Website Valuations
- Author: Nicky
- Filed under: Web-based Business, Website Valuations
Mar 30,2008
Web based businesses being bought and sold around the world are faced with uncertain questions surrounding their value. How much value do they hold as part of a business sale?
Many business buyers strongly believe in using an ROI multiplier, as the value of many traditional businesses are determined. However sellers argue value also exists in the domain name, search engine rankings and link popularity. The cost of building the website is also often a consideration in determining the value.
Seasoned business people will tell you a business is only worth as much as someone will pay for it. Web businesses have a history of surprising us with seemingly outrageous sale prices.
How much value would you place on the domain name, rankings and links? Comments, please.
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One Response for "Website Valuations"
Different types of websites will have varying weightings on different components.
One website’s value might be in a substantial repeat visitor base of loyal, opulent and themed community members.
Another website’s value might be that it sits on a one-word domain name.
And another again might be that it earns a tidy profit without the owner needing to lift a finger.
So, a valuation can be applied to a business using existing models together with conceptual ideas, but in the end the true value is likely to be in the way the buyer can use it — and a buyer should seek to exploit this valuation difference by purchasing websites that have a greater value to the buyer than they do to the seller.
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