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Old 16-03-2010, 01:53:16 AM     #5 (permalink)
Edwin

 
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In this case, I'd break the value into two components:-

A) The value of the "naked" domain name. In other words, if there was nothing on it at all, what's it worth to an end-user?

B) The value of the leads being generated. In this case, the figure of 3x to 4x revenue might be accurate, or it might be need adjusting upwards or downwards

Add A) to B) and you've got the value of the domain/site as it stands.

I would also add a third value, depending on the exact situation:-

C) Replication cost: if the site's old, well-established, and has a ton of backlinks, then how much would it cost you (or your competitor) to bring a brand new 2010 vintage site up to the same level of success? This figure might even be higher than A) + B) if for example the site's been around for many years and has attracted a lot of attention (in the form of incoming links) during that timeframe.

So add A) + B) plus C) and then knock off a bit for the fact that B) is a result that stems in large part from A) + C) i.e. don't double-count, and you have a good idea of what it's all worth.
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