Re: buying a website
There are a lot of very legitimate website businesses for sale with established history of revenues. With only 12 months of history - this business is pretty new and thus will have a more discounted valuation - or multiple of net cash flows(net profits) The average multiple for profitable and established websites with at least 2-3 years track record that are not in decline is 3 times net cashflow.
So at $200,000 the seller is not too far off - be sure to do strong due diligence - tax returns are great, but bank statements and merchant accounts should be provided - if the site is earning revenues passively via affiliate commissions or pay per click like Google adsense - you will be able to prove these easily. Check on traffic stats and search engine positioning in the natural ranks to verify organic nature. All in all I would negotiate to $175 - $180K as an acceptable and very fair market price considering the short history.
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