The Truth about Blog Sales: Show me the numbers.

Filed as Uncategorized on July 20, 2006 10:42 pm

There’s been alot written about how to go about buying a website – here and elsewhere. Do you look at traffic? At revenue? At the potential – a fuzzy term if I ever heard of one.. and everyone has their own opinion about how to value a website.

I’ve bought and sold many websites and blogs in my time – including this very one. For me, it comes down to two simple things.

  • The site’s income
  • The potential that I see to grow that income

And other than some basics (i.e. is the site legally encumbered in any way, shape, or form), those are the core facets that I’m examining when I look at a site that we may consider purchasing.

Income is critical – because if I am going to expend capital, I have to be able to know that I can repay that initial capital and earn a decent rate of return for BlogMedia while doing so. Otherwise, our capital is better off sitting in an investment account earning a return until we do find such an opportunity.

What reminded me of this practice today is a writeup on TDH about the sale of College-Startup, a blog written by Ben Bleikamp, whom I consider a friend. College-Startup, which never earned more than $44 a month, was sold to David Krug for $1400 through an auction on Sitepoint.

With an income of around $44.00 each month, the most that I would have been willing to pay for the site was around $792 at the outside. This reflects 18 times monthly revenues – which is really my outside limit for purchasing a blog or a website.

Now others may be critical of this low dollar amount and say that the “design is worth more” and so on… but great design is only as good as the earning potential of a site.

Website auctions and blog sales often come with lots of emotional baggage that can drive decisions by both buyers and sellers – I would encourage both sides to put some hard thought into the numbers…

Because in the end, you have to pay the bills, and hopefully turn a profit.

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  1. By David Krug posted on July 20, 2006 at 11:34 pm
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    Matt,
    You know I value sites differently. When I looked at the site I based much value in the domain name. The userbase and my prediction of an upgraded pagerank listing. Which it did jump from a pr5 to pr6 the day after my purchase. (Bargain Purchase)

    A PR6 is something I needed for leveraging purposes. I looked at the cost of the site as easy to make back the 100+ dollars a month I would need to make on it.

    Using tools like Text Link Ads, Direct Ad Sales and the Like I feel like I can bring in a static 200+ dollars a month in advertising dollars, increase the traffic through good SEO and make a good amount by affiliate marketing, and video blogging.

  2. By Matt posted on July 20, 2006 at 11:44 pm
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    Yup, I know you do. And I respect that.

    But the $44/month post at TDH made this a good example to use for a point I wanted to make.. and you’re really the exception to the rule – I expect that you’ll be successful with College-Startup.

    But most bloggers couldn’t pull it off.

    Matt

  3. By David Krug posted on July 20, 2006 at 11:50 pm
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    I agree that most bloggers couldn’t pull it off. Heck I just now figured out I could sell the theme I dont plan on using it. Or even better give it away and build linkage.

  4. By JD Arney posted on July 21, 2006 at 12:22 am
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    Hey David, if you decide to sell the theme shoot me an email.

  5. By John Evans (SYNTAGMA) posted on July 21, 2006 at 2:50 am
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    What hasn’t been factored into the equation is the time needed to renovate and upgrade the blog, plus the blogging effort over time. I don’t think $200 a month is going to cover any of that … unless you wrk for nothing, of course.

  6. By David Krug posted on July 21, 2006 at 12:02 pm
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    John,
    You have a point luckily I hire cheap slaves to manafacture my content. So its never been a factor.

  7. By Mike posted on July 21, 2006 at 8:23 pm
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    I like ALL of David’s responses, which scares the hell out of me !

    I personally place more value on potential than I do current income, since I’m confident that I’m a more efficient and effective salesman than most blog owners.

    David, I hope you’re looking when I get ready to sell some virtual real estate … which will be soon.

  8. By Aaron Brazell posted on July 24, 2006 at 12:32 pm
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    I often wonder what types of valuations are out there – what kinds of formulas blog buyers use. For instance, I’ve toyed with the idea of selling my own blog or at least see what would be offered. I’ve never done it and not sure I will. I’m too scared to find out. :p

  9. Blog posts for sale makes blogosphere boil | tdhedengrenJune 12, 2008 at 10:45 am