What is a Website’s Value?

Website ValueI’ve purchased a few websites over the years from previous owners, and “How to determine a web site’s value” has always been a part of such discussions leading to a successful transaction (or not).

There is considerably more information available nowadays, but the common theme is what you and I have understood about evaluating the worth of most any item:  The final value of a website is determined between a buyer and seller.

Regardless, following are some tools, tips, theory, technical and practical info on ways to enter a discussion about website value.

Profitable Websites vs. Websites that are Not.

Although the ways to value a website are quite varied, there is a dividing line between websites that make a profit and those that don’t.

1) Websites that cannot prove profitability are subject to greater whimsy in terms of valuation between buyer and seller.

2) Websites that can prove profitability can be more effectively valued, but the ultimate worth is still subject to many factors that have varying degrees of importance between buyers and sellers.

In either case, sellers tend to believe their sites are worth more than some hypothetical reality, and buyers tend to believe they are worth less than some hypothetical average, so establishing some basis for discussion at least can allow a discussion to occur.

Free Tools for Website Valuation

There are a number of free tools for determining a website’s value, including:

http://directory.sootle.com/website-worth/

http://dnscoop.com/

http://tidget.com/

http://valuemyweb.com/

http://yourwebsitevalue.com/

Independent of the relevance (or not) of such free tools, which arbitrarily assign value to criteria associated with a website, here’s the most useful I’ve encountered.

http://ebizvaluations.com/

This tool includes user-input data as part of its evaluation. I also like the tools comparative analysis against a database of actual website sales.

“This tool values your site based on what hundreds of similar sites have actually sold for. As it’s a tool that is grounded in reality, it can offer an reliable estimation of your web business’s value.”

Theory and Technical Info on Website Valuations

If you want to gain insight into the subject of website valuations, I recommend the following two articles. They are both somewhat lengthy (6 pages each), but offer a good theoretical and technical overview.

The first link is what I consider to be a relatively simple and generally useful overview of the theory of website valuations.

What’s Your Web Site Worth? By Georgina Laidlaw.

The Ultimate Web Site Valuation Guide By Clinton Lee.

The second is more technical, and is an outline of what is behind the ebizvaluations.com tool above.

In the end, the final value of a website is determined between a buyer and seller. But the preceding info can help both buyers and sellers understand a broader spectrum of variables to consider for discussion.

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4 comments on “What is a Website’s Value?
  1. Kylie Nicolussi says:

    I would love to try these tools and see my own site’s worth. Thank you for providing this great information. Your blog posts are all very educational.

  2. Cesar de Chaves says:

    Managing a website is like managing your being. At the end of the day, the only question is, “If I am to vanish, what will be my worth?” For one’s self, it is a measure if he will be missed when he’s gone while in business aspect, this question would mean if the product is still a hit or again a miss. Having these tools will be of great help. At least, for the owners of the sites or business he will know where he is heading to.

  3. HallowedCacophony says:

    The general look, content and visual representation matter when you’re selling a website. If it is unable to deliver the goods you’re looking for, then it’s likely not to sell very well. Studies have shown that when people go out buying cars, they start by browsing online and once finding the websites are so user-unfriendly, they skip and move on to the next brand.

    I do agree, they are valuable tools. They indeed are extension of businesses.

    They’re business fronts and should be able to deliver both information and business appeal right then and there.

    If I’m not wrong about it, most avatar-based websites tend to be item based wherein some pay to own items are being sold among other things. That’s part of the business aspect in the works. As a member, you may be more focused on getting the items because they look pretty but for their side, they’re hell bent on making it cute/gorgeous enough so everyone would want it. You may argue, ‘I’m not paying real money to enjoy this right/privilege’ but someone else is.

  4. ChaoticDissonance says:

    I used to be active on this avatar-based forum once upon a time and there was a talk about it being sold off at some point during it’s history. I heard money was involved and wasn’t quite sure how that happened.

    I was more into the whole forum experience so I never thought of the ‘money’ aspects in it. Then again, most forums I used to be part of were onto the whole ‘let’s get together and bond, shall we?’ than to outright mention the whole ‘business’ aspect of it.

    At that time, I never saw the ‘profit’ behind it.

    Years later, I know better and I definitely see the appeal in it.

    Websites are a valuable tool, especially for businesses, as an extension of their physical business or as a front if ever, they’re strictly online. Whatever be the case, to be successful, one does not only consider the ‘fun’ part of it but factors that make people come back for more.

    That aspect is what helps it earn.

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