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I'm buying an existing Web 2.0 site that could potentially generate millions currently not monetized

by Terry Ma
8 replies
Hi Warriors,

Update: All the details about this Web 2.0 site that has
multi-million potential are all described in post #3, #6 and #7.

I've got a question about buying out an existing website.

If that website is currently generating $1000 monthly.

Then how do you calculate it's selling price should be?

I remember I've read something like, that should be 5%
of the selling price? But I don't remember exactly.

What else is there that I should be looking out for
when I buy an existing website?

Thanks,

Terry
#buying #existing #question #website
  • Profile picture of the author Scot Standke
    Hey Terry,

    There are a lot of variables here. I have heard that 18 times the monthly net income is a general rule.

    Having said that, every situation is different depending on the seller and the buyer, if the website is on the upswing or downswing of its income potential and several other variables.

    Scot
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    • Profile picture of the author Terry Ma
      Originally Posted by Scot Standke View Post

      Hey there,

      There are a lot of variables here. I have heard that 18 times the monthly net income is a general rule.

      Having said that, every situation is different depending on the seller and the buyer, if the website is on the upswing or downswing of its income potential and several other variables.

      Scot
      The website I had spotted is a Web 2.0 type that
      I, myself had been a member of since 2006.

      Kind of like this Warrior Forum, but on totally different
      subjects (that's right, lots of different unrelated subjects,
      from jokes, to everyday chit-chat, to dating, to how to
      have sex, to news, to many different unrelated stuffs
      as I said) that has nothing to do with money making.

      And being a member of that site, I could see 2 things:

      1. It gets quite of a lot traffic, and pretty good SEO
      results due to the amount of content on the site,
      that's how I found the site in the first place.

      2. The owner has almost no idea how to monetize the
      site, I had been observing the site since then, and clearly
      see that there were absolutely NO SIGNS of money making
      mechanisms being employed by that site. So I personally
      contacted the owner, and he had told that he is, indeed,
      not making a dime at all, just pure expenses.

      That's because his original purpose in mind was to
      build a community for people to just hang out, chit-chat
      etc...

      Plus he hates marketing.

      Only recently had he started putting banner ads on the
      site, but still generating far less than $1000 per month.

      I would've bought this site at $65 000 without hesitation,
      IF, and only IF it was an English website.

      That's right, it's in another language. And I am uncertain
      if the type of marketing strategies and tactics that we
      learn in the English internet world could be used to monetize
      on this site. It may or may not.

      Nevertheless, this website has a huge upside potential,
      and I believe I had really stumbled upon a goldmine this
      time.

      It's not everyday that you can find a worthy website, which
      an owner had took years to build, but has absolutely
      no idea on how to monetize.
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  • Profile picture of the author Chris_King
    I sold a website for about 10 times my monthly net profit. But there are a lot of variables: how long the site has been making money, how much work is involved, sustainability of the niche, etc.

    I know there is a website that estimates site value but I don't remember the URL. Plus I don't know how they calculate it exactly
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  • Profile picture of the author tommygadget
    Why don't you ask him if he wants to sell it? Remember, don't tell him what you think it is worth, let him tell you. Then you know if you can negotiate.

    TomG.
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    • Profile picture of the author Terry Ma
      Originally Posted by tommygadget View Post

      Why don't you ask him if he wants to sell it? Remember, don't tell him what you think it is worth, let him tell you. Then you know if you can negotiate.

      TomG.
      I already told him I wanted to buy, what I had in mind
      for myself, is at least $26 000 - probably $65 000 at most.

      I haven't told him this yet. I just asked him that I am interested
      to buy because I see the potential of profit for his site.

      He told me, he had been approached by other companies
      before, one offered to buy his site at $13 000 and hire
      him as the webmaster at $300 monthly to continue maintaining
      the site.

      He told me the offer was too cheap so he refused it.
      (Heck, I think the price is ridiculously cheap too!)

      Then he asked me to teach him to make money.

      But I am actually more interested in buying the site
      and put all the marketing strategies and tactics to
      use on this site with my 100% undivided attention.

      Then abandon all of my current mini-sites, or sell
      them on the Warrior Forum as a WSO and focus
      all of my energy into promoting this one Web 2.0
      site that could potentially turn out to be a gang buster
      everyone in my country will talk about.
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  • Profile picture of the author Terry Ma
    hi Paul,

    That site has around 80 000 members,
    and constantly around 200 - 300 members
    online at the forum almost 24/7.

    Mind you though, none of these members
    (from my guess) are used to buying/shopping
    on the internet.

    And none of them had come to the site expecting
    to spend a dime on that site.

    Like I said in my second post. People
    come to here to hang out, to chill out
    and chit-chat, not like when visitors going
    to Amazon, which has the mindset of spending
    on the site already.

    So it does take quite some twists to monetize
    on the site.

    Adsense is out of the question because
    his used it before and got blacklisted,
    I guess he might have clicked on this own
    ads, so got penalized by it.

    Now his site is making around $500 monthly
    using banner ads.

    So, with the above information, who much
    do you think the site would worth?
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  • Profile picture of the author Terry Ma
    Why did you delete your post Paul???
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  • Profile picture of the author Terry Ma
    Anymore thoughts or suggestions Warriors?

    I'd appreciate everyone's input.
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