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What's a website worth?

17 October 2008 - 12:00am

With the oldest media websites turning 14 this year, Borrell Associates teamed up with BIA Financial Network to analyze local Web site revenues, expenses and growth trends in “What’s A Web Site Worth? Valuation Metrics For Local Web Sites”.

What emerged was another strong indication of the fundamental changes taking place in the media industry: local Web sites generate important value for their owners, especially for owners that have positioned their sites for growth in key high-demand advertising categories such as e-mail, streaming video and paid search. Some of these local Web sites are worth between $300 million and $450 million, and even small sites are seeing values in the low millions of dollars.

The oldest newspaper, radio, TV and “city.com” Web sites turned 14 years old this year. In that short time span they have evolved from being interesting experiments to become their parent organizations’ centre of attention and financial saviours. Some of them now generate millions in revenue and significant profits, and have high potential for continued growth – begging the question of just how much these local Web sites might be worth.

Not all local sites are created equal. Newspaper-owned Web sites tend to have the highest revenues, but their valuations are constrained because their growth rates have slowed and they are selling mainly banners and listings – relatively slow-growth advertising categories. TV, radio and local pure-play sites tend to have higher multiples associated with their valuations because they are better positioned for future growth.

http://www.borrellassociates.com/reportDetails.aspx?prodID=120 
 

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