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I have the opportunity to buy a website but the owner wants me to "make an offer"... and I'm not sure what it's worth. He says it has 60k unique visitors and 2million unique visitors per month. He is set up for google adsense and has four private ads, in total this brings him about $650pm ($50 per ad, the rest from adsense). He hasn't really done any marketing for ads with all his customers coming direct to him. The site is a website about Cambodia, mainly aimed at western expats. There is no section in the local language, all in English. It has a decent blog covering news for expats, tourists etc and some human interest and comedy stuff. It also has a reasonably lively forum - according to its own stats it has 27k members and 500k posts across 30k topics. Currently there are 193 members online. The sites twitter account has 2500 followers. It doesn't seem very well monetarised and I think it has potential. For example, when I click "Accommodation" in the Travel section it just takes me to a link of hotels and such in Cambodia. I reckon that can be upgraded to book accommodation direct through the site, i.e. through a website like laterooms.com but with the site taking some commission? So how do I value this? I live in Cambodia and to be honest $650pm is a very good income if you can work on a laptop by a swimming pool! I think the guy has just set this up 5 years ago, nobody else had the same idea and now its got too unwieldy for him and has stopped being a hobby. Any ideas?
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# ? Jun 5, 2014 17:05 |
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# ? Apr 17, 2024 22:30 |
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Well what return on your investment would make you feel like you got a good deal? 25%? If that is the case then take annual income times 4. That is the value. Income/discount rate. You can adjust for expected growth etc if you want to get fancy. You really need to reduce the income by monthly expenses though, including the time you have to spend working at your current hourly income rate.
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# ? Jun 6, 2014 14:51 |
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Punch it in here and see what comes up: http://www.alexa.com/
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# ? Jun 6, 2014 14:59 |
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There's no one right answer. Not sure what you mean by "60k unique visitors and 2 million unique visitors per month." Most websites are worth 1-5x annual profit. At the under $1k a month level I think most sites that seem to have potential and have a history of income are probably fairly valued at 20-24x monthly revenue. So $13k-$15.6k. I would not pay 4x annual for a site like this. With that kind of multiple the site would have to be bulletproof, with multiple streams of income, a large social media following, an email list, and not completely reliant on Google. It has gotten more and more difficult to keep a site afloat long term that is reliant on search engine traffic, and that is pushing multiples down in my experience. I sold a site for 36x monthly in 2011. I now have a site, same niche, making 2-3x more a month and I've had investment bankers tell me it's only worth about 24x monthly. It's a brutal industry. I also heard recently that QuinStreet is only paying 10x monthly revenue for acquisitions, which is insane. If the industry moves in that direction I doubt I'll ever sell anything again - better to just hold on to everything and earn until they crash and burn. Anyway, I think $15k would be reasonable if there's a history at that $650 a month level. You really need to go by what the site has made in the last 12 months - you take an average of that and build your multiple off of that number. Don't look at Alexa or any "what is my website worth" websites, they aren't helpful.
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# ? Jun 7, 2014 06:57 |
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Thanks for the replies, particularly imabanana - that's very helpful. The guy has got back to me and said he wants $25k, which is just over 3x annual income. It's actually about $50 from adsense and the rest from private ads, I got that the wrong way round. It's in a good niche as it relies a lot on word of mouth and that's very strong amongst the expat community here. The 60k/2million thing was 60k unique visitors and 2million page visits. Like I say it's got excellent potential but the income stream right now just aren't diversified. So I'm buying potential and I don't think that's worth 3x annual. I'm lowballing and offering 1x annual income but I fear I may be biting off more than I can chew if I do buy it...
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# ? Jun 7, 2014 08:41 |
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Just another data point for you. I sold my site in 2007 (so just prior to economy going to poo poo) for 25x monthly.
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# ? Jun 9, 2014 10:45 |
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# ? Apr 17, 2024 22:30 |
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Hey, send me a pm and I'll do a few valuation models for you. I need the practice anyway.
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# ? Jul 8, 2014 06:06 |