It may seem like you are deciding the price you can sell – based on complex formulas of one sort or another – but in reality the prices are being determined by the play of market demand and supply. When demand out paces supply, the sellers can ask good prices (based on whatever justification they can put together, but that’s just window dressing) Try using these “formulas” when the market is weaker. Then the buyer will be determining the “formula” and it won’t look like these!!

It’s a complicated issue, but one that I would love to see written out in some detail here.

Out of interest – what are you basing your 400k figure on? hits, current earnings multiplied by a time frame? Don’t feel you have to disclose too much but am interested into your working out of the figure.

I’d probably be willing to begin thinking of selling my blogs for a minimum of 18 months earnings – but would be a bit reluctant to do so as they are still in a period of growth and I suspect next year would see me easily earn that kind of figure…..

What do others think?

Now I don’t think you’re going to be able to sell for a few (2-4) times projected earnings. But if you look at projections for the near term, 6 months lets say, and make some numbers based on that, it will hit in the middle of the road. Hedge the risk you could say.

The problem with not factoring in growth is that in a years time I could be making in 2-3 months what the “value” of the site is otherwise. That would be eternally frustrating.

Also, I know 400K sounds like a lot (before I started thinking about it, 400K sounded like a whole lot), but after taxes it really takes a hit. That will put you in the top income bracket, which is 40% off the top (In the US, income tax + FICA on the first 90K or so). Writing a 160K check off to the IRS would be a major blow.

The costs should not be overlooked, I’ve discussed this with someone who sold two mid size (7 figure sale price) sites (once his own once as a negotiator). Anytime changes are made to the contract, and the contracts do get lengthy, your lawyer needs to look it over. For a smaller site like we’re talking I would expect the overhead for the deal to be in the 15,000-20,000 range (excluding a negotiator which is a great idea and will probably make you more) unless you happen to have a contract attorney as a good friend.

In the case of most personal weblogs, if the owner abandons it completely, posting stops (or is continued by an entirely different person) so the site has no value aside from the “tear it down and rebuild” value of the domain name.

This means that valuing a weblog by its traffic or its earnings may not work, because when the original owner stops posting traffic and earnings may go down.

I was thinking about the ongoing relationship thing with the site last night. I guess you could package your own ongoing posting services with the sale to increase the value.

I agree with your thinking on how you came to your price Jon and would come to a similar figure to sell my collection of main sites – a combination of current and projected growth.

What about others?

Hmmm – so now we just need to find some buyers with a spare half a million in their pockets… :-)

Jason