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Top Three Factors to consider when Appraising a Website

Updated on November 28, 2009

Traffic & Domains

Domains are very important when assessing the value of a website. Premium one or two word generic Top Level domains can greatly add to the value of your website. This is because premium domains bring in type in traffic which ultimately means that your website has lots of natural traffic; traffic which you do not pay for. A website sitting on a high quality domain tends to be highly valued irrespective of the kind of content on the website.

Even where the domain may not have much in type in traffic, a website with high traffic still receives great appraisals. It is a good idea to have a record of traffic to your site. This record should include actual numbers as well as demographics of where the visitors are coming from. You may find that some buyers will only consider traffic coming from developed nations whereas for others it may not matter. These website stats are a common standard feature with most hosting companies. There are also other free stat applications on the internet such as Statcounter which you can install on your site and get real time stats on your website traffic. There is also Google analytics which we recommend you enroll with as soon as you sign up for an Adsense account. It is free and provides excellent statistics of your site performance.

Site Stability and Profit Record

One of the other factors that is crucial to increasing the value of your website is the stability of the site as well as a record of profitability.

Site stability is looked at from the point of view of how old the site is. It is common knowledge that most sites on the internet do not last for more than one year. Hence, if your site is more than two years old, then it has more value in the eyes of potential buyers. It becomes even better if your website has become recognized and the brand established.

Profit record is just as important. Your website must have a record of profitability from traffic sources that will not dry up overnight. No one wants to buy a site today and then have the traffic disappear. Websites with profit that flows in from minimal work are even more preferred because it means the buyer need do little to maintain the revenue stream; the current web jargon is sites on “autopilot”.

Site Potential

The final of our three most important factors is site potential. This refers to the additional monetization potential of your website. A buyer will often look at a site and see whether there are further monetization options. This was very much the case with the Newscorp acquisition of MySpace. Newscorp saw the potential that MySpace had in sending traffic to Fox news TV sites. 

In this regard it pays to do some research on a potential buyer to determine what it is they are looking for so that you can give them insights into how they can further develop the site and increase its revenues. Most buyers are willing to pay a premium if the site has untapped potential. It is not uncommon for a few minutes of work on a site to result in double the revenue streams.


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