How to Value a Site
Valuing sites is a tricky business. While many people would see a high value in sites they have painstakingly crafted and filled with content this does not indicate the value of the site in any way. This is really the key thing to remember when trying to determine how to value a site, be it yours or another's as generally what makes a site sell is its business potential rather than any other factors.
This, then, is where to begin when valuing a site. Business potential is determined by a number of key components. Combined these form the basis of a site's value.
First, from a business point of view, what are the revenue potentials from this particular site? Does the site cater to a specific niche of the market that can create advertising opportunities or does it provide a service that is not provided readily elsewhere? These should be the key factors running through your mind when trying to figure out how to value a site as they directly impact the potential revenue the site can generate.
Secondly you need to look at the current revenue the site generates as this directly indicates how much money it is currently making while at the same time allowing you to identify key areas for growth and potential flaws in the sites income potential. For example, how much advertising is currently on the site, or how competitively priced are the services being offered?
Third, you need to examine the traffic flow, i.e. the number of visitors to the site, and the page ranking to determine how popular the site is and how popular it can become. If the traffic flow is low that is a good indicator that something about the site is not user friendly or that the competition has an edge over the site being valued.
Examining the page seach engine ranking, i.e. how far down Google and other search engines this page ranks when key terms are inputted, will provide a good indication of the likelihood people will find the site from searching and therefore how much traffic you are likely to receive.
However, if you are examining this as a potential buyer, you need determine what could be improved to increase the page ranking and traffic- is this simply a lack of key word use or other easily overcome error or is this a fundamental flaw in the site design?
Finally when trying to value any site, look at the amount of work needed to make the site profitable, the upkeep time and costs of running the site and factor these into your valuation. If a site is going to create two hours of work a day for you but not turn over high profits after a certain time frame is the total investment beneficial? Try and bear this information in mind and most of all try to be realistic in your valuations.