Website valuation. What would you sell your site for?

[philipwhite]

After reading another post here I was wondering what you thought your sites were worth and how much you would sell them for? I think its an interesting topic because we all remember the internet bubble. Internet companies that sold nothing and were valued at hundreds of millions of dollars. Well a lot has changed since then and valuations are probably more realisitic.

[Peter T Davis]

I've bought websites for as little as $40, that I'm making hundreds a month on now. There are a lot of variables I consider when buying a site, and I do more buying of websites than selling. I generally like a deal on a site when I think I can make back the initial investment within a month or two. Most of the sites I buy are in this range, but they're mostly small sites that other people would overlook the value. On larger, more established websites with proven revenue, of course I'd be paying much more than that. When I'm selling a website, it generally depends on how motivated I am to get rid of it. I recently sold www.osforge.com for example. I wasn't bringing in any revenue on it, mostly because I hadn't invested any time into managing it. I sold it because I didn't want to put the time into it, but it's a very nice site and I got a four figure selling price for it. But, that was just slightly more than I paid for the site when I bought it in the first place. On both the buying, and the selling end of it, revenue or potential revenue didn't play a role. I bought it for a bargain price, and I sold it for a slightly higher bargain price.

You thinking of selling mba-forums.com?

[philipwhite]

Only if your willing to pay off my car and my student loans. Right now its a fun site to keep arround.

[thebassman]

Just curious, but I'm mildly surprised that this site and mba-forums.com makes that much money... I'm kinda a newbie to this sort of stuff, but I would love running a site like this. Is there actually money in it, or is it more just for fun?

[Peter T Davis]

For me, this site is more for the fun than the money. I don't make enough on this site to pay for either my car, or my student loans, to use Philip's example.

[OhioDave]

This is a very interesting topic to me as well. Peter, How do you make money on this site? I have not seen any advertisements and joining is free. I am not seeing the flow of money. I could maybe see it as increased traffic to other revenue generating sites that you own, but as for this site... $0.00, fun, maybe even a hosting cost lose.

Also, How do you value a website? Is there a formula you use? Number of visits per day, repeat visits, revenue generated from the site? I'm guessing it is a mix of the above combined with experience and gut feelings.

[Peter T Davis]

Heh, if you haven't seen ads on this site I must not have made them large enough. Actually, I do prefer discreet advertising on my sites, when I do a redesign I'll probably make them stand out a bit better. I'm not selling advertising as aggresively as I could on this site though, I don't want to drive people away. Making money on a site really just takes knowing what you're doing.

I don't have any formula on valuing a site. I do consider traffic and revenue, but that's not all. If there's content that comes with a site, that's a consideration. The site design may be a consideration. Where the traffic comes from is a consideration. I also consider the PageRank, and the domain name, how long the site has been around, whether there's a membership, a mailing list or newsletter. Another very important factor not many people include is how much effort it will take to operate the site. For example, I put a lot of time and effort here at SBF. Far more effort than whatever revenue I make on it warrants. Forums in general are a lot of work. I see a lot of people wanting to start up a forum, but they don't stop to think how much effort you need to put in to a forum to make it successful. People who start up a forum with the hope of making good money are usually quickly disappointed and give up. I look at maybe a dozen forums for sale each week, and it's always the same story; a dead forum and the owner didn't want to put in the effort. Most of the sites I take over, or develop, are designed to have a minimum of involvement from me. Usually, I can contract out all the work easily, it's just a matter of making sure the money coming in is greater than the money going out.

[thebassman]

I really enjoy forums, and would like to own/manage one myself... I'm quite sure I can put the time and effort into it, though obviously I would want to create/buy one that I am interested in. Where do you look to find the "dozens of forums for sale each week?" I've noticed a lot of forums use "Ads by Google" as their advertising... is this a decent way to go? I don't expect to get rich running a forum, but I think it would be fun, and even if it only brought in a little money, as long as it wasn't losing money, I would enjoy running one.

[Peter T Davis]

I should say that, though I see dozens of forums put up for sale, I rarely see one that's worth buying. I see forums with no activity and no traffic usually. The asking price is usually far in excess of the cost if you'd start up from scratch. Some of the forums I know do bring in serious revenue for their owners, take a look at Sitepoint's forums sometime. What kind of forum are you wanting to run?

[thebassman]

Yeah, I guess I would assume that the asking price for most "all ready made" forums/sites would generally be over-priced. Out of curiosity, though, where do you stumble across these sites? Yeah, I can see that Sitepoint's forums are quite nice and well run.

I'm not exactly sure if I've nailed down exactly what type of forum I would want to run. About 4-5 years ago, me and a couple of guys started the www.CoolsigForum.com, and that was a pretty fun forum for a while. I left the company soon after we got it up and running, and we made a point of having it advertising free. That forum has since grown to be kindof messy and a bit scattered as far as content goes, but I found it quite fun moderating and creating interesting topics and threads.

Any suggestions on how to figure out what would make a good forum? What do people look for in a forum, and what makes one better than another? What do people like/want to talk about in forums? Sorry if I'm asking too many questions. The fact that you run 65ish sites, including this forum that has become a site that I visit several times a day, you seem like you have a brain worth picking.