue to | | | | Regardless of whether page rank does have an |
| derive an approximate figure. This multiple can vary | | | | effect on your site, it does affect people's perception |
| from between 4x in some niches to 12x in others, and | | | | of its value and should therefore be considered an |
| there are sites that will tell you average multiples for | | | | important attribute. |
| various categories. People look at sites that generate | | | | Domain Extension |
| revenue as proof that the business model is proven to | | | | The type of domain you choose (for example .com or |
| work and inevitably healthy revenue means an | | | | .co.uk) has a profound effect on your website |
| investor can recover their investment in short period of | | | | valuation too. The most valuable domains to a buyer |
| time. | | | | are .com, .co.uk, .org, and .net (excluding academic and |
| Traffic | | | | government domains which would be extremely |
| Traffic can often trump revenue, if a savvy investor | | | | valuable IF they were available!). Two sites with |
| can recognise a website has been under monetised | | | | everything above being identical will be valued |
| and hence undervalued. For example, a standard RPU | | | | differently if one has extension and the other a.cc |
| (revenue per unique visitor) in the internet marketing | | | | or.info one. |
| niche is $0.20 and above. If site A and site B operate in | | | | Valuation Methods |
| identical markets, and site A has a revenue of $100 | | | | There is no common valuation method as there is with |
| per month and 1,000 visitors whilst Site B has $20 per | | | | a traditional offline business, but people sometimes use |
| month but 10,000 visitors, an investor may purchase | | | | a financial calculation referred to as Net Present Value. |
| Site B for less money, knowing what she can achieve | | | | In my opinion, this method is flawed as it ignores the |
| with 10,000 targeted visitors every month. | | | | dynamics of online businesses and makes the very big |
| Domain Age | | | | assumption that people will have all the information |
| Without a doubt, Search Engines respect age. Sites | | | | needed to make it work; this is seldom the case. |
| that have been established longer will usually trump | | | | The most realistic method of valuing a sub $100,000 |
| newer sites when attempting to rank for the same | | | | site is simply to compare it to similar sites that have |
| keywords and so age is an important factor in how | | | | recently sold as this will give the most accurate picture |
| valuable a site is to someone. This is also a 'double | | | | of what the market is willing to pay. |
| edged sword' as older sites instill trust in buyers | | | | Simply do your research and know what buyers |
| because they see history of traffic and revenue which | | | | perceive as value, and you will soon be on your way |
| is much harder to fake than a site with only a couple | | | | to a successful sale. |
| months records. | | | | |