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domain name / website revenue multiples

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3par

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Correct me if I am wrong, I see domain names selling for upto 6 years revenue, and website for about 1 year's revenue.

First, compare to stocks, which typically priced at 20 times earning, this domain valuation sounds quite low. And we are talking about a booming industry here.

Second, click for click, why such a big diff between domain name only and the site? Only explanation is that the domain itself commanding much more valuation than the content/traffic.

Just some random thought here. Comment welcome.
 

BiggieBiggie is verified member.

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what u r seeing is only in the reseller market

end-user market is much different


also a domain by itself can command much a higher value or equal to a website, because there is no maintenance cost, except to renew.
 

webfreak

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3par said:
Correct me if I am wrong, I see domain names selling for upto 6 years revenue, and website for about 1 year's revenue.

First, compare to stocks, which typically priced at 20 times earning, this domain valuation sounds quite low. And we are talking about a booming industry here.

Second, click for click, why such a big diff between domain name only and the site? Only explanation is that the domain itself commanding much more valuation than the content/traffic.

Just some random thought here. Comment welcome.
As PPC sites usually pay monthly, the unit you should be concerned with is the month, not the year. So, domain names are actually making 72x earnings, with your example website, that would be 12x.

Websites that earn serious $$$ are usually sold for more than 12 months revenue anyway.
 

3par

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according what you say, still name/site has very low multiple comapred to stock. think about it, if a domain/site will pay for itself in a couple of years, why not everybody is buying?

the PE ratio sounds too good to be true. something is missing?
 

GT Web

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what is missing? a lot more risk....

Search engine positioning may drop, click rates may fall significantly...there are a ton of risks...especially when buying a live site. This higher risk is what leads to the possibility of higher returns...
 
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