Buy and Sell Websites

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Buying and selling websites, and site flipping, are two areas that I have been heavily involved in over the past 12 months. I have spoken to over a thousand site owners, and purchased numerous websites.

Anyway, over the past year I have noticed a trend that occurs on over 90% of all site buying and selling deals… I call this trend “the Webmaster Delusion“.

I have written a white paper on this subject (see above link), and I would like to invite you all to have a read and give me your thoughts on the questions I raise.

Essentially, it is about the fact that webmasters vastly over-value their websites by huge proportions. Seeing as most of you will be site owners, I would love to hear your thoughts. It doesn’t matter if you have any experience in site flipping.

Also, I would like to hear how you think the value of a website should be attained.

I believe there is a huge amount of awful information on the net, and the scary fact is that some of the worst is published by so called authorities on site buying. For example, check out this piece of advice for valuing domains:

“These days most websites are valued by the number of visitors they attract. One common yard stick is your domain name is valued at $10 to $30 per hit per day. If 1,000 people land on your front page each day, your domain could be worth $10,000 to $30,000. Another optimistic way of looking at domain values is each unique visitor you get over the course of a month is worth $250. If the visitor clicks to a second page on your site, her presence is worth $500. By this measure, a site getting only 10 hits per day could go for $15,000. This strategy is a lot like the way traditional businesses have always been sold. The more customers a store has, the more it is worth to a buyer. That is a pretty solid way to value domains. It is a model that is likely to be around for a long time to come.”

Can you believe that this information came from a so called “expert”?

$10 to $30 per day per visitor?!?

Or even worse, the$250 – $500 per visitor in a month.

Back in December 06 I had over 250,000 unique visitors to DeanHunt.com so using the $500 per visitor, my site could have sold for $125 million. Nice!

If you could spare 5 minutes from your day, I would love to hear your opinions and thoughts on The Webmaster Delusion

Thankyou.

  • http://londonbikers.com Jay Adair

    Those quotes are fantastic Dean. Like you, according to those, if I sold now, I’d be looking at IPO levels! So, who wants to submit offers?

    Call me old-fashioned, but isn’t a site worth what it makes over a certain period, i.e. how much revenue it’s pulling in per month multiplied by a year or two?

    Like most web-masters, I’m always keen to hear what the market has to say about my site.

    Current score: 0
  • http://www.carlocab.com/ Kidblogger :: Carl Ocab

    Great topic Dean.

    Although you missed one cause in the delusion there:

    The ‘potential’

    Even if it doesn’t earn anything right now or even the next month, investors are looking for websites that has potential. Potential for earning.

    Just imagine Youtube perse, I bet when Google bought it from the paypal guys, the site’s earning won’t reach 1B even if you multiply it in 10 months. But look at it now, the videos are being monetized by in-video ads (or whatever they call it) and Adsense ads.

    Anyway, I’m not that experienced in buying or selling websites. Just my own perspective.

    A question though, when buying or selling, who offers the price first?

    Cheers,
    Carl Ocab

    Current score: 0
  • http://deanhunt.com Dean Hunt

    Carl,

    Regarding website potential. This is a MAJOR factor of a site owners delusion. Possibly one of the biggest. I did an article last year on it: http://deanhunt.com/web-site-potential/

    Current score: 0