Why are websites valued at 6moths?

Discussion in 'Blogging' started by youtalkmedia, Mar 6, 2013.

  1. youtalkmedia

    youtalkmedia Senior Member

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    I have seen on flippa that most websites are valued at 6 months earnings to 10 months earnings. Why is this? Any other investment that you make where it is hands free you are lucky to get a 10 year return. Why are websites valued so low?

    Only reason I would see for selling a website is if the website does not make much, and is not worth your time, or will take too much of your time to get to a profitable level...
     
  2. clouds

    clouds BANNED BANNED

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    Why are websites valued so low? Probably because a lot of people use "quick and dirty" methods to get the traffic/earnings. Especially in the free market like Flippa.
     
  3. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Flippa isn't reflective of the "real" market for decent sites. Multiples are skewed by the low quality.

    The "average" multiple for an established site is around 2 year's net income. Website multiples aren't much different to regular businesses. Most small businesses will trade at similar multiples - online or not.
     
  4. john1444

    john1444 Elite Member

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    Simply for one reason, to study the traffic and earning consistency.