Selling a website - what are the multiples today?

[McSpike]

I am buying websites in mainstream and know what multiples they go for there. For a 10 year old content website (say a niche blog) with diversified revenue streams, stable traffic, decent SEO metrics, packed with unique content and being hands-off we can easily apply anything between 2.25 and 2.5 multiple.

What multiple should one apply to a website with aprox the same characteristics (not a tube, though) in adult?

[freecartoonporn]

depends on various things , but totally on how much is buyer willing to pay ... sometimes 10-12 months profit. sometimes even more.

[McSpike]

Would you say there's a buyer's market in adult and thus multiples of 1 (year) only or would you say the revenue sustainability is that uncertain? Because I don't see traffic trends to change that fast and neither revenue sources. There's always money to be made in adult one way or the other. So what contributes to 1 year multiple and not more?

[Adraco]

I have bought a lot of websites here. And I would be hard pressed to pay anything over one year's multiple. Simply because there are so many variables of uncertainty.
1. Traffic sources, google ranking will shift and free porn is everywhere. Quite different from a well written blog in mainstream.
2. Uncertainty in if I am going to get paid by the sponsors/traffic programs that currently monetize the site.
3. Site's own stability, what script is is built on, is that upgradeable, sustainable in the long run?

[McSpike]

Originally Posted by Adraco

I have bought a lot of websites here. And I would be hard pressed to pay anything over one year's multiple. Simply because there are so many variables of uncertainty.
1. Traffic sources, google ranking will shift and free porn is everywhere. Quite different from a well written blog in mainstream.
2. Uncertainty in if I am going to get paid by the sponsors/traffic programs that currently monetize the site.
3. Site's own stability, what script is is built on, is that upgradeable, sustainable in the long run?

All of what you said applies in the mainstream as well.

1. Free porn has been everywhere for the last 15 years. So?
2. Majority of sponsors I deal with (and I deal with a lot) have paid. I've seen maybe 1% of payments not collected and I really deal with a lot of them.
3. All of what you said applies to mainstream as well.

I'd say more than not it's closed industry and sellers have little alternatives. Not like in mainstream where you can sell outside the niche easily.

[Fat Panda]

ten months profit max

[faxxaff]

I have bought plenty of websites with stable numbers for 6 to 14 months of revenue in the past. In all cases numbers were declining shortly afterwards and there have been sponsors that ceased paying, etc., etc., etc. I found it really hard to turn old sites around.

Stable revenue and numbers are are not a positive call imho. I would rather pay 3 years of revenue for a new site with upside potential than 6 months for a 'stable income' site. Just my 2 Cents.

[mineistaken]

Originally Posted by faxxaff

I would rather pay 3 years of revenue for a new site with upside potential than 6 months for a 'stable income' site. Just my 2 Cents.

That is VERY unusual opinion. You may even be alone on this board to post that

[j3rkules]

It depends on many factories... unless I see the link I can tell much.

[fuzebox]

I wouldn't pay over 6 months profit.

[iSpyCams]

Any adult site that's making money, is making money because somebody is promoting it. If the buyer can't also buy whatever promotional engines are running, or plug it into his own network, the income will drop.

The promotional aspect is much more important than the site itself. Current income is likely meaningless, and "pump and dump" through black hat SEO and other short term traffic strategies are pretty common.

[faxxaff]

Originally Posted by mineistaken

That is VERY unusual opinion. You may even be alone on this board to post that

Thanks. It's a positive thing.

[The Porn Nerd]

Originally Posted by pompousjohn

Any adult site that's making money, is making money because somebody is promoting it. If the buyer can't also buy whatever promotional engines are running, or plug it into his own network, the income will drop.

The promotional aspect is much more important than the site itself. Current income is likely meaningless, and "pump and dump" through black hat SEO and other short term traffic strategies are pretty common.

THIS.

A site can be "profitable" with dwindling profits. Stable is rarely stable without a lot of promotion to keep it that way. Then again, it also depends on if a site can be optimized for future profit, if it can fit into an existing business strategy, and if you can scale by throwing traffic and/or new content at it. Profits - i.e., revenue - is not the only factor.

[iSpyCams]

Originally Posted by The Porn Nerd

THIS.

A site can be "profitable" with dwindling profits. Stable is rarely stable without a lot of promotion to keep it that way. Then again, it also depends on if a site can be optimized for future profit, if it can fit into an existing business strategy, and if you can scale by throwing traffic and/or new content at it. Profits - i.e., revenue - is not the only factor.

Exactly, it's about who is running it.

You can buy a great guitar, but you can't buy the skill to play it.

You can buy a fast car but not the skill to drive it.

You can buy a great business, but can you run it? That's the real question.

[iSpyCams]

Here's another way to look at it:

I wouldn't buy "an adult website" - I've done it and it universally turns out it was up for sale for a good reason. (as in good for the seller, not the buyer)

I WOULD buy a domain, I do it all the time, and CONTENT I do that all the time too, and SCRIPTS and DESIGNS.

So in the off-chance a site had all of those things and they were all useful to me, and the licenses were transferable, I might consider it based on the value of those assets.

Now income? From where? Affiliate accounts? Are those transferable? Not easily or reliably, also who are they with? Are those people reliable? How can I be sure they aren't about to close (or worse, ban the accounts due to abuse) It's a lot of work and hassle to find out, and you can never be sure.

Maybe, if it's a whole business up for sale with corresponding tax ID's, merchant accounts, corporate documents and bank accounts, that would be something else, but you wouldn't advertise it as a site for sale, that would be a business for sale.

But a site that is hyped for having good SEO and type-in's and bla bla bla, forget it. The minute you move it to another server and switch out affiliate links and whatever else, SE's re-evaluate completely and who knows what will happen to the ranking.

[McSpike]

You all posted valid points.

Yet... they all apply to mainstream just as well. Buying sites in mainstream is just as tricky as here with the exception that sites (publicly posted) are under much bigger scrutiny because the market is that much bigger. Thus 95% (probably more) of sites for sale fall off the lists because they are junk. So, junk is very much present in mainstream as well and only fools buy it, yet the good sites go for 2+ annual net.

I believe the same junk ratios apply to adult. Majority may be junk. Sure. Then why only 1 year multiple max for the good ones?

Someone said whatever site is making money is doing it because someone is pushing it. The same is true in mainstream. You have sites that are a full-time operation and ones that are hands off. Different multiple is applied to them, yes, but still this multiple is twice as high as in adult industry.

I've been making money without actually pushing my adult stuff. I adapted the model twice in last 10 years and that was it. Other than that it's hands-off. While such a site would easily go for 2+ annual in mainstream, here it's only worth 1 year multiple.

So, why are things that different in adult?

I'd say it has nothing to do with what everyone posted above. It has everything to do with a closed industry. A small market. If the whole net was buying adult sites, multiple would be much more mainstream like.

[arock10]

Originally Posted by McSpike

You all posted valid points.

Yet... they all apply to mainstream just as well. Buying sites in mainstream is just as tricky as here with the exception that sites (publicly posted) are under much bigger scrutiny because the market is that much bigger. Thus 95% (probably more) of sites for sale fall off the lists because they are junk. So, junk is very much present in mainstream as well and only fools buy it, yet the good sites go for 2+ annual net.

I believe the same junk ratios apply to adult. Majority may be junk. Sure. Then why only 1 year multiple max for the good ones?

Someone said whatever site is making money is doing it because someone is pushing it. The same is true in mainstream. You have sites that are a full-time operation and ones that are hands off. Different multiple is applied to them, yes, but still this multiple is twice as high as in adult industry.

I've been making money without actually pushing my adult stuff. I adapted the model twice in last 10 years and that was it. Other than that it's hands-off. While such a site would easily go for 2+ annual in mainstream, here it's only worth 1 year multiple.

So, why are things that different in adult?

I'd say it has nothing to do with what everyone posted above. It has everything to do with a closed industry. A small market. If the whole net was buying adult sites, multiple would be much more mainstream like.

Because adult is a declining trainwreck

[stoka]

Originally Posted by jerkules

It depends on many factories... unless I see the link I can tell much.

[247mg]

6 month would be a good multiple... more than that than need to see last 1 whole year revenue and traffic

[McSpike]

Originally Posted by arock10

Because adult is a declining trainwreck

Actually I would disagree. Adult is just fine. It's people who can't adapt.

It's been like that 10 years ago just as well. Today we have tubes, back then we had MGPs. It doesn't matter. Sales are made using the same principles. You create a market. No one needed refrigerators because we had ice factories, yet there are no ice factories existing today. If you believe tubes are killing the industry then I can tell you MGP were no different. Actually they were fucking awkward and to top it off you couldn't put a clickable ad inside the video. Tubes are great. Those who know how to make money off of that have no problems.

On ccbill for example I have ratios of 1:500. On paysites. Today. It depends what you push, what traffic you have.

To me revenue never was a problem. It was the traffic sustainability. If I had the traffic I had the sales. The only thing I did in the last 10 years was to adapt for traffic. All the rest is still old school.

What's funny is that the good stuff isn't for sale because buyers believe a multiple of 1 is what is justified while they cannot point out the reasons that go beyond those in mainstream yet multiples are 100% higher there. The good stuff still makes money year after year and therefore isn't for sale at 1 year multiple unless sellers need to liquidate badly. The industry also doesn't have any centralized well organized vetted marketplace for this. The same wild west was in existence in mainstream years ago.

[rabbit]

lets just say that there are very few sites in adult which can count on selling as an exit strategy. most do it cause they have problems, want to move on, fed up of the industry, need to finance other projects, etc. let's face it with a 1 year multiple, most people would just continue operating and collect. why sell?
get someone to operate your site, give him a % of profits, so they have a stake in it and you can free your time for whatever else you want to do.

[Denny]

6-8 months profit is the standard in adult.

[DigitalPimpNetwork]

10 months revenue for adult and it has to be fairly consistent

[woj]

Originally Posted by McSpike

I'd say it has nothing to do with what everyone posted above. It has everything to do with a closed industry. A small market. If the whole net was buying adult sites, multiple would be much more mainstream like.

that's one of the reasons, obviously there are more buyers and more $$ in mainstream... but I think there are a lot more suckers too, I think buyers in mainstream might be less sophisticated... most haven't been around the block long enough, so they don't truly understand the risks involved...

cause come on, 2.5 multiple is ridiculous unless the business is pretty spectacular with a long earning history... at 2.5 you can buy a pretty decent brick and mortar business, with real assets, and far less risk...

[McSpike]

Originally Posted by woj

that's one of the reasons, obviously there are more buyers and more $$ in mainstream... but I think there are a lot more suckers too, I think buyers in mainstream might be less sophisticated... most haven't been around the block long enough, so they don't truly understand the risks involved...

cause come on, 2.5 multiple is ridiculous unless the business is pretty spectacular with a long earning history... at 2.5 you can buy a pretty decent brick and mortar business, with real assets, and far less risk...

actually the prices in mainstream are increasing. at least at under 100k level. I recently saw a content site that depends heavily on Google and content produced by the previous owner and 10 h/week workload going for 2.92 multiple and it went in a couple days. at 70k

It is getting silly.

And as far as brick & mortar I bet at 2.5 you'd be buying a full time job not a business. Real brick & mortar *business* has a bit bigger multiple.

[Barry-xlovecam]

Most affiliate accounts are not transferable without prior consent of the sponsor to the new ownership. Get your ducks lined up in a row before you close the deal.

Know what you are buying

[McSpike]

Originally Posted by rabbit

lets just say that there are very few sites in adult which can count on selling as an exit strategy. most do it cause they have problems, want to move on, fed up of the industry, need to finance other projects, etc. let's face it with a 1 year multiple, most people would just continue operating and collect. why sell?
get someone to operate your site, give him a % of profits, so they have a stake in it and you can free your time for whatever else you want to do.

exactly.

the whole industry is basing 1 year multiple (or less) on the fact that if you are to sell you are probably hard pressed to do so and because you can't turn to mainstream you have a small market to turn to, you have to submit to low offers. and with such approach good offers never reach the market because as you said: with a 1 year multiple, most people would just continue operating and collect. why sell?

It appears like the market is still convinced that there is a certain multiple that applies to any website. It ain't so in mainstream and sellers (unless hard pressed to sell) are no different in adult. they just won't sell. and that creates a lack of good offers and the whole industry feels like only BS is on the table and it keeps running in circles with that 1 year multiple (or less) in mind.

[McSpike]

Originally Posted by Barry-xlovecam

Most affiliate accounts are not transferable without prior consent of the sponsor to the new ownership. Get your ducks lined up in a row before you close the deal.

Know what you are buying

That's a good idea.

Although I haven't had a problem changing payout info on all of them and I use MANY sponsors. almost all that matter in this industry. I don't think anyone ever asked me "why". I just changed the info and started getting payments elsewhere.

Actually... wait. CCbill wanted me to sign a paper. You sign, it's done.

[JA$ON]

history is all that matters to me (once all the obvious factors have been taken into account).......

Paying 6mo profit for a site that has been stable or growing consistently for years. With traffic sources that will continue once you take over.....probably a good deal

Paying 6mo for a site that has only been around a couple years, with big ups and downs, probably not a great deal

[flashfire]

its 6-10 months...I have bought tons of sites in recent years trust me

what do you have for sale?

[BigFurry]

Originally Posted by Barry-xlovecam

Most affiliate accounts are not transferable without prior consent of the sponsor to the new ownership. Get your ducks lined up in a row before you close the deal.

Know what you are buying

I read that as get your dicks lined up first. :O

[pgmorin]

So the cms , design and all the exclusive content worth nothing?

[Barry-xlovecam]

Originally Posted by BigFurry

I read that as get your dicks lined up first. :O

Affiliate contracts generally have a non assignable clause.

'Dicks' don't read the contracts they sign

Under most circumstances: we will transfer the account to the new buyers -- but that is at our option.

[NickBaer]

I was at an adult trade show, and overheard a rep of a big group laugh and say "25 percent of 12-months".

[AdultB2B]

When doing valuations on sites our company looks at a variety of factors. Is income trending up or down? The type of site. Depending on the type of site (such as a tube) traffic certainly comes into play. Niche is also important.

In the end the multiples can be as low as 1.5 x annual profit and as high as 3, or even higher in a very unusual situation.

If anyone has a site they're interested in possibly selling, please get in touch and we can evaluate it for you for free.

[Goethe]

Originally Posted by NickBaer

I was at an adult trade show, and overheard a rep of a big group laugh and say "25 percent of 12-months".

Which is 3 months income