As many of you know, I recently sold off two of my larger forums, Zelda Universe and Guitars101. Both of these forums sold at my Buy It Now price within 2 hours of listing them for sale on SitePoint. One of them sold for about 2 years revenue and the other sold for more than 3 years of the current revenue. I also recently saw a Sonic forum sell for 3-4 years revenue through SitePoint. This is very interesting to me and it should be to you as well.
A couple of Saturdays ago, I was visiting with my good friend who owns Religious Forums and we were discussing this very topic. I told him that I saw the trend clearly and that I felt other forum owners may soon begin capitalizing on this. I think people see something unique in a forum, which is a completely different animal. I think the fact there is a membership, recurring traffic, and user-generated content gives them extra value in the marketplace. To those forum admin that are considering selling their forum, don’t consider offers less than 18 months revenue if your forum is truly unique and strong.
Very nice. Good job.
I wonder though, when do you decide when its time to sell your forum? Just when you don’t think you feel like running it? Not interested? Or is there a different reason to consider?
2-3 times gross reveune or 2-3 times net revenue? If the latter, what is net?
Wow 18 months is awesome! This is really great news for everyone that owns a forum.
Keep us up-to-date on other forums you see going for sale.
I just posted about this very topic on my blog.
http://www.petertdavis.net/205-how-much-is-my-forum-worth/
Although I’m encouraged to hear you mentioning an upward trend in forum pricing, I’m still resistant to adopting a formula for forum valuation based on a multiple of earnings.
I’m a little hesitant that Lee’s experience could carry over to all forum owners. Lee’s “big 3″ are/were very well-known in the development community. Although that may not physically effect their value, just the fact that visitors of Sitepoint probably knew about these forums in advance could have effected their willingness to buy them.
A lot is earned on reputation alone.
[…] Lee clarify that the earnings are for 3 months, not for a whole year. While Lee did not specify which forums generated that income, according to his profile, he’s operating the largest Sprint PCS forum, the largest Zelda forum, and the largest SmashWorld forum on the web. […]
Amir,
I think it has to do with your available time and your desire to grow the forum.
[…] In addition to traffic the loyal visitors will generate you free content that will result in bringing you more visitors through search engines. The value of good communities is great […]
Great advice, thank you. Also, congrats on your sales. I was unaware that Sitepoint facilitated such things. I just knew they had pretty decent books.
[…] In case you are unwilling to build your community website from zero (short of time, no experience, cash available to invest, etc) – the basics of the process and general guidelines how to start your forum I discussed in forum launch post - you have one more viable option: buy an established forum. Yes, a simple, efficient, but expensive way to become an owner of a web community. […]
Interesting thoughts, Lee!
I think forums are definitely becoming more desirable as income-generating web properties versus just hobby sites. It’s very, very difficult to create a lasting community (I said community, not forum - there is a big difference here), and this is even harder today than it was even a year ago due to market saturation in many niches. As time goes by, I think that this will become even more difficult - thus giving established forums that much more value.
Laura
Amazing how this has changed over the years. Less than 5 years ago, I can remember advertisers paying less for page views if the campaign was on a forum vs a static website. It seems this viewpoint is changing so that the forum is not the lowly site on the totem pole of value. Good news!
[…] Established forums are becoming very desirable properties. Just ask Lee – he’s recently sold several larger sites very quickly for very good prices. Across the Internet landscape, large and small companies are being snatched up left and right. For example, did you read about Sony’s acquisition of Grouper? Grouper holds less than 1% of the online video market (where YouTube is king at 43%), and doesn’t have a dime of revenue. But that’s okay with Sony – they just paid $65,000,000 in cash for them. (Go ahead, count the zeros.) It’s funny, because they get as much traffic as we do every month… […]