Buying, Selling and Valuing Websites

Although this article contains useful information about buying and selling web sites, it is far from finished and should be considered as a "work in progress". The reason it was put up, is to obtain feedback from you to make it even more complete.

1. Introduction

   1. The Problem
   2. The Solution
   3. The Past
   4. The Players
      1. Brokers
      2. Buyers
      3. Sellers

2. Valuation of Websites

   1. Profits and Cash Flow
      1. Source of Revenues
      2. Operating Costs
      3. Growth Multiple

   2. Assets
      1. Technology
      2. Content
      3. Branding
      4. Databases

   3. Traffic
      1. Number of visitors per day
      2. Ratio of visitors to page views
      3. Traffic Sources
      4. Number of Links to the site from other sites
      5. The value of links
      6. Percentage of traffic from search engines versus traffic from other links to site
      7. Placement for relevant key words on search engines and historical performance data
      8. Traffic growth per month in last year
      9. Access statistics available for what period of time?
      10. Automated messages
      11. Are there newsletters or forums associated with the site?
      12. Number of RSS feed subscribers

   4. Niche

3. Additional things to consider when buying or selling a website

   1. Personal monthly involvement in site
   2. How long will old owner stay on board
   3. Balance sheets / P&L statements
   4. Have agreement
   5. Consult with an attorney
   6. Use an escrow service
   7. Logistics and ease of moving the site to another server
   8. Extra services provided by hosting
   9. When you buy a car you have it "checked out" by a mechanic, should you do so with a web site?
   
   

4. How to find a buyer

   Finding a buyer these days is not necessarily a simple task. However, not all hope is lost as there are several avanue you may want to pursue.
   
   

5. How to sell a website

   Besides the points raised in the earlier sections there is always the actual steps that need to be taken when selling a web site. We will examine those steps both from the buyer's perspective and the seller's perspective.

   1. Buyer

      1. Identify the seller
      2. Do due diligence on site ownership
      3. Review the site

      
      

   2. Seller
      
      1. Find buyers
      2. Do due diligence on potential buyer