Many software offers an automatic estimate of your website, based in particular on the free data available such as Alexa, a tool that classifies sites worldwide according to their audience.
Except that Alexa… it's over:
Other tools tried to use the PageRank… no longer displayed by Google for a few years.
In my mind, there are 2 categories of sites, for which the valuation method will be different.
1/ Raw domain names, purchased for their intrinsic value.
The most expensive domain name, Lasvegas.com, sold for $90 million. It now serves as a travel booking site for the city.
Was it a good deal? I'm not sure given the estimated traffic curve from SEMrush:
Note that other "sites" sold for more. But they were attached to the joint sale of a company and derived their value from their turnover.
Today, given the number of extensions available, I advise you not to buy a domain at full price for its name alone. Any domain that is a little "marketed", with a few links/referring domains, will be able to rank in front of a " exact match domain (EMD).
2/ Online businesses, startups and pure players.
By online business, I mean a profitable site, properly monetized, with a turnover and a gross operating surplus (EBITDA).
And if not?
The US market being quite mature, I often refer to Empire Flippers. I had discovered their site after 2 articles on MOZ and Ahrefs (yes, it works guest posts to discover your business, create links and develop your turnover).
Quick answer: your average monthly profit over 1 year * between 20 and 50.
Reasonably, like most physical businesses, around 3 times EBITDA.
If your creperie earns you €60, you will generally resell it for around €000.
Of course, you're going to tailor that number to security and how easy it is to hold the case.
If it has been running “on its own” for 50 years, it will be worth more than one that just opened 3 years ago or less and requires the full involvement of the manager.
It's the same for online businesses: for equal profit, the drop shipping site opened a year ago will be worth less than a gardening site from the 2000s with a diversified business model.
3/ Risk criteria of an online business.
Here are some examples of sites for sale on Empire Flippers:
I take this site as an example as I noticed their entry into the INC 5000 rankings and therefore some success / some subject matter expertise:
I told you about 3 years for a classic site/fund; here we are on 39 and 41 times the monthly profit for example.
You can easily find cheaper sites, especially on Flippa, but with a related danger that forces you to make them profitable in 6 months – 1 year.
What factors influence the risk of an online business and its valuation?
a/ Sources of traffic.
To be able to monetize, you must first receive traffic.
If you've ever looked at Google Analytics or an equivalent, you should be familiar with the different types of web marketing channels.
On this graph, appear:
Le natural referencing (SEO) : most appreciatedby investors because it is not dependent on a direct investment, even if it is the one that requires the most time / financial effort to set up. A good SEO is also the brand development, which can represent a good part of the searches of Internet users who visit the site.
Le referral : these are links clicked from other sites (guest articles, spontaneous quotes, etc.); it's an amazing channel because it not only boosts your SEO but also drives direct conversions. A link from a popular site is a recommendation for both Google and Internet users.
Direct traffic : these are Internet users who type the name of your site directly into the browser bar; it is a good indicator of the popularity of the site / your brand.
Le paid referencing / sponsored links : these are paid campaigns in Google, Bing (Ads, Shopping, etc.) or on social networks such as Facebook, Instagram, etc.
Le corresponds to the advertising banners present on a site. It's a calamitous way to try to do business; you will lose an average of €7 to gain €1 in turnover.
The Social networks : unless you pay for campaigns, social networks used "naturally" are not an effective way to make a website profitable.
It should be added: mailing, an excellent channel if you have collected these emails on a regular basis and not by sucking them up automatically from other sites and then spamming their owner.