Not all sites are created the same, and there is actually not a single appraisal system that can accurately tell which kind of sites that are more valuable than the others.

The saying, “A site’s worth is as much as what you are willing to pay” is true to the core; you can’t dictate how a site is priced on the market – the market will determine whether the site is worthy enough to be tagged with a certain price tag.

Of all kind of sites, there are actually two major ‘classifications’ in which sites can be grouped in: Revenue-driven sites and potential-driven sites. Let’s explore a bit about each.

Revenue-driven sites

Obviously, revenue-driven sites are those that are generating revenue, most likely on regular basis. Such sites are built with an intention to make money – e.g. eCommerce sites, eBook sites, service provider sites, etc.

This kind of sites is a keeper – meaning, you can have all the profits you can enjoy while keeping up the development of the sites. Some site owners, however, don’t think that keeping profitable sites for too long is wise – Read Flippa’s blog post about the reason why people sell proftable websites.

What’s the value of such sites? Depending on the niche of the sites, they can be valued at anywhere between 3 to 20 times monthly revenue. I’ve seen some sites were sold for less than 2 times monthly revenue, while others were sold for more than 40 times monthly revenue.

Potential-driven sites

If you haven’t notice, not all sites are revenue-driven – or in other words, not all sites are made to generate revenue. However, let’s make a simple clarification here.

In site flipping marketplaces there are listings claiming, “a site with great earning potential, up to $2,000 a month” and such. The truth is, such site is new, so new that no revenue can be mentioned at all. Sellers always use the word “potential” to mask what their sites really are: New sites with unproven prospects; they could either make it or not, which can actually be found by the buyers.

What I mean by potential-driven sites are those that bears great monetization potential but non yet implemented any monetization methods for various reason – and believe me, not all webpreneur want to generate any revenue from their startups – they aim for a bigger reward: Grow the sites in quality and potential in such a way that they can eventually sell the sites at high-end price tag.

An example of such kind of sites is Retweet.com (read Flippa’s blog post about the sale.) Retweet.com was sold for $250,000, a Flippa record sale, despite the site generates no revenue.

What’s the value of such sites? For this kind of sites, the sky is the limit, really.

So, what kind of web assets do you want to own?

Depending on your resources, the safest bet would be to own sites that have a good earning potential to cover operating costs. If you pursue potential-driven sites, just make sure you have the funding to support the operating costs (with Retweet.com, your hosting cost alone can be in the hundreds of dollar a month.)

All is coming back to your vision in webpreneurship: Are you going to make money via cash flows or capital gains? If the former, invest in revenue-driven sites. If the latter, invest in potential-driven sites.

Ivan Widjaya
Web property investor