How do people manage to sell their sites for millions of dollars?

[whohuh]

I recently read an article about how the guy who developed the site hotornot sold it for like 22 million dollars and that just kinda stuck to me for awhile. I'm not particularly interested in doing the same, but I'm just curious - why can sites like facebook, myspace,etc sell for millions of dollars when they don't actually sell anything and who is actually buying it?

Do they just build up their site until millions of people are using it and then companies just come up to them and ask to buy it? Also what makes a site more expensive than another? Please discuss, I don't want to make another "myspace", but it would be interesting to see if I could sell my own websites if I ever get tired of working on them.

[Iamnotsatisfied]

Most their revenue comes from ads. So the more traffic/ users they get the more ads they show and get paid for. Having 10 million people on your site will surely bring in quite a lot in ads revenue, hence the high value of those sites.

That is definitely not the only business model sites work with. There is also subscriptions which sites like Linkedin get quite a lot from.

Even if they don't have a revenue source.... traffic is always of value... So a company would buy a high traffic site and then commercialize the website somehow ( usually gettting ads on the site).

[whohuh]

I found a very interesting site that estimates how much a website is worth:

lol I can't post Urls yet

www(dot)websiteoutlook.com

I doubt its accurate. Does anyone know of a site where the information is more accurate? I wanted to look up the advertising sales some sites have and their pageviews.

[noob]

There is no such thing as an accurate site evaluator that can tell you the actual net worth of a website. These things are determined by valuation firms that access the business model, users, and a billion other things before coming to term with a fair valuation.

[PsiPro]

Sites like Myspace, Facebook, twitter, etc. are valuable because they have a market share. Take google for example, before Adwords they didn't make money but they owned the web search market. They run a lot of free services that are enterprise grade specifically because they business now is the analysis of information and traffic patterns.

If you control facebook for example you reach 90% of college students (pulled that number out of my ...). That's a valuable market share. And the same is true for any popular site, if you control traffic for a large segment of any nice you will have a relatively valuable site.