How to calculate a site value?

[nico84]

Hi!

I was wondering... if one day I wanna sell a site, how can I calculate it´s price?

My idea is:

Average of "casino new depositors" per month * 12 months * CPA industry average * 25.

Do you have another one?

[TheGooner]

Different people will have different ideas.

-------------

PROFITS :

Certainly one of the most tangible ways to value your site is to take your average monthly profits (revenue - expenses) and multiply it by somewhere between 6,12 or 18 months.

That seems to be an industry standard for online gaming, it's much lower than other real world businesses which are often valued at 6-8 YEARS of profits, but then the online gaming industry is so fluid, and full of bad news and regulatory challenges ... so our values are depressed.

------------

UNIQUE VISITORS :

I've seen that many corporate deals are done on web properties outside online gaming and seem to value the sites based on the traffic the site gets - particularly in the social networking space where things have not been monitised.

Here the rule of thumb seems to be to take the value of your monthly unique visitors and multiply by a range of $10 of $20.

Note that these "buyouts" are often paid for mainly by stock of the buying company and only a small percentage of cash - so the REAL value may be slightly inflated by the fact that it's paper being exchanged not actual money.

-----

PR n LINKS

Finally, if you had a website with a high PR - then there is a sub-culture within the internet that still believes that websites with high PR ratings are worth having - and links from these sites can be sold for quite high numbers.

Personally, I think that this metric is bogus, and the number of buyers and sellers on raw PR (no traffic) are dropping all the time, but there is still a market out there - although I have no idea what price you could expect for a PR 6 website.

==============

SUMMARY :
That's the way I've seen websites seriously valued.
- The PROFITS method is specific to our sector and for financial sites making money.
- The UNIQUE VISITORS method tends to be for big traffic sites (social networks?)
- The PR n LINKS is for hardcore linksellers


I hope that helps.

[david_tamworth]

And just as importantly - who would you target? Who would you sell you sites to? How would you find the people at the company's to sell? Would you target affiliate companies, the casinos direct, both?

[AWH-Gemma]

And just as importantly - who would you target? Who would you sell you sites to? How would you find the people at the company's to sell? Would you target affiliate companies, the casinos direct, both?

I imagine he would sell his sites to another affiliate

[nico84]

Yes, I´m supposing another affiliate wanna buy it...

[michael1981]

Its so hard to put an exact value on a domain name I look at a few things to work out how much a domain name is worth.

1) Is it ranking in Google for any good keywords?
2) Does it get much traffic?
3) How many links does it have?
4) Does it have any PR?
5) How much money does it make?
6) Is it a good keyword domain name, or exact match domain name?

At the end of the day though, a domain name is only worth what someone else is willing to pay for it. It doesn't have an exact value

[craig96]

If you get a bog standard calculator and type:

500 x 6 - 20 / 100 x 70 =

This will give you your answer.

Also, type 376606 and flip the calculator upside down.

[nico84]

If you get a bog standard calculator and type:

500 x 6 - 20 / 100 x 70 =

This will give you your answer.

Also, type 376606 and flip the calculator upside down.

Can you explain your formula?

[michael1981]

I think its supposed to be a joke. But I couldn't figure out what the answer is supposed to be either lol Maybe its supposed to say Google upside down? That's the closest possible match I could find :P

[baldidiot]

I think its supposed to be a joke. But I couldn't figure out what the answer is supposed to be either lol Maybe its supposed to say Google upside down? That's the closest possible match I could find :P

That's what I thought, but it says goggle.

[LiveCasinoPartners]

It is hard to evaluate the value and price of a website. In the gaming industry I'd say a reasonable offer would be 8-10 months worth of revenue. The person buying the site would have to know enough about your niche to buy with confidence.

[nico84]

Yes but the revenue could be because for example because only the first month the site converts X players and they continued playing, and then the site converts cero. The guy who want to buy a site would buy only the site, not the AF account, so, that´s why I think you should take the CPA model to estimate it, not the Rev Share model.

[TheGooner]

Yes but the revenue could be because for example because only the first month the site converts X players and they continued playing, and then the site converts cero. The guy who want to buy a site would buy only the site, not the AF account, so, that´s why I think you should take the CPA model to estimate it, not the Rev Share model.

IF your site has rev-share deals - then my PROFITs method estimate of 6,12 or 18 months was assuming that the affiliate accounts also were part of the sale.

You will be able to achieve the higher end of the range of you can show prolonged signups and consistent or improving profits. If the profits are based on a single good month (perhaps an event based site like World Cup 2010 or Euro 2012) then the multiple will of course be much lower.

Eg. If I have a 10 year old site making $10K-$15K per month and regular new players signing up ... then I can reasonable expect a sale price of (perhaps) $12K x 18 = $210K to $220K.

If I have a 2 year site that made $10K a month early, but is now at $1-2K, then you might only get offers of $6-8K as there is little remaining volume and a big risk in purchasing a non-converting site.

[PhilF (ex-WhichBingo)]

It also depends 'what' you're selling.

One domain with a little traffic?

Domain, plus existing content?

Domain, plus existing content plus affiliate accounts?

I would expect the further 'up' that scale you go the higher the multiple or however you calculate.

Basically a buyer is going to want to reduce his/her risk when buying. If there's proof that the rev stream is regular and sustainable then the 'risk' is reduced, and thus they'll be more comfortable with a higher mutliple.

(BTW If anyone has any bingo portals/domains for sale please PM me)

[shineray22]

IF your site has rev-share deals - then my PROFITs method estimate of 6,12 or 18 months was assuming that the affiliate accounts also were part of the sale.

Are the affiliate accounts usually part of the sale? I was discussing buying a site with someone and he said that they wouldn't even allow the transfer of the affiliate accounts.

I assumed that when you buy a site you have to re-register with all the affiliates, change the tags on your site. Is that the case or do you just profile and payment info, and passwords, logging in with the same affiliate accounts?

[gayle]

How about quality and quantity of content? I was in a discussion at my webmaster forum about selling your site based on your content?
Of course revenue is important, but would you consider buying a site that was well noticed by the SEs with enough quality content that you
would then add your affiliate links/banners? What is that worth to you as an affiliate?

[Casinorep]

There can be many arguments to this but I personally find it hard to calculate a site's worth by its affiliate deposit numbers, as they can be easily skewered and there are no concrete proof that those revenues are generated from the site alone.

If I were to buy a site, I would first look at the value of its domain and how keyword centric it is. Then I would look at how well it's ranked for that keyword (or similar keywords), and also how SEO friendly the overall site is.

Of course there are many more factors to consider, but the above criterias are what I'd focus heavily on before considering making any offer. My 2 cents.

[TheGooner]

Both of the above ideas from Gayle & CasinoRep sound plausible and could be valid ways to value a site - although both descriptions sound that they're valuing on "potential" rather than actual profits - and that tends to means profits are future based - meaning that the current price is way down the monetary scale - and there is often a huge gap between buyer and seller.

Gayle - of course content has some value - but determining whether the content is still current and whether it is worth more, less or the same as when it was first created is going to be a major task. Selling is more than adding affiliate links and banners.

CasinoRep - I struggle to understand why you'd pay MORE for a well-SEO'd site if it's not making much money. IF you find a great SEO'd site that still does not have traffic - what are you going to do? I'd rather have a site that has not been SEO'd well - so that I know I can improve it's performance.

But in the end, the problem I have with both of these approaches is that if the site is not making money already - or is not attracting a lot of eyeballs already - then your are only buying a skeleton that needs extra work to deliver cash. IF you are talking about "hobby sites" worth $0-$1000 - then yes I agree with you that sites can be worth that potential - but once you are seriously discussing figures above that - there does need to be some sort of proven conversion potential IMO.

But a site that does not make money? That does not attract 1000's of people daily? That's an enthusiasts site - not really a "business" ready for sale. IMO.

Finally, Shineray22 - your affiliate accounts should be registered in your company name rather than an individual person - setting up the agreement with your website and whoever owns it - rather than a specific person. There are many legal ways to transfer ownership of the affiliate accounts that have NOTHING to do with the affiliate program.

[GFPC]

But in the end, the problem I have with both of these approaches is that if the site is not making money already - or is not attracting a lot of eyeballs already - then your are only buying a skeleton that needs extra work to deliver cash. IF you are talking about "hobby sites" worth $0-$1000 - then yes I agree with you that sites can be worth that potential - but once you are seriously discussing figures above that - there does need to be some sort of proven conversion potential IMO.

But a site that does not make money? That does not attract 1000's of people daily? That's an enthusiasts site - not really a "business" ready for sale. IMO.

Some serious good points - something I had to learn the hard way a while back and re evaluate I did things and went about buying and selling sites over the last 6 months or so.

On one particular site we were offered 15K which I actually instantly rejected and felt kind of insulted - but later realized the site only made 8K a year so really it was a generous offer from that standpoint.

I now come to the conclusion a site is only worth what it makes period! I put almost no value on SEO or content because ultimately it the site makes ZERO its worth zero.

Of course there are exceptions but as a general rule i use the 12 month rev model - and that will also include affiliate accounts.

[shineray22]

Finally, Shineray22 - your affiliate accounts should be registered in your company name rather than an individual person - setting up the agreement with your website and whoever owns it - rather than a specific person. There are many legal ways to transfer ownership of the affiliate accounts that have NOTHING to do with the affiliate program.

I don't have a company. It's just me wanting to work on a site. Do you have to have a company name?