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The Best Way To Estimate Your Website's Value

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In the offline world, people value their properties based on what real estate agents tell them they're worth, mixed in with a "guesstimate" of what the owner thinks it's worth. Of course, whoever buys the property makes the final decision as to how much it's worth when they part with cold hard cash for it.

When you look online you see that websites are more difficult to value. Some people go for domain-name valuations, but they are speculative because everyone knows that the real value of a domain name comes from what you do with it. There are very, very few domain names that get traffic just from people typing the domain name into a web brower. It's likely that most of those phrases being typed in are trademark terms and are owned by the trademark holder. So, without a functioning website, not many domain names are valuable.

What if you have a website? What do you base your valuation on? Well, if you wanted to, you could collate your traffic and sales data for the previous six months and show it to prospective buyers. A rule of thumb is that a web property will be worth about 12 times the monthly profit it generates.

Of course, there will be some websites that aren't obviously sales-based. How do you value those sites? Well, you could look at any income generated via affiliate links, and you could look at income generated from advertising. But one of the most common things to look at is PageRank.

PageRank is Google's system for determining how "valuable" a web page is. If your page has high PageRank, it's likely to appear near the top of search engine results for any query containing words and phrases relating to the page. Webpages can also pass along PageRank and thereby help other pages to get indexed by Google and rank higher in natural search engine results.

So, if PageRank is valuable, why not base a website's valuation on it? If a website doesn't generate income, but has high PageRank pages, it's still a valuable web property. Some websites sell links on their pages based on the PageRank their pages have. The higher the PageRank of the page, the more it costs an advertiser to place their link on that page.

Ultimately, it's the buyer who decides on the value of the web-property, but if you're looking to sell a website, it can't hurt to get valuations from as many different sources as possible.

Article Source: http://www.freeforallarticles.com

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