How Much Is My Site Worth?
Everyone hears the stories of sites that sold for 100s of millions and into the billions. Everyone wants to build the next YouTube. There is also a ton of money in the internet. More dollars are being spent on internet advertising than any other media outlet today. With computers becoming so cheap and growing internet access in third world countries, a whole new viewership has emerged. Advertisers are willing to jump on the bandwagon to get their products out on sites backed by reliable web hosting. When it comes down to it, if you have the clicks the money will come!
How did you start?
Sure you started with programming using one or more scripting languages. The most common is HTML which is the base for PHP and ASP. After everything is created, your next step is finding a web host. Web hosting plays a crucial role in site building. A good web hosting company offers quality, security, privacy, and right bandwith to store your files. It also offers software and services to give you complete control of your site including revenue. It may be costly to have a self-hosted site but it pays off in the end.
Are clicks all that matter?
Click is not all that matters. You’ll also need viewership and repeat viewers. You definitely want a solid group of regular viewers, they are the backbone of the value of the site. You also want new viewers just as much though. New viewers mean the site is growing and people want to buy sites that are on the rise. They want to know that there is definitely a future interest in your site. You will want to show that it is rock solid with a great outlook. It’s good to try and get people to sign up so you can show an existing base. If you also have something that is one of a kind or utilizes a great new technology that will have a major affect on the value of your site. New technology pays and it pays well especially if it proves to be successful.
How much money does it bring in?
Does your site make money? Big question. If it brings in a good amount of income every month then that obviously increases the value. It really depends on what your site is intended to do. There are a number of sites that sell nothing and rely solely on viewership, there are other sites that are simply dedicated to selling products. If you sell a product or service you will want to show how well it does financially and make sure that factors into the sale price. Another thing is your investment. If your site sells stock photos for example and you had to buy those photos then there is a cost to build the site and that should be factored into a sale price. It depends on what people are looking to buy but certainly content is very valuable these days. Look at all that your site has to offer and what that may be worth. You may also want to get an appraisal by a third party company.
How do unique visitors and memberships factor into the value?
It’s best to start with the more obvious indicators of value. Unique visitors and returning users are the biggest factors that go into evaluating any site. Investors want to know exactly how many people are visiting the site and how many are repeat users. Membership is also a factor as it reflects customer base. The more members, the better. The other value to membership is that you have a developed demographic who you could market to. With your members you can also determine an average monthly income from this and then use that number as a way to come up with a value of your site. Having a lot of both is great but the customer base helps put a good financial number to the value of the site. Unique visitors are nice but if they don’t sign up then it could be assumed that the site wasn’t interesting enough for them. Unique visitors are good if you are selling ad spots on your site. Being able to drive traffic to advertisers via banners on your sites is of great value.
What about all the services I offer and the actual profit?
Offering many services is great but it doesn’t necessarily mean that you own an expensive site. If you have a lot of overhead and not a lot of profit then that will be viewed as a negative. Ideally your site should simply have a large membership, high net profit and very low overhead. Keep it lean. In the end though the most important fact to take into consideration when you put a value on your site is how much money does the site really make. After all the costs are deducted from your gross income, what are you left with and how long do you think the profit can be sustained or even grown. This is the single most important factor when coming up with a price.
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