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Re: web site valuation
From Patrick Rogers at on 13 March '00
replying to web site valuation posted by martin williams

>I am shortly going to try and draw up a buisness plan for a site I intend to design. It will be information and not sales site, so I was wondering how do I etimate its future value maybe from advertizing revenue. The more visitors, the more it would be worth, so is there a formula for this, I`m stuck !
>Any help would be appreciated.
>with thanks,
>Martin Williams.

Advertising revenue models are not looked upon kindly anymore. Even
places like Yahoo! have moved a large portion of their revenue
earnings off advertising and onto sale/service-based items, such
as Yahoo! Store which is selling a service.

As far as figuring income on an advertising model, what you need to
do is some major research into the number of people on the web who
would be interested in your subject, then, figure out who your
competition in, and estimate out the real amount of eyeballs you could
peel away from them ON A REGULAR BASIS. from that number divide it by
half (Yours is probably too optimisitic)

If you're charging on a per impression basis, then that is the number
"payments you would get." Per impression ads run usually about
a penny or so an impression.

Divide again by about 100 AND that is approximately the number of
click-thrus you can expect.

Divide the new number by 100 again, and that is the number of sales
the other guy will get (if you are on a commision)

Assuming 10,000 hits a month, you'd end up with maybe few hundred bucks
a month if you're lucky.

I would advise you too figure some way to sell something, either have
a "free" section and a section where you have to pay for access,
or find GOOD related affiliates you can use.

Good Luck!

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