How to price a website?

[weblaunch]

Someone offered to buy one of my sites that make $15 a day, mostly from Adsense and banner ads, with no expenditure on advertising. How much should I ask for it? Any rule of thumb?

[morestar]

You should also try to determine how much time you've put into the site over the years and add that into a price calculation...also, you might want to determine how much more the site will be worth in let's say, 10 more years. Of course they're planning on making it make more money then they purchase it from you for but you still should (I think) make a little extra based on it's future worth.

I think other's who are more experiences in the business aspect of domain selling/purchasing will have better answers then this though...stay tuned...

[fiddlemedo]

The general rule of thumb on purchasing or selling a business is that the value of a business is equal to 3 years worth of profits. In your case the value would be $16,425. If I was buying or selling I would consider that a fair price. The only reason to take less is if there are circumstances that prevent you from keeping it.

[astro]

How about the last three years profit added together then divided by three? What happened in year one and two? what was it earning then? Not sure I would tie up 16,000 bucks to earn me 15 bucks a day. I could do better with that sort of money investment

I am alongside Morestar here. However I would be very interested in search engine rankings for keywords when setting a value to a site. What the history was of a site is to some extent academic when setting a value. Last week is sooo last decade internet wise.

/astro

[mjtaylor]

Two year's profit is what I've heard. Or ten percent of one year's gross. There are many formulas. What would you pay for it?

[cw1865]

You should also try to determine how much time you've put into the site over the years and add that into a price calculation

If you buy a bond at $100 that pays 10% in perpetuity and its paying you $10 per year and the interest rate increases to 20%, you're only going to get $50 for the bond; matters not that you paid $100 for it. Whatever you put into it is a sunk cost.

[JaceR]

Someone offered to buy one of my sites that make $15 a day, mostly from Adsense and banner ads, with no expenditure on advertising. How much should I ask for it? Any rule of thumb?

There is no universal formula to pinpoint the exact value of the site.
It depends on the primary reason for which the buyer may be interested in acquisition of the site (immediate handsfree profit or planning to build it up, traffic, content, domain...).

This is a simplified formula how I calculate the basic value of the site :

Net Profit (1 year) + traffic (what I would pay on CPC for the main KW phrase to get that number of unique visitors for 1 year) + value of the content. Then I subtract 25%.

So let's say CPC is $0.20, the site gets 100 uniques per day (36,500 in 1 year) and the content value is $300, then the value would be:

5400 + (36,500 x 0.2) + 300 = $ 13,000
13,000 - 25% = $9,450

So, the value would be $ 9,450 if the sites functions OK and no other problems occur. But this is a very simplistic calculation, normally there would be other things I would take into consideration, depending on the particular niche and the actual site.