Re:Ask YC: What is a website worth?
by ALee on Thursday December 20, 2007 @11:01PM
(#91662)
So, the calculation you want is called a valuation. There are a number of different methods, but all are based on particular assumptions. You can either base it on cash flow or EBITDA. So essentially you have three parts that are factors in the calculation: (a) the sum of current and future earnings divided by the cost of those operations, e.g. over five years, what is the return on this website (b) time period for estimate, e.g. how long will 10minutemail last? (c) discount rate to dampen those estimates, e.g. how likely are these scenarios to occur?
Check out this article and you should easily be able to do it: http://en.wikipedia.org/wiki/Valuation_using_discounted_cash...