Acquisition Valuation:
Exit Valuation Target:
IRR:
The Model will also give you ideas on how you can increase your revenues. We compare your site with similar sites in our website revenue model and website valuation reseach study. The model identifies revenue generation strategies that worked for your peers. You make also like our website revenue calculator. We're still tweaking this section, so bookmark this site and check back with us on a regular basis to get the latest updates!
For those of you who like to build and flip websites, this calculator can be used to swag the numbers for a new project. To see how much your site is worth using different assumptions, simply pick a different option and hit the button.
To get the highest possible price for your website (or any business), think carefully about what types of buyers would get the most value from it. When you are ready to sell, you should approach these potential buyers. For example, if you have a large content site about marketing, you should approach a marketing services company. They can make more money from the site than other potential buyers. For example, they can promote their services on the site (worth far more than a PPC ad) and could likely generate cheap content. You can help this process by building the right relationships in advance and selecting features likely to appeal to this audience and their customers.
The model starts with a snapshot of an existing website's performance over the past 12 months. Key factors include:
From there we move into value creation mathematics. The most basic lever is content expansion. All organic SEO impacts are lagged one year to give content time to rank. This is function of three variables:
Monetization is handled two ways... as the acquirer, you may want to upgrade the website's existing ad network - we handled this as set of options. Or you may want to nope the entire business model and take a new direction. We provided a manual override for that path. Enter your expected earnings per 1000 visitors and the model will use that instead.
Finally we provided an option for advertising arbitrage. You can set an annual ad budget and a target cost per click.
Exits are assumed to occur during year 6. From a valuation perspective, we use a multiple of revenue generated from organic traffic net of advertising costs. Content costs are expensed within the annual cash flow numbers but don't count against Y5 income for valuation purposes.
Disclaimer / Methodology: This valuation is like all other M&A models - it should be used for brainstorming, amusement, and discussion purposes only. In that regard, it is no different than anything else Wall Street creates. In the real world, the correct price for a website is the one at which you think you're earning a fair return on your investment and the person buying the site thinks they are earning a fair return on their money - ie. the one that makes the two of you want to shake hands. This will vary from person to person - frequently by a large amount!