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Site Flip: Buying and Selling Websites for Profit

Wednesday, July 05, 2006

Website Appraisals 101: Content Appraisals

Here's a basic how to guide on website appraisals: what factors to consider and what each is worth. If you enjoy the read, consider my free newsletter.

For anyone interested in flipping websites, the appraisal process is one of the most important to master. It will allow the expert appraiser to find a bargain and get the ill-versed to buy a website for a price hugely above its true value. The most important factor in appraising a website is its content.

Other basic factors to consider in any appraisal are revenue, SEO, traffic and design. I'll cover those in future articles.


Content is the first and foremost asset of a website on today's Internet. Nobody will go to a website with no content, so that a website that lacks content may as well not exist. By content I mean anything that people can interact this, including articles (reading), software (downloading) etc.

Consider the Google search for Home, which returns a front page full of newspapers and other content websites.
Consider why anyone would link to a website that had no content?
Consider whether anyone in the world has willfully linked to an "error 404: page not found," webpage.

Content, as you'll see me emphasize on my SEO blog, is king.

The problem is that it is difficult to value content. In part, this is due to the fact that there exists considerable difference between what different publishers will pay for content. Newspapers (here in Canada, at least) pay $150 for a regular length story and $400 for a feature (1000-2000 words). Online publishers such as SitePoint pay $40-100 per feature length article.

I believe that the key valuation points for content are utility, technical quality, time invested, and the hourly cost of production. Allow me to explain what I mean by each of these four factors.
  • Utility - How helpful/useful is the article? Pillar articles such as guides, how tos, and other feature-type pieces (in the 1000-2000 word range) are usually the most useful. Utility is an assessment of the richness of the information presented.

  • Technical Quality - Assessing the content based on technical standards, how good is it? For example, if the content in question is text, quality can be judged by how interesting the author makes his subject, his clarity, and other measures. Software can be judged by its ease of use, features, etc.

  • Time Invested - How long was the creator working on his content? Research, production (e.g. writing, recording, filming, coding etc.), and editing are naturally a part of this, but training of the author places a premium on any time invested, as it was an expert performing the research and so on. This is measured in hours.

  • Hourly Cost - What could the person reasonably charge for their time? What would it cost per hour to have someone else with the same qualifications produce the same content? High-powered lawyers have been known to charge $500-1000/hour, but you can just as easily have a $100/hour lawyer file a lawsuit for you. Hourly cost is the average of what the person could charge per hour vs what someone else with the same capabilities could charge.
Personally, I would add a factor of plus/minus (+-) 0.7 for utility to another factor of +- 0.6 for technical quality. (I weight utility slightly more heavily because you can wade through a boring text that's information rich, while being fascinated by a useless article, podcast etc. serves no one.)

The sum of Utility and Technical Quality I would multiply by Time Invested. The product of this multiplication would itself be multiplied by the average of the author's hourly cost and the equivalent hourly cost of someone with the same qualifications.

The final mathematical equation looks like this: (+-0.7U +-0.6TQ)(TI)(Avg HC) = Appraisal of a Website's Content, or Content Value.

I know this unit based appraisal system becomes difficult to perform when a website has hundreds or thousands of pages of content (software is actually easier, while music and video are grey zones given differences of personal preference). This problem could be solved using a random sampling method to pick a sample of 10% of the content, and then averaging out the appraisal of that 10%.

Note: These numbers have been picked because I consider that they will give a fair and logical appraisal of a website.

Related articles are archived in the topical categories , .


  • At 5:34 PM, Blogger Kenny Carter said…

    Thanks for this Guide, I just wanna ask also of there's any guide for using a site builder? I just want also to understand the Cafe24 roadmap. Thanks!


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