Search Engine Journal

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19 responses so far ↓

• Craig Rose on Aug 12, 2008 at 7:12 am

  My idea is based on the “willing to pay” school.

  If you can get someone exicted by the future potential of a website or technology then it should sell for a lot more than what the current day metrics say. In fact a developer can effectively sell a site for a very high price before it even exists if he can paint that fabulous future picture and foresee big profits to come.

• Software Testing on Aug 12, 2008 at 7:16 am

  @Ann,

  http://directory.sootle.com/website-worth/

  Is this something different?

• Ann Smarty on Aug 12, 2008 at 8:48 am

  @Software Testing, yeah, saw that one - unfortunately couldn’t find the factors the tool is based on… How do they calculate the price?

• Alphane Moon on Aug 12, 2008 at 9:23 am

  Website Worth: $1,018.35 on CubeStat.
  But it’s not for sale - and never will be :)

• Winston on Aug 12, 2008 at 9:26 am

  Yeah I agree with the comment above, something is worth what someone wants to pay for it. And how much utility anyone derives from any one factor is unique to them and often follows no logic!

  For example I have long since argued that people get far to excited about the value of specific domain names. There are so many variations out there that unless you are looking to buy established traffic then anyone who pays £1000s for a name is wasting their cash (imo!).

  Some people argue its better to start with a nonsense domain so that you can guarantee your brand hits the top spot from day 1.

  Look on SEDO now and you’ll see people asking big bucks for domains. I struggle to believe that you can’t get the same results by being creative with a suffix/prefix.

  But, people are clearly willing to pay bucks for nothing more than the name. No established site, no traffic, no assets. Just a brand which I’d argue is worthless.

  As Shakespeare once wrote, would a Google by any other name search so sweet?

  Of course.

• Scott Fish on Aug 12, 2008 at 1:43 pm

  Great post Ann!

  Speaking from my domain experience, a domain’s typein traffic can be highly qualified leads, vs. search traffic. I’ve seen both direct navigation and referral traffic sites do very well, but the traffic *is* considerably different. If you own a “category killer” domain, it may be worth more than 100x the revenue it generates.

  Things change… It’s always nice to see a site when traffic and revenues are high. As a buyer you should always remember that Google likes to shuffle rankings around and that can turn a great buy into a money pit.

  Well known domainer, Ron Jackson, keeps a tally on weekly domain sales at dnjournal.com/domainsales.htm

  - Scott

• jijiji on Aug 12, 2008 at 2:17 pm

  Very sharp blog. It really gives me food for thought. And that is what it is all about. Thank you.

• Software Testing on Aug 12, 2008 at 2:34 pm

  @ Ann, even I can’t specifically tell how they calculate, but I remember some article about the tool and its like, they use back-links and domain age for calculation.

• Jaan Kanellis on Aug 12, 2008 at 8:37 pm

  Almost every one of those tools only exist to feed the ego of the website owner, hence they really tell you NOTHING about your websites worth.

  Especially when half of them consider toolbar PR, LOL

• Ann Smarty on Aug 13, 2008 at 4:53 am

  @Jaan, agreed :) but I bet you played with at least one of them ;) Sometimes, we really need to just play with the tool, though we know it has no point…

• Doug Heil on Aug 13, 2008 at 8:20 am

  It’s amazing that people vote on things such as this. Nothing against Ann at all as I actually personally like you, but this is against people in the industry who just blindly follow a name no matter what. LOL

  The only item or quote I know of that is accurate is the one saying a site is worth what someone is willing to pay for it.

• Ann Smarty on Aug 13, 2008 at 8:28 am

  Doug, I can’t see any point in my post where I insisted on any of the methods I listed. Instead, in the conclusion to the post I did make it clear that approach #3 (a site is worth what someone is willing to pay for it) seems the correct one as the three tools failed to agree on the site price.

• Trezora - Handmade Fashion Jewelry on Aug 13, 2008 at 8:23 pm

  My website and company name is also a registered trademark that I fought very hard for (against a big bully company). From that standpoint alone, my site is worth quite a bit - at least to me. Number one position for important keywords like “glass jewelry” and “glass earrings” doesn’t hurt, but this is still a niche jewelry website addressing a focused market segment.

  Like any other product, its real value is, as stated above, only worth what someone is willing to pay for it. These automated tools are fun but should in no way be used to actually determine value.

• Joe Schmidt on Aug 13, 2008 at 9:51 pm

  Your going to get a great deal of variations on pricing when you are buying or selling any website or domain. I personally have developed and sold 3 different websites and used many different website appraising companies. I think if you use a domain appraisal website that uses more than simply a ‘bot’ appraisal then you will be in great shape. I have used WeValuer.com and had great results with their domain name appraisals. All three websites I sold were within about 10% of their estimate.

  Again I think you should just stay away from automated appraisals or they will vary just as yours have, stick with personal appraisals. Great article!

• rob on Aug 14, 2008 at 6:51 am

  I like posts that explore these things. I’ll go with the what people are willing to pay option too :)

  These evaluators are great for getting backlinks to the domains that do the crunching, other than that you can take what they say with a huge pinch of salt.

• Linda P. Morton on Aug 14, 2008 at 9:50 pm

  Thank you for this in-depth analysis of determining site value.

  I’m not wanting to sell mine, but knowing how to calculate its value is good.

• Michael Gravel on Aug 28, 2008 at 10:21 am

  Ultimately an Internet business or website producing revenue for that matter is always worth what a seller is willing to sell it for and a buyer is willing to pay. However, we often see sellers leaving a lot of money on the table because that “willing to sell” price is much too low. When we select a business to represent our firm looks at a number of factors. Revenue and profits are obvious cues. However, we also consider growth rates (customers/members, traffic and revenue/profits as well as margins), retention rates, organic keyword placement, domain relevance, competition, book and recordkeeping quality and much more. iMerge is building its case to present to buyers why we belive a business is worth what the asking price states. Keeping in mind there are formulas that one can find, such as multiples of EBITDA (earnings before interest, taxes, depreciation and amortization) or cost to create or many others that are found on our website. The most valuable one to consider is the return on investment (ROI) a buyer would like to obtain by purchasing an Internet business (Non-Strategic Aquisition) as an investment which is common with private equity groups or other “investors”. People have many choices as to where to put money from super safe US Treasuries to junk bonds earning rates in the high teens, abeit with higher risk. Therefore we often see offers that translate into annual ROIs that range from as little as 20% to as high as 40%. The variance is a result of deal structure i.e. 100% all cash or some combination of cash, equity, earnout or other terms. If you are looking to sell your Internet business it is important that you have all the variables considered to obtain maximum value.

• zulett on Oct 9, 2008 at 10:37 am

  i dont have a webb site yet i will like to know if it work to sell my bead jewelry

• Page on Oct 16, 2008 at 9:49 pm

  Thanks for the link!

  Don’t be discouraged if you get a low estimate on the value of your website. The true value is, “In the eyes of the beholder”.

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