Paysite Value - How Do You Calculate How Much Its Worth?
 

Kinda curious as to how one calculates the value of a paysite. Can some of you more knowledgeable peeps post how you would come up with an offer if you wanted to buy a paysite or how you could come up with a price if you had a paysite you wanted to sell.

Thanks in advnce

i think you take the ammount of money you make each month

multiply that by three, then add on $ for the quality of the domain name (if any)

3 is abit low if it's a good retaining paysite with a members base, also you cant forget the content

From what I hear in the Internet business it is normally 6 to 9 times the monthly revenue on average for the last 2 years plus the value of the content and the goodwill of the domain name.

G

So many variables.
Value of the domain, amount of traffic, number of active affiliates, how much of the traffic is house traffic that may stop coming in once the site changes hands.
Value of the content (this depreciates over time, newer content=more valuable)
Are you keeping the rebills for the current members or is the current owner keeping them. (If you're keeping them then you have to put a $$ value on each member)
How many expired and current member email addresses are there? How much $$ does an expired member mailing normally bring in?

There's really no quick and dirty way to figure it out, and every deal is different. Basically it comes down to how long you think it will take for you to make your money back.....and then compare that to how much time and money it would take to build the same thing yourself from scratch.

There are many many variables.

What seems to be most common is looking at how long it would take to pay off the site. That seems to vary from 6 to 24 months. Depending on the site. The number of new sales. Retention. Costs. Type In Sales. Internal Sales. Affiliate Sales. etc etc. Give me an example and I could give you a price range :winkwink:

Of course if you're going to sell to Shap you have to figure out what the site is worth, then cut that in half, and then subtract 10%....then he'll buy it.

You'll get even less if you sell to Pierre.

Friggin TGP guys are cheap bastards :winkwink:

If you sell to Pierre here is the formula

(Monthly Profit * .33) - (Cost of domain Move for Him $15) + (Guilt Factor) + (Sarcasm) = Price he pays

BTW Bouchaine what happened to all the sites you were managing for awhile?

G

:thumbsup Nothing ... still managing them and got some new ones. What made you think I wasn't doing it anymore?

I didn't know you were running Erica Campbell now.:thumbsup

I think he still runs these sites, www.supermodelcash.com

I would guess people would think because you have someone else in your sig that you don't have any of your own business...just my observation

I don't see you promoting them anymore that is why I asked.

I am working with Tim and Flashcash running the members area for http://www.busty-amateurs2.com/ and all the front ends that Flashcash designed for http://www.busty-amateurs-is-back.com/. Basically the same things I did for Jeff back in the day with the original BA.

G

Hit me up when you get out to San Diego again foolio, I opened a lounge downtown http://www.30-two.com/index.php is the almost finished web site. Definitely come and kick it with me.

G

Nice Lounge :thumbsup

.

from a business perspective and from experience, i can tell you that the only value in a website and primary frame of referrence for its valuation is its revenue stream. any true formula would be based solely on that. non exclusive content and design/programming are not worth a whole lot imho.

its up to you to decide how stable that revenue is and whether or not it could be expected to continue... and that would be based on the history and how far you think it could reasonably go into the future (excluding all the "i have a dream" rationalizations and ideas for how you would do it better... thats not a proven thing. its history is)

Keep 1 very important factor in mind along with all the other many variables in this question. As the site owner you are making money each and every week/month/year as the owner so the only way it makes any sense IMO is to be cashed out and for it to be a very high multiple. If its not, then why would you even consider the offer? The only way I could walk away is for it to be way worth it, otherwise I can just own it and collect the cash every month. I am sure Shap will agree with me on this(actually I know he does considering we discussed this very thing at lunch in Phoenix :winkwink:) How are you bro?

Lou

I value my sites at 3 yrs worth of profit. Most of them have been running and growing for over 5 yrs so anything less than that wouldn't be worth it.
I know owners who've stopped updating sites for years and still get a monthly return (although diminishing) for each month for all those years. One enterprising mate from the UK, didn't update for a year - when it came up to being 12 months old he simply changed the year on the updates and not the month so it looked like it was new updates!
seanchai

LMFAO!! Yeah that pretty much sums up Pierre, however you have to add more sarcascm and guilt factor into the equation. :1orglaugh

DH

In your case that's true, however sites as successful as yours almost never hit the market because there are very very few people who could write you a check for what your site is worth.

Most of the sites that are for sale are ones that aren't making the owner a profit, or making a very small profit, and if they're bought by someone who knows how to run them well the buyer will get a nice ROI.

Then there's also the occasional person who wants to make a clean break from adult altogether and sells out for a discount.

1X of annual net income, plus the value of your domain, is probably pretty close.

It's very fact dependent.

Well for us I really wouldnt know what else to do with my time. I love going to work. I feel the best personally when I put in time and we as a team are getting things done. I love to have fun, party, invest, etc... but I feel great when Im going into the office and things are coming together like we plan them to be whether it be a new project or a small deal we are trying to finalize. Lots of programs are alot of fluff and its hard to put a value on that. There are lots of companies with real assets such as content, hardware and software and perhaps a nice peice of property, etc...then there are others that are generating millions per month, but paying out millions per month with very little room for error each month so every case is so different.

I will for sure. Glad to hear you are still in the entertainment biz out there. The lounge looks dope. And glad to hear you are working with the peeps at Flash Cash. I'm actually working with the fine peeps at JuggCash.com. Honestly, I think they have the best big boob gig going. No disrepect to Flash Cash, but all the images on http://www.busty-amateurs2.com/ are the old pics from Tim H. Dude, I have almost all the old busty sets on an old external hard drive. I still love Daisy and early years of Aria :)

There are a couple reasons why SuperModelCash.com is not in my sig right now. The first being that D$ and I are opening www.SideCash.com in the coming weeks. It will have top of the line software running it. So for now, I don't want to promote SuperModelCash.com and get more webmasters to signup when we are going to open the new program thats going to be the home of all my pay sites and all the model sites I run.

And Jace, do you know Ashley from KY? I'm going to visit her, Tommy, Katrina and some others over the summer. It would be even better if you and your girl could make the trip too :thumbsup

yeah man, I know ashley, i didn't think she still lived up there though.

I seriously doubt we can make it up there though, we try and stay away from Lexington as much as possible...there is some BAD shit up there and I prefer not to be a part of it. I love Tommy to death, and I would love to see Ashley, but Lexington is a vortex of a shit hole and I probably will never step foot in that town again for the rest of my life.

have fun though...hehe

I can totally understand. That is my home town. Drugs, addiction and drunks. I usually spend my time with the fam when I go back. But Ashley is way cool and I'm going to Cinni this summer so she said I should come down to Lexington to hang out a couple days. We'll see how it pans out. I'll take pictures for ya:winkwink:

In Cinnci here. IF you like hit me up on ICQ 4009474

you hit the nail on the head man...LOL
keep me updated though, in all seriousness if there is a flight around that time up there for cheap I may just hop on a plane and meet you

hey yo, speaking of which....do you have ashleys email and shit? if so can you email it to me, I would love to at least say hi, it has been 3-4 years since I talked to her

are you guys talking about lexington, ky? i thought i was the only person that sold porn from kentucky :P

There is no formula.

Some people will say it's 3 months. Other's 6, some 12, and those sitting on gold will not go less than a couple of years worth.

In the end it comes down to what someone is willing to unload it for, and what someone else is willing to pay. The end.

A good domain's nice. Exclusive content, and a few years of it, all the better. Rebilling members, monthly revenue, and traffic are the crown jewels.

In the end it's subjective to numerous variables beyond that, ending in the buyer and seller.

:2 cents:

dude, there are a few people in Lex...in fact, one of the largest tgp guys is in lexington ;)

ask around, you will find more too :)

I lived there for 13 years, until I wised up and realized it is a shit hole drunk tank haha

the only things there are to do in lexington are drink, eat and do drugs....

Those who are selling, 3 years, those who are buying, 3 months.:)

Email sent bro. Hope you can make it up there for a couple days.

I'll add you to my ICQ. I'll be in the Cinnci/Lexington area for a week or so. I'm always down for meeting new webmasters.

I agree with this.

Why would anyone sell a program (or anything else for that matter) for 3 months of income?

Depending on the site:

6-12 months income
branding
# of affiliates
# of members
scripts
exclusive content or not
design

:1orglaugh

You'd be so surprised. It amazes me. Some of the deals I've worked out and I'm sure the same for Pierre just blow my mind. I guess when you need money or want out that's the way it is.

Real world business valuation is based on earnings (not rev), growth, and stability if you want a really oversimplified answer.

Not suprisingly 'site' valuations seem to be more in line with whatever numbers joe-blow cares to pull out of his ass :) Granted ultimatly a site is worth whatever someone is willing to pay for it so who knows maybe joe-blow is on to something.

Either way I'd probally try to get a more reliable source than random board posters if you're serious. :2 cents:

there are lots of cities in the US where that is true. we should have a big ass kentuckiana webmaster convention. better yet, lets just go somewhere eat, drink, and do drugs :D


edit: im actually from louisville, not lexington. its only like an hour and a half away though.

If it's a single girl site, even less since you'll eventually run out of updates & every girl who retires seems to pop up somewhere else eventually.

Gavin, your new place looks insane... nice wine list!

xoxo

yeah, content price, domain value, existing members, retention, and monthly profit.