In recent times, I have seen a growth in marketplaces which help website owners to buy/sell websites.
It looks like a good idea, as it allows website owners to reshuffle their portfolio of websites and offer services / products which are more aligned towards to their largest consumer segment (read traffic on their most popular website). Besides this, it also helps new companies to get into the business by making quick buy-outs!
I saw how I-Net Interactive bought WebhostingTalk, HotScripts, DBForums, ProgrammingTalk and several other sites to create a niche network. They further added websites on similar themes and made smaller buyouts to add value to the whole network with several relatively new sites. This does make a lot of business sense and I am sure new entrants into Internet media / technology business can learn from this.
However, I do not see any value in turnkey (me too) websites which is basically a smart design coupled with a free / low cost script being sold as a "ready to operate" business. Unless a website stands out (need not be ranked 1-2-3 in their category) with proper traffic, business model, earnings (not necessary) and a sustainable vision, one should not invest in it.
There are several parameters on which a site can be valued.
I feel the (1) profitability or potential of monetization and (2) sustainability of the revenue stream are primary ones.
I will not consider (3) existing traffic, (4) pagerank (as an extreme case), (5) branding, (6) exclusivity and/or quality of content / service / product or (7) subscriber base to be a factor for judging the price of a website. These secondary factors can help in making a site success, but as usual the most important factor is the end result – i.e. the profitability. The secondary factors must be considered in the due diligence process to ensure that the result i.e. profitability (or potential) of the website is not fake and is based on firm grounds.
Now, the money part!
Every transaction has to be closed at a price which makes both buyer and seller win. There are several experts who recommend a 10x monthly profit factor. In my opinion it depends on a specific transaction and its strategic importance to the buyer.
Where to buy / sell?
These are some of the sites where you can buy/sell a website. I will look out for more and if I get one, I will add it to the list.
- http://www.sitepointforums.com
- http://www.websitebroker.com
- http://www.sedo.com
- http://www.dnforum.com
- http://www.daniweb.com
So happy trading websites 😉
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