Comment Website value in today's economy (Score 1) 193
Determining the website value today is really based on a few key issues:
1. Can your product or service scale with HUGE volumes of traffic? By this I mean, if some large company with traffic which dwarfs yours were to point a large chunk of it's visitors at your site, would you crumple or take it in stride? If you would crumple then you are worth less because they have to invest in you post sale to make you scale. If you can take it then that can keep your value the same or actually raise it if you do it well.
2. Do you have any large outstanding debts? If you do then the aquiring company will have to take them on and this could hurt your worth.
3. The first 2 factors are really just modifiers. This third factor is actually the measuring tool. The worth of websites today are based on "visitor aquisition cost." Every website out there has a cost to aquire a new visitor. Of course there are different types of visitors (viewers, buyers, members, etc) and these are worth different amounts. Say a major website normally spends $75 to aquire a new member on it's website through various marketing activities. Now say that your site has 10,000 active members. You can easily make a case that your site is "worth" at least $50 per member or $500,000.
Personally I don't know what your membership level or traffic level is and I definately don't know how factors 1 and 2 affect your business, but with this information and a little homework in the cost of customer aquisition for your potential buyer you should be able to come up with a fair value of your company.
--Alex
1. Can your product or service scale with HUGE volumes of traffic? By this I mean, if some large company with traffic which dwarfs yours were to point a large chunk of it's visitors at your site, would you crumple or take it in stride? If you would crumple then you are worth less because they have to invest in you post sale to make you scale. If you can take it then that can keep your value the same or actually raise it if you do it well.
2. Do you have any large outstanding debts? If you do then the aquiring company will have to take them on and this could hurt your worth.
3. The first 2 factors are really just modifiers. This third factor is actually the measuring tool. The worth of websites today are based on "visitor aquisition cost." Every website out there has a cost to aquire a new visitor. Of course there are different types of visitors (viewers, buyers, members, etc) and these are worth different amounts. Say a major website normally spends $75 to aquire a new member on it's website through various marketing activities. Now say that your site has 10,000 active members. You can easily make a case that your site is "worth" at least $50 per member or $500,000.
Personally I don't know what your membership level or traffic level is and I definately don't know how factors 1 and 2 affect your business, but with this information and a little homework in the cost of customer aquisition for your potential buyer you should be able to come up with a fair value of your company.
--Alex
