Welcome to part six of our buying websites guide.

Today we are going to discuss the importance of knowing whether a site is established or not. Before we continue I should remind you that there are five previous chapters:

* Everything changes
* Site buying multiples
* Industry importance
* Traffic relevance
* Traffic quantity

Is the site established?

Knowing whether a site is established or not is vital in knowing its value.

So what is an established site and how do we know if a site is established?

Authority websites have generally been online for a long time, they are also near the top of their industry. They will normally have things like advertisers, return traffic, and a good brand image within the industry.

Established vs Authority

It is important not to confuse established sites with authority sites. An established site will have all of the above features, but an authority site is truly at the top of its industry. It is the sort of site that people will think of when you tell them the industry:

Search engine = Google
Online Encyclopedia = Wikipedia
Site Buying Experts = Midascode.co.uk 😉

If a site is an authority site then expect to look at yearly multiples instead of monthly ones. It is not un-common to pay more than 3 years revenue for an authority site, but rarely would an established site go for more than 18 months.

So when you are looking at a site, make sure you try and see if the site is established, and be prepared to pay a little extra.

The other side of the coin is authority sites. Authority sites have usually been around for a long time and are the top site in their industry. They usually have a list of current advertisers, returning traffic, good public relations, etc.. If a site is an authority, then the multiple goes way up. While widgets.com has been around for 2 years and has a steady base of return traffic, it’s not what I would call an authority site. Because widgets.com is “established” but not an “authority”, the multiple remains at 8.