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If you had a steady investment opportunity with 10% return (about in line with long-terms stock market returns), $9000 per year indefinitely is worth the same a

If you had a steady investment opportunity with 10% return (about in line with long-terms stock market returns), $9000 per year indefinitely is worth the same as $99000 now (in an idealized finance world. In the real world you can't invest $99000 and withdraw $9000 per year because withdrawals during downturns will take out too much. But it's a quick way to calculate equivalent values). That's obviously an upper bound, because those domains won't make $9000/year forever. But valuing them at $10k if they make $9k/year is equally unsound. Not to mention the domain is worth more than its ad revenue. You could also end up selling it to a company that came up with the name and saw that the domain is available for purchase for some reasonable 4-5 figure amount (like in the example of this very article, where someone buys a domain for a five-figure amount) Obviously there is a lot we don't know (is the $9k pure profit or are there substantial costs? How likely is the domain to sell?), but it sounds like the seller got the better end of the deal. He got more than $40k in value, in return the author got a deal he could afford

QuantumNomad_ 6mo ago
I imagine that $9k ad revenue is a site that had an actual user base. And that the guy taking over the domain is going to just put all ads and no content, like he had on Friendster.com. And if so, the expected ad income is probably much lower.
- prettyblocks 6mo ago
  I believe it's 9k/year in parking revenue.
- jospeh554 6mo ago
  Exactly, and the fact that friendster failed was because nobody was going onto it anymore, so there's nobody going to be hitting ads, other than bots. The WayBack machine shows the redirect to the ad page offering the domain for sale. https://web.archive.org/web/20231018214628/https://friendster.com/ https://web.archive.org/web/20231018214628/https://friendste... So doesn't seem like it was serving ads anyway
killingtime74 6mo ago
Good analysis. if I was the author I would have just borrowed 20k in a personal loan and paid it off in three years. Of course he may be exaggerating that he gets 9K in Ad revenue per year or he knows that it's going to decline
plumeria 6mo ago
What's the best network currently to put a domain to generate ad revenue?
- aarreedd 6mo ago
  Adsense
  - someonenice 6mo ago
    Doesn't Adsense require website with proper Content ?
    - pknerd 6mo ago
      Yes
    - technion 6mo ago
      Yes this is what im confused about. They described it as a parking domain, but the old strategy of "buy a popular domain and put ads on a one pager" hasn't been something that pays substantively for a long time. Ads sales have plummeted in general but not being able to use adsense would make it worse.
wileydragonfly 6mo ago
Nobody gets 10% a year
- bell-cot 6mo ago
  ...unless there's considerable uncertainty about future payments. Happily for the sellers of dubious assets, the world never seems to run out of people who can't resist a deal that's too good to be true.
- sarchertech 6mo ago
  S&P 500 average return over the last 5, 10, 50, and 100 years was higher than that.
  - jospeh554 6mo ago
    Last 5 Years: ~12.5% Last 10 Years: ~14.0% Last 50 Years: ~11-12% (reflects performance since the mid-1970s) Last 100 Years: ~10.4%
mogrinz 6mo ago
I have a calendaring site (won't mention it here b/c I don't want to be seen as plugging it) that has been generating revenue from ads and subscriptions for 26 years now. At its peak, well over 100k/yr but now more like 15k/yr for the past 5 years. Still a very steady income b/c the site is sticky. The only expense I have is about $3k every 36/mo for VPS hosting. At this point the code base is so mature that I only do minimal user support. I've looked into selling but people only want to offer 2x annual revenue. Why would I do that when I can just hold onto it for another year? I wish more people saw the math your way.
- 55555 6mo ago
  The main reason this is an issue is that it's a lemon market. Many sellers claim their sites will require "no time to maintain" and that future returns will likely continue, but it's often a lie and thus you don't get the multiple that is truly justified. Even without lies, no one knows the truth of your business like you do. The unfortunate result of this -- and I've been in a similar position in the past -- is that you are incentivized to lazily run things into the ground slowly rather than find a new owner who may bring new passion.
  - Suppafly 6mo ago
    >Many sellers claim their sites will require "no time to maintain" and that future returns will likely continue, but it's often a lie and thus you don't get the multiple that is truly justified. This, the numbers they show are often a result of a pump that isn't sustainable. I've watched a bunch of youtube videos from people on the buying and selling side of things, and it's readily apparent that the values are temporary for most of the sites. The scam sites outnumber the legitimate long term ones and both are sold on the same platforms.
- cestith 6mo ago
  I would have several questions before negotiating seriously, and I could actually be in the market for such a beast. At what multiple would you be comfortable considering selling? If revenue has dropped 85% from its peak, have you identified the cause of the drop? Has it been steady that past five years? Do you have a record of the time spent on it, or does it just feel minimal? How much of revenue is from ads vs subscriptions? Is it sticky mainly because a user can’t export things and import them to Google Calendar or something? Is it custom software, heavily customized software, or are you basically selling the calendaring component of something like Citadel or Horde? What languages are in use? Does the buyer get just the site or full ownership of the codebase and the rights to derive new products and services from it? Does it come with the domain and trademarks? Are you selling outright, or are you reserving some royalty for yourself? What does the handover look like? Does the buyer just get an email with URLs and login credentials, or do you plan on familiarizing a buyer with the whole thing?

QuantumNomad_ 6mo ago

I imagine that $9k ad revenue is a site that had an actual user base. And that the guy taking over the domain is going to just put all ads and no content, like he had on Friendster.com. And if so, the expected ad income is probably much lower.

prettyblocks 6mo ago
I believe it's 9k/year in parking revenue.
jospeh554 6mo ago
Exactly, and the fact that friendster failed was because nobody was going onto it anymore, so there's nobody going to be hitting ads, other than bots. The WayBack machine shows the redirect to the ad page offering the domain for sale. https://web.archive.org/web/20231018214628/https://friendster.com/ https://web.archive.org/web/20231018214628/https://friendste... So doesn't seem like it was serving ads anyway

killingtime74 6mo ago

Good analysis. if I was the author I would have just borrowed 20k in a personal loan and paid it off in three years. Of course he may be exaggerating that he gets 9K in Ad revenue per year or he knows that it's going to decline

plumeria 6mo ago

What's the best network currently to put a domain to generate ad revenue?

aarreedd 6mo ago
Adsense
- someonenice 6mo ago
  Doesn't Adsense require website with proper Content ?
  - pknerd 6mo ago
    Yes
  - technion 6mo ago
    Yes this is what im confused about. They described it as a parking domain, but the old strategy of "buy a popular domain and put ads on a one pager" hasn't been something that pays substantively for a long time. Ads sales have plummeted in general but not being able to use adsense would make it worse.

wileydragonfly 6mo ago

Nobody gets 10% a year

bell-cot 6mo ago
...unless there's considerable uncertainty about future payments. Happily for the sellers of dubious assets, the world never seems to run out of people who can't resist a deal that's too good to be true.
sarchertech 6mo ago
S&P 500 average return over the last 5, 10, 50, and 100 years was higher than that.
- jospeh554 6mo ago
  Last 5 Years: ~12.5% Last 10 Years: ~14.0% Last 50 Years: ~11-12% (reflects performance since the mid-1970s) Last 100 Years: ~10.4%

mogrinz 6mo ago

I have a calendaring site (won't mention it here b/c I don't want to be seen as plugging it) that has been generating revenue from ads and subscriptions for 26 years now. At its peak, well over 100k/yr but now more like 15k/yr for the past 5 years. Still a very steady income b/c the site is sticky. The only expense I have is about $3k every 36/mo for VPS hosting. At this point the code base is so mature that I only do minimal user support. I've looked into selling but people only want to offer 2x annual revenue. Why would I do that when I can just hold onto it for another year? I wish more people saw the math your way.

55555 6mo ago
The main reason this is an issue is that it's a lemon market. Many sellers claim their sites will require "no time to maintain" and that future returns will likely continue, but it's often a lie and thus you don't get the multiple that is truly justified. Even without lies, no one knows the truth of your business like you do. The unfortunate result of this -- and I've been in a similar position in the past -- is that you are incentivized to lazily run things into the ground slowly rather than find a new owner who may bring new passion.
- Suppafly 6mo ago
  >Many sellers claim their sites will require "no time to maintain" and that future returns will likely continue, but it's often a lie and thus you don't get the multiple that is truly justified. This, the numbers they show are often a result of a pump that isn't sustainable. I've watched a bunch of youtube videos from people on the buying and selling side of things, and it's readily apparent that the values are temporary for most of the sites. The scam sites outnumber the legitimate long term ones and both are sold on the same platforms.
cestith 6mo ago
I would have several questions before negotiating seriously, and I could actually be in the market for such a beast. At what multiple would you be comfortable considering selling? If revenue has dropped 85% from its peak, have you identified the cause of the drop? Has it been steady that past five years? Do you have a record of the time spent on it, or does it just feel minimal? How much of revenue is from ads vs subscriptions? Is it sticky mainly because a user can’t export things and import them to Google Calendar or something? Is it custom software, heavily customized software, or are you basically selling the calendaring component of something like Citadel or Horde? What languages are in use? Does the buyer get just the site or full ownership of the codebase and the rights to derive new products and services from it? Does it come with the domain and trademarks? Are you selling outright, or are you reserving some royalty for yourself? What does the handover look like? Does the buyer just get an email with URLs and login credentials, or do you plan on familiarizing a buyer with the whole thing?