High Traffic Content Site - Who to sell to?
If we have a high traffic content site, lets say alexa 2500. In the entertainment industry, making us ad revenue in mid xxx,xxx a year, who can we potentially sell it to even for 3x yearly revenue? I want to cash out and get in on a new idea I have and use money from this sale. We are in Toronto, and our site is about Celeb/Movie etc, we can keep running it, but its becoming problematic. Should we approach say Cable companies? (Rogers, Shaw?) (CBS?) Just wondering how companies like Sidereel or MetaCritic where able to sell themselves...
4 comments
Your valuation multiple (ie: 3x annual revs) is going to vary widely for a content site. @pitchups makes a good point about profits being used instead of revs, especially if you're buying a lot of traffic.
The reason multiples are low for content sites is that content needs to have a constant rate of production to maintain much/any revenue. Non-professional service businesses (like carpet cleaning, not like accounting) have the same issue & many sell for 0.5-1x annual revs. You won't be quite as bad off though, since you should have a much higher margin than a carpet cleaning biz.
Some things that might help you attract a higher multiple: membership site with frequent logins, high growth-rate (ie: you discovered the right niche or marketing), or advertiser contacts (like direct advertiser or agency buyers, instead of revs being run-of-site or AdSense).
If you don't have any of the above going for you, then you'll have a hard time finding 3x.
The reason multiples are low for content sites is that content needs to have a constant rate of production to maintain much/any revenue. Non-professional service businesses (like carpet cleaning, not like accounting) have the same issue & many sell for 0.5-1x annual revs. You won't be quite as bad off though, since you should have a much higher margin than a carpet cleaning biz.
Some things that might help you attract a higher multiple: membership site with frequent logins, high growth-rate (ie: you discovered the right niche or marketing), or advertiser contacts (like direct advertiser or agency buyers, instead of revs being run-of-site or AdSense).
If you don't have any of the above going for you, then you'll have a hard time finding 3x.
Is it not a possibility for you to transistion out of actively running/managing the site and hand it off to someone else who will actively grow the site whilst maintaining the income and allowing you to follow your new idea?
This way you can make sure you get a decent price AND sell to the 'right buyer' rahter than just cashing out and potentially leaving your community in the lurch.
This way you can make sure you get a decent price AND sell to the 'right buyer' rahter than just cashing out and potentially leaving your community in the lurch.
That is what i am doing now, but as you know, if you are not doing anything yourself it will never be as you want it, and thus the site I guess is slowly declining and I am focusing on my new venture and thus can't keep coming back to this and actually need the funds as well.
What is the profitability of the site - say as % of revenue. Most buyers would want to pay a multiple (say ~12x) of the net profits. Also they would consider if it would be possible for them to run the site without your contribution.
I'm curious, what's the site?