Ever wonder how domains are valued? You know, like how do all the websites out there place value on a site? I’m guessing the algorithm involved is a trade secret right? Even though at may be as simple as the one we are proposing. In all honesty, I almost find it hard to believe these sites can properly value a site if they do not have the appropriate usage statistics at a minimum. Sure there are other sites like Alexa that claim to know the information, but based on my experience they are completely off.
Naturally, I’m a skeptic. I always like to try to simplify the math and share it. Let’s take a quick second and see how we can value our own websites using the data we are already gathering from Google Analytics or Webalizer.
In order to make this work and properly gage your investment of hard work and dedication, we need the following website statistics to make this work:
- Question One: Total Visits. –> Use the previous months stats.
- Question Two: Duration. –> Tell us how long (on an average) each user spends on your website.
- Question Three: Expected price per minute. –> As a baseline, lets use the federal minimum wage ($7.25) and boil it down as price per minute ($0.12). Our goal here is to at least price the site based on minimum wage.
Here is the code (C++):
{
string mystr;
int quantity=0;
int my_visits=0;
double av_duration=0;
double pm_value=0;
double mn_value=0;
int mn_hour=60;
cout << "Enter Total Visits: ";
getline (cin,mystr);
stringstream(mystr) >> my_visits;
cout << "Enter average per visit duration: ";
getline (cin,mystr);
stringstream(mystr) >> av_duration;
cout << "Enter per minute value: ";
getline (cin,mystr);
stringstream(mystr) >> pm_value;
mn_value=my_visits*av_duration;
cout << "Total (minutes) consumed overall: " << mn_value << endl;
cout << "Total (hours) consumed overall: " << mn_value/60 << endl;
cout << "Total (days) consumed overall: " << mn_value/60/24 << endl;
cout << "Total (weeks) consumed overall: " << mn_value/60/24/7 << endl;
cout << "Total (years) consumed overall: " << mn_value/60/24/7/12 << endl;
cout << endl;
cout << "Website value based on input: $" << mn_value*pm_value << endl;
return 0;
}
I went ahead and ran the numbers from the past month of usage statistics from a random site. According to the math in this example, the sample site is worth a whopping $11,969 dollars for the month! Now multiply that by 12 and you get $143,628. I’d say that’s a fair investment on content, and a fair market price for a site that pulls in this type of traffic (see below). The math doesn’t lie, I firmly believe this is a simple conservative approach to applying a monetary value to your website and allows you to see if you hard work has panned out or not and if you are looking to price add space for potentual advertisers, you have something concrete to build from. Continue reading “Quantifying Domain Value” »
