4 replies to this topic

[Erratic_Knight]

So I'm involved with a start up website and we are working on getting investors. My question revolves around the money that websites make.

For example if a site doesn't have ads, how is it making money? If youtube was ad free and it getting 1 million hits a month (just made up a number) they aren't actually bringing in money, but people would say that a site with that kind of success is worth a lot of money.

Do a massive amount of hits just guarantee advertising?

I guess the real problem is the fact that if a site (that doesn't charge/sell anything) then it isn't bringing in any money when it launches, (or for many months) how do you say to investors that your site is worth "x" amount of dollars?

Sorry if this came off as confusing. Thanks for any help.

[GhostCow]

If I were you I would PM Mort with that question. He can probably answer it better than any of the rest of us.

[Erratic_Knight]

If I were you I would PM Mort with that question. He can probably answer it better than any of the rest of us.

it's the oddest thing, i've asked soo many people and no one seems to know...

[GhostCow]

I linked a friend to this thread and here's what he said. Enjoy the copypasta:

[11:26:PM] centimetrocubico: actually, I can answer that. yes, the amount of traffic would be of great consideration to investors, but the quality, source, and type of traffic also matters. I.E. traffic of people who are shopping for something to buy or something to solve a problem is more valuable than traffic that is only at a website for entertainment (although that's not to say that the latter is valueless, only less valuable)

so yes, a massive amount of traffic would guarantee interest from the right investor
[11:26:PM] centimetrocubico: and therefore be worth money
[11:27:PM] centimetrocubico: examples: if you have a website where people come to look up lets say the best computer parts
[11:27:PM] centimetrocubico: that traffic is very valuable
[11:27:PM] centimetrocubico: because those people are looking to spend money, ultimately
[11:28:PM] centimetrocubico: so theyre worth money to advertisers
[11:28:PM] centimetrocubico: a lot of money, if yo have a lot of that type of traffic
[11:28:PM] centimetrocubico: but lets say you have some joke blog where you tell jokes
[11:28:PM] centimetrocubico: you can have the same amount of traffic, but a saavy investor is not going to value it as much as the first example
[11:28:PM] centimetrocubico: but if you had a seriously crazy amount of people coming to your joke blog....
[11:29:PM] centimetrocubico: then thatd be interseting to just about any advertiser, because even though the quality of traffic is low, itd be compensated for with quantity

[Erratic_Knight]

I linked a friend to this thread and here's what he said. Enjoy the copypasta:

[11:26:PM] centimetrocubico: actually, I can answer that. yes, the amount of traffic would be of great consideration to investors, but the quality, source, and type of traffic also matters. I.E. traffic of people who are shopping for something to buy or something to solve a problem is more valuable than traffic that is only at a website for entertainment (although that's not to say that the latter is valueless, only less valuable)

so yes, a massive amount of traffic would guarantee interest from the right investor
[11:26:PM] centimetrocubico: and therefore be worth money
[11:27:PM] centimetrocubico: examples: if you have a website where people come to look up lets say the best computer parts
[11:27:PM] centimetrocubico: that traffic is very valuable
[11:27:PM] centimetrocubico: because those people are looking to spend money, ultimately
[11:28:PM] centimetrocubico: so theyre worth money to advertisers
[11:28:PM] centimetrocubico: a lot of money, if yo have a lot of that type of traffic
[11:28:PM] centimetrocubico: but lets say you have some joke blog where you tell jokes
[11:28:PM] centimetrocubico: you can have the same amount of traffic, but a saavy investor is not going to value it as much as the first example
[11:28:PM] centimetrocubico: but if you had a seriously crazy amount of people coming to your joke blog....
[11:29:PM] centimetrocubico: then thatd be interseting to just about any advertiser, because even though the quality of traffic is low, itd be compensated for with quantity

thanks for the help GC, I appreciate it. Clears things up a bit.