valuation as multiple of revenue?

[discdrome]

Wasn’t sure if to post here or under domain valuations, but I am not really after a full valuation, just what kind of multiples domains of this quality should command?

What are the feelings on value calculations for a top .co.uk name with the venue and stats as below?

www.gadget.co.uk

I had somebody interested in the domain but it fell through last month, since then I have turned it into an Amazon affiliate site and am very happy with the results so far.

As far as value is concerned should I aim for 3 years? Or up to 5 years revenue? Of course I also understand that this would propel this domain to a top co.uk sale. (over $100k)

Average daily visits for August is 2k and total for month is 65k

Google rev is averaging $5 per day = approx $150 month

Amazon Rev is averaging over August £1600 = approx $2700

Commission from banners for August = £100 = approx $170

Total monthly earnings around $3k

Other things to consider though are below :-

1). Domain traffic has grown dramatically over last month due to Amazon product range and search engine spidering, domain used to get 150 uniques / day ave for last 3 years.

2). The current revenue may not continue? It may increase, but who knows. The traffic so far is mainly google, all other engines are sniffing around but not a lot of traffic just yet.

Look forward to reading any replies.

PS, I dont know if I would sell this domain now, or just take the revenue.

Regards

Steve

 

[Zeeble]

I think with a top domain such as this, you should also look at it from the point of view of development. As you know, this domain has TOP development potential. IMO, you should aim for 5-6 years revenue due to its potential.

 

[OgieOgalthorpe]

But in this case we are also talking about valuing an AWS site - where the future revenues could greatly fluctuate depending on how search engines decide to handle what is for all intents and purposes, duplicate content.

 

[discdrome]

Thanks for the replies, both of you have valid points. I guess one of the main things is that I have proved that it is a viable name with a lot of potential, the AWS may be short lived, but the site also has a lot of development potential.

Many Thanks

 

[Edwin]

Are you able to separate the pure typein traffic from the search engine-powered traffic?

I would go for a very high multiple for the pure typein portion, and a low multiple for the SE traffic.

So (fictitious figures) if 10% of your traffic came from typeins, I'd use a figure of anywhere from 10-15 years for that portion of your revenue, then perhaps 12-18 months for the rest (to reflect the massive uncertainty of SE-based traffic)

Adjust the latter figure up if the traffic is propped up by a large number of incoming links from "quality" sites, and down a bit if it's just 1 search engine driving the lion's share of traffic.

Add the two values together and see what it comes to.

 

[Zeeble]

But in this case we are also talking about valuing an AWS site - where the future revenues could greatly fluctuate depending on how search engines decide to handle what is for all intents and purposes, duplicate content.

You have a point. However, with a premium domain such as this, the revenue is just a bonus, rather than the deciding factor in the selling price of the domain.

 

[discdrome]

Thanks Edwin,

That sounds a sensible way to value this domain, appriciate your thoughts.

Steve