Simple ways to value your website

By | November 20, 2007

Although there is not much written about the valuation of websites, in the last few years some have attempted to establish some methods for valuing an already established website. These methods range from the simplistic to the overly complicated.

Even I wrote a lengthy (still in progress) article about web site valuation but while the methods set forth there are extensive, they are currently a little outdated and they don’t help properly and quickly valuing a website today.

Here are some tips on how to come up with a general value for a website you might want to sell.

You will need the following information: (1) unique monthly visitors (2) number of monthly page views (x) number of members (3) dollar amount of monthly income from all sources (4) total expenses to run site.

Here are the various methods:

Some think that a good way to value is a site is to use a multiple of the Average Monthly Net Income (AMNI) that the site has generated. On the lower end E-Commerce sites can sell for a multiple of 6 to 12 times the average monthly net income, while content based sites can sell for a multiple of 10 to 20 times the AMNI. For example an e-commerce site with an average net income of $2000/month could be valued between $12,000 to $24,000.

Another approach for sites that might not have much or any income but have many visitors that is becoming increasingly popular is to use a multiple x number of users approach. Here you basically assign a value for each unique user that you have to your site. Unique visitor could mean the number of unique visitors who visit the site in a month or the number of registered members or active users. Based on some high-profile Web content deals, the value of a unique monthly website visitor hovers around $38 (the average purchase price per unique user of acquisitions during 2005).

Some acquisition price per monthly unique visitor are: $710 Excite; $394 Lycos $385; GeoCities $187; MarketWatch $80; $71; $58; Ask Jeeves $44; MySpace $36; AltaVista $26; iWon $18; Weblogs Inc. $10; Launch Media $6.60; $3.23; Lycos $2.57 ; $1.84 Excite $0.73; $0.47. Clearly the range is very wide.

Based on this range the visitors of a site with 10,000 visitors a month could be worth between $5000 (at $0.47 per visitor) to $380,000 (at $38 per visitor).

Naturally, there are other factors such as type of audience, duration of visit, nature of activity at the site and a number of other factors that need to be considered that will affect the value of such sites.

Additional factors to consider are customer databases, affiliate networks, cookie information, opt-in email lists, advertising CPM rates, search engine rankings, website traffic, sources of traffic, content value, process patents, “stickiness” of the site and sales conversion rates.