What’s A Website Worth?

Just days after Aaron Wall’s acquisition of Threadwatch from NickW seems an apt time to discuss the value of websites and Internet communities. While this has little to due with Black Hat SEO, it matters to all of us because we are Internet Entrepreneurs.

During the peak of the first Internet Bubble (1999), bluemountain.com sold for $780 Million or $71 per MUV (monthly unique visitor). In the case of broadcast.com, the multiples were as high as $710 per MUV.

Recent buyout valuations, while a little frothy, are much more reasonable. For example, Myspace sold for $36 per MUV and Weblogs Inc sold for about $10 per.

As attention becomes scarcer, it’s value increases. This is a contributing factor in the increase in online ad spending per person seen here:

Online Ad Spen

Also of note is how the value of a conglomerate of communities is greater than the sum of its parts. As bubble generation points out:

rather than Yahoo (etc) trying to roll it’s own communities, a much smarter play would be to begin acquiring vertical communities and build nonlinear returns to scale, because each acquisition price won’t reflect network benefits.

Why does this matter to you?

If you understand how to appraise communities, domain names, and websites and have capital to invest, you can find some incredible values if you’re willing to look.

For example, a friend of mine purchased a drug rehab community site for $5,000. The site included active forums, hundreds of inbound links, and a domain that’s been around for 7 years. The average cost of a drug rehabilitation program: $13,000.

I don’t know what Aaron Paid for Threadwatch. But I’d say it’s less than the $453 thousand that some linkbait tools suggest, but more than my friend paid for the drug rehab site. It was likely a good move for both parties as I think both Nick and Aaron have their sites set on being Blog Overlords.

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3 Responses to “What’s A Website Worth?”

  1. Jason Calacanis had some interesting things to say about the value per visitor:
    http://www.calacanis.com/2005/11/29/ok-lets-stop-the-bubble-machine-right-now/

  2. […] Most people don´t yet understand the value of their 5 year old website. If someone is making making $150 a month with a 6 year old, 300 page site – think what you could do with that same domain and a 300,000 page site. Just be careful not to add that many pages over too short of a period of time, it will raise a red flag. […]