(I just wrote this as a reply on one of our Blueprints to Profits forums, and realized it might be valuable for others.)
I think a lot depends on the point in time (is the “online” market fairly or over-valued) and the exact niche the site is in. There are basically three components to valuation of any asset.
1) the financial value. This is basically some multiplier on either the revenue, the cash flow, the net asset value, or EBITDA (adjusted net income + interest, taxes, depreciation and amortization). This number – whichever is appropriate, is then multiplied by some negotiated multiplier, often in the range of 1x revenue to 7x EBITDA – depending on various conditions. A buyer will pay a larger multiple when he/she thinks they can simply do a better job with the assets than the seller has.
2) the strategic value. This is basically a premium over the financial value and is assigned by a buyer because the business compliments the buyers buyers business in some way. The premium a company places on website “visitors” falls into this category, especially if the buyer feels the seller is “under-monetizing” the site.
3) market conditions. This depends on what is fashionable at the moment. So Web 2.0 properties have super-premiums attached which are likely to never be realized. (Think Web 1.0 circa 1999. Or just think about the $4b paid by eBay for Skype, which later became a $1.5b write-down. — rough numbers.)
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