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l008com · Feb 24, 2005, 04:14 AM

How much is a web site worth? Someone has made me an offer on one of my web sites. And its funny cause I have absolutely no idea what to ask for it. I make about $1500 a year in ad revenue. And traffic is always growing so thats only going to increase more and more as time goes on. But what gauges do you use to measure? Its good cause it takes very little of my time, so its like income that comes in weather I work or not. And so its not like selling a business where you get a lot of cash and no longer have to work. I'm essentially already not working :-). I wonder what others think about this?

Nivag · Feb 24, 2005, 04:48 AM

unless it was stupid amounts of money i wouldn't bother in your case. if it was a hassle in the up keep i would be tempted. but 1500 is a nice amount of extra beer vouchers per year.

l008com · Feb 24, 2005, 04:53 AM

Yeah but this person claimed he'd be willing to offer me 12X my revenue. Now he didn't specify if he meant yearly, but if he did, and he understands how much I make, he would be offering me ~$20,000

Big Mac · Feb 24, 2005, 04:54 AM

Congratulations on the offer. A website is like any other enterprise, containing both tangible and intangible assets. Do a rough assessment of its worth - you know better than anyone else about the particular situation - and see if the offer made is fair. Create a balance sheet. If you find you derive greater benefit from the site than this individual is prepared to pay, then obviously don't sell. I know you probably don't need common sense suggestions, but that's the best I can think of without more information.

Nivag · Feb 24, 2005, 04:57 AM

20k is a tidy sum, what's the domain name? do you use for anything else other than Ad revenue? if you do then that 20k may not seem so good in the long run.

l008com · Feb 24, 2005, 05:02 AM

Your common sense suggestions lead me right back to the original post. How do you figure out how much a web site is worth? The only expense is $25 a year for the domain name. I host it off my own server. So its all ad and affiliate income. You know the emails were very unprofessional anyway so I doubt the guy is even serious the more I think about it, but putting that aside for now... I don't know. $20,000 cash could go a long way for me. This site is my only popular web site though, with out it all I'd have left is all my small niche web sites. I guess this is the payback for running this site for the first 3 years, making zero money from it, just paying hosting and domain name fees. I always knew eventually the traffic would start making me money.

l008com · Feb 24, 2005, 05:04 AM

www
[dot]
whats
my
ip
[dot]
org

Yeah i know that was annoying but with good reason...

Big Mac · Feb 24, 2005, 05:22 AM

Originally posted by l008com:
Your common sense suggestions lead me right back to the original post. How do you figure out how much a web site is worth? The only expense is $25 a year for the domain name. I host it off my own server. So its all ad and affiliate income. You know the emails were very unprofessional anyway so I doubt the guy is even serious the more I think about it, but putting that aside for now... I don't know. $20,000 cash could go a long way for me. This site is my only popular web site though, with out it all I'd have left is all my small niche web sites. I guess this is the payback for running this site for the first 3 years, making zero money from it, just paying hosting and domain name fees. I always knew eventually the traffic would start making me money.

Cool site, John.

If this guy is seriously prepared to pony up $20,000, I would most likely take the money. You would be getting nearly a decade and a half's worth of your current ad revenue right away.

l008com · Feb 24, 2005, 05:27 AM

It would be very easy for someone to significantly increase ad revenue by whoring out with ads. My belief is that the reason it got so popular and so many people like it is because it doesn't attack you. There are some simple static ads and links but nothing crazy, nothing thats going to pop up or move etc. My point is that it would make sense for someone to pay that much for it if they were serious about trying to increase profits from it.

Diggory Laycock · Feb 24, 2005, 06:18 AM

Companies are generally valued (for purchasing) at 10x current annual earnings.

Interesting that you have been offered *just* over that....

Apple Pro Underwear · Feb 24, 2005, 06:23 AM

SELL IT.

BUY PROPERTY with the money.

start a new website.

AssassyN · Feb 24, 2005, 06:39 AM

$20k?! Sell it man!!

mitchell_pgh · Feb 24, 2005, 08:57 AM

Take the money and run... and don't look back.

step 2

start another site just like it

DeathMan · Feb 24, 2005, 11:57 AM

I'd say sell it, and start another venture that has more potential for earning. $20k could fund a pretty decent web-app, if you just figured out a good idea.

sworthy · Feb 24, 2005, 04:47 PM

basic finance says:

What's better, $1,500 a year for x years, or a $20,000 lump sum?

First, figure out an estimate for the number of years your advertising commitments and willingness to hold on to the site are viable. Once you determine the year, the next variable to consider is your potential gains in other areas (in finance lingo, known as the discount rate). If you invested in the stock market, a good estimate is a 7.5% (fairly conservative) return.

You can then use a net present value calculation (NPV). If you're lazy, do it in excel.

edit: oh yea, factor in the growth as well by manually increasing revenues at whatever rate seems realistic.