The Financial Worth of the Forums (and related sites) - Page 2

Is this really worth discussing? It doesn't take a rocket science to figure out that this is meant as a novelty, rather than any legitimate valuation of a site. It takes a combination of crosslinks, unique visitors, and other variables and puts a dollar value. It's no surprise that sites like CNN and YouTube are ranked really high. I can't believe you guys are all coming out of the woodwork to debunk this.

It doesn't take a "rocket science" to realize we're just having some fun either. Chill out man.

I love bacon.

+1


+1000000000

J,

I will take the style forum off your hands for 5 dollar.

Jon.

While that site horribly misplaces its valuations, if you put SF up for sale, 50k wouldn't be that unreasonable a guess, there's enough people with big wallets here to make advertisers, potential owners wet their pants

Why so much anger? We are just having fun.

The financial worth of this forum and AAAC presents an unusual situation. Advertisers ordinarily would be willing to pay extreme premiums to reach such avid consumers of high-end merchandise, so going simply by the number of visitors to the site underestimates its value. On the other hand, the site's best members have such strong convictions about clothing and shoes to begin with that they are apt to be unimpressed and unswayed by advertising on the site. In some ways an advertiser's best bet is to do as they seem to do at AAAC, put up an ad and hope that the inexperienced visitors drawn to the site will be influenced by the ads. This would explan why stores such as Pink and Paul Frederick advertise on AAAC despite routinely being savaged in AAAC forums threads.

Another factor that complicates any valuation is that any overly crass attempt to capitalize on the commercial potential of the forum would likely turn members off and end up reducing the forum's value. For instance, I find myself a bit turned off by all the ads on AAAC. It is sort of a catch-22 dilemma, the forum's value is its goodwill, but the goodwill is there in part because the forum is not overly commercial. If you try to exploit it, you lose the goodwill.

That said, my guess is that the forum is probably worth around $250,000. Maybe more.

The reason Pink and Paul Fredrick advertise on AAAC is because they are affiliate type advertisers and didn't ask to be there. They're probably not getting a ton of business through Andy's links, but as you said, random visitors may show up for some advice and click on the ads, you never know. I think I still have a Pink banner and maybe a Paul Fredrick banner here, but I don't think anyone's ever clicked on them.

We/you guys do constitute a very valuable and hard-to-reach demographic for potential advertisers, but as you said, it's hard to keep a balance where we try to maintain the impartiality in opinions that is the soul of the site. If we started adjusting our opinions or steering discussions to reflect advertisers' wishes, it would (and should) turn off the core members who make this place so helpful.

I have been approached a few times about selling the forum, but I've never seriously considered it except as a thought exercise. I enjoy it too much and would worry that it would become like some other forums where you can't read it for the amount of advertising all over the place and it kills the atmosphere I've tried to create and maintain.

Also, a more general question: when people talk about the "worth" of a site, over what time period are they thinking? With the proper direction, lots of pretty basic sites could be worth a ton of money if they were grown correctly over 5 years. Is it just like buying a restaurant or something, where you pay for the infrastructure and hopefully some client base - is the value reflective of the potential profit over a year, five years, ten years?

Really. Without revealing any real details j, how did these "approachments" occur? And were they individuals? Publications? World-wide media conglomerates?

No details required, obviously, but this is an interesting niche of a marketplace I've never really considered "in play". If you don't mind sharing, will you?

I actually would have been surprised if you hadn't been approached. And you are absolutely right about growth potential. That is really the key aspect in terms of estimating the value of a site, but would also be the most difficult to gauge, especially since a new owner could squander the goodwill you've built up. As far as worth goes,mine was really just a guess. I am afraid I don't have any special expertise in valuing web sites. That said, I think my estimation is probably on the low end. Just think, Portnoy's shoe collection alone is probably worth $250,000.

Individuals emailed me. None that I know of represented a media conglomorate per se, although one owns some other internet forums. Beyond that, I'd rather not say.

When I started this project, I was about 99% sure that within maybe a year, a certain magazine would offer to buy my site, or improve their own forum to the point that it would crush mine. That never happened, and I'm still really not sure why. Maybe the wood pulp people just don't "get" the internet.

AFAIK there's no "formula" for it, but for a forum like this one I'd be willing to put an educated guess of the value being a sort of NPV of the potential profits generated from here for 7-10 years. And make it a premium because it is a hard to reach demographic (and some with deep pockets) -- just look at facebook or myspace. They don't really have a lot to offer other than potential marketing information and banner clicks from members, but the demographic is that ultra-exclusive/difficult to market to 18-25 year olds with daddy's credit card.

Should be taking an upper level valuation class in the fall, might be able to work it out a little better then. I'd think it would be worth quite a lot, possibly more than the 250k suggested, especially if it continues to grow.

One of the biggest perks to this forum, imo, is the general personality of its members, be it through moderation or otherwise. The lack of "flame wars" and e-peen comparisons lets a lot of valuable information get through, and the fact that everyone suggests specific brands and styles for both now as well as in the future is just a bonus for prospective buyers.

I'd be interested in hearing more informed opinions on the matter.

I do know that at the height of the dot.com bubble, a major publisher offered me crazy money for my little right-wing web site. I imagine SF is worth more.

Magazines and newspapers have really dragged their feet with entering the internet market. None have done a good job, and they still approach it with hesitation.

That is simply because the internet, which has already made them irrelevant and will eventually make them obsolete, forces them to face their own mortality ... and they don't like it one bit.