Internet Business Valuations have forced some unique challenges on those who attempt to value them. The DotCom Bubble was based only on potential, "eyeballs", "first mover advantage" and a host of other non quantifiable issues.

Internet businesses are unique, but not impossible to value. Beside the standard income and balance sheet numbers the following represents some of the other issues to consider: affiliate networks, databases of customers, visitors, "cookies", and opt-in email lists, advertising sell through rates, search engine rankings, website traffic and sources of traffic, content value, process patents, "stickiness" of the website and visits to sales ratios.

Additional expenses that must be considered carefully are hosting fees, maintenance and tech support, server farm streaming fees, website optimization costs, daily site refresh costs and periodic creative redesign of the website.

Calculate by Revenues

One way to get an idea of current valuations of web properties is to use a multiple of Trailing Twelve Month (TTM) revenues that the site has generated. Our analysis indicates that mainstream web properties are selling at the following median multiples:

• E-commerce sites: 3 x TTM

• Content sites: 6 x TTM

What Do These Numbers Really Mean?

The calculations on this page reflect the median valuations for our sample of 100's of web transactions. In other words, more sites sold at or near this valuation than they did at any other valuation.

Actual prices paid vary tremendously based on type of audience, duration of visit, nature of activity at the site and a number of other factors. In general, high-traffic sites command a higher valuation per Unique Monthly Visitors than smaller sites because they deliver significant market share increases to the buyer.

Valuation Services

Venture Planning provides valuations for any of the business scenario. For webcentric businesses with only short term (less than 3 years) operating history contact Venture Planning Associates for a web analysis spreadsheet.

Venture Planning Associates also provides valuation of sole proprietorships, partnerships, or corporations with one class of stock, and provides comparisons with industry standards.