Are content sites not selling at the moment?

[bernard]

I spoke with a broker before the weekend discussing some things about how to sell with them and he said that content sites in general were not a good time to sell because of AI and all that.

I think overall he was thinking about ad based content sites, not affiliate review sites, but it was quite a negative assesment anyway.

Is this what you're hearing too?

 

[Smith]

I've heard a few people say that multiples are down right now but I've yet to hear anyone say "not a good time to sell because of AI". Was this an experienced broker with exposure to many content sites?

Sure, I would expect AI sites to not be selling until there's more clarity on their stickiness long term. But an experienced broker has the ability to look at aged content, assess originality, determine quality, and be able to present a site with the right properties to the right buyers, so I don't think a blanket statement of "not a good time to sell" is fair.

Did they give any indication of the multiples that are currently being offered that would suggest it's not a good time to sell? If not, it sounds like a lazy response from the broker.

 

[bernard]

I've heard a few people say that multiples are down right now but I've yet to hear anyone say "not a good time to sell because of AI". Was this an experienced broker with exposure to many content sites?

Sure, I would expect AI sites to not be selling until there's more clarity on their stickiness long term. But an experienced broker has the ability to look at aged content, assess originality, determine quality, and be able to present a site with the right properties to the right buyers, so I don't think a blanket statement of "not a good time to sell" is fair.

Did they give any indication of the multiples that are currently being offered that would suggest it's not a good time to sell? If not, it sounds like a lazy response from the broker.

I think they didn't want to deal with a non-us site.

 

[Steve Brownlie]

Just from a logical point of view if one believed AI was going to continue to damage content sites then right now would be the perfect time to sell even if multiples are going down - may as well offload it while you can etc. I'm not saying that's my prediction for what's actually going to happen but their logic seems flawed/nonsense if it is what they believe.

 

[AhFreshMeat]

The following is influenced by a bullish outlook for the post SGE world – The fear I hear often is: “SGE is going to kill seo”, and this brings forth a lot of uncertainty for everyone involved.

The uncertainty brings forth the appearance of risk for those who are buying sites. Simultaneously, its also possible more sites are being listed due to these fears and multiples are being brought down a bit for now.

For argument sake, lets say you agree with the above & find it to be mostly true. In this case I’d say it will fluctuate back to the previous multiples once SGE fears are no longer lingering. I think SGE needs to be released and when everybody sees “seo isn’t dead” those who bought up those sites at lower multiples will profit.

Same with siri and voice search, which was supposed to kill seo. I dont think google wants to kill off publishers because it gives them a lot of control in a what that many don’t even know exists or even think about, but I won’t deep dive into that area of thought as its not relevant.

TL;DR: Many fear that SGE will harm SEO, causing uncertainty and impacting site valuations. However, like past concerns with Siri and voice search, SEO will likely survive. Those who invest in sites during this fearful period could profit when concerns about SGE subside. Google likely isn’t ready to undermine publishers just yet due to the control it provides them.

 

[CCarter]

The following is influenced by a bullish outlook for the post SGE world – The fear I hear often is: “SGE is going to kill seo”, and this brings forth a lot of uncertainty for everyone involved.

The uncertainty brings forth the appearance of risk for those who are buying sites. Simultaneously, its also possible more sites are being listed due to these fears and multiples are being brought down a bit for now.

For argument sake, lets say you agree with the above & find it to be mostly true. In this case I’d say it will fluctuate back to the previous multiples once SGE fears are no longer lingering. I think SGE needs to be released and when everybody sees “seo isn’t dead” those who bought up those sites at lower multiples will profit.

Same with siri and voice search, which was supposed to kill seo. I dont think google wants to kill off publishers because it gives them a lot of control in a what that many don’t even know exists or even think about, but I won’t deep dive into that area of thought as its not relevant.

TL;DR: Many fear that SGE will harm SEO, causing uncertainty and impacting site valuations. However, like past concerns with Siri and voice search, SEO will likely survive. Those who invest in sites during this fearful period could profit when concerns about SGE subside. Google likely isn’t ready to undermine publishers just yet due to the control it provides them.

You okay mate? Did you get hacked by a ChatGPT bot?

 

[AhFreshMeat]

Late night ramblings, there’s no gpt in there though thats how I write.

 

[secretagentdad]

Its all markets. Things are locked up, volume is down.
Prices are just a bit laggy.
Not a good time to be selling big ticket stuff.

 

[tziahs]

This question pops up on reddit (r/juststart, r/entrepreneur, and on r/blogging) as well, so there's definitely a slowdown.

Let's hope it picks up in Q3 and Q4.

 

[MrMedia]

I'm holding until late 2024 fwiw.

Nothing to do with AI just seems like the market is soft for sellers right now and I expect it will be for a year or so. If / when interest rates come down again I expect multiples will increase as debt becomes cheaper, especially at the high 6 - 7 figure end.

Just my opinion no stats to back this up other than being in the market and speaking with some rather big content guys.

 

[Potatoe]

@MrMedia Are you taking this as a buying opportunity to acquire new sites? If sites are selling for lower multiples, buying something now and holding until late 2024 would take care of a good chunk of the cost of the site, assuming there's stuff to be had under 30x at the moment (Not sure how much cheaper sites are selling for).

 

[Sutra]

I'm holding until late 2024 fwiw.

Nothing to do with AI just seems like the market is soft for sellers right now and I expect it will be for a year or so. If / when interest rates come down again I expect multiples will increase as debt becomes cheaper, especially at the high 6 - 7 figure end.

Just my opinion no stats to back this up other than being in the market and speaking with some rather big content guys.

You may already be aware, and may already do this, and if so, pay me no nevermind, hah. But if you have your site professionally managed before you sell it - meaning you aren't needed to run your site at all, your team runs everything and the team will come with the sale - you can get much higher multiples. Can start getting those 60x+ multiples. At that point it would be going by EBITDA, not SDE, and the multiple would be based on yearly profit not monthly but multiple wise it would come out to around monthly multiple being 60x+.

If you hold it even longer, build it up further (or build a portfolio of sites, structuring it so the portfolio is within the holding company) to get it the site/holding company to a yearly profit of $2 million+, then your multiple will skyrocket and that point you'd be selling to Private Equity, etc.

As an example, sites are usually selling around 30 - 35x, which is about 2.5 - 2.7x yearly. As as you get your business professionally managed that multiple immediately jumps to 4.5x. So huge immediate gain. But when you have your site professionally managed and you get to $2million plus in profit, then the multiple jumps to 15x+. So an insane amount of increase.

Again, maybe you already know this. But you're one of the few people on here that are building up much larger sites and thinking longer term so thought it was worth a share.

 

[Ryuzaki]

The theoretical problem with the idea that, even if you want to purge your life of this chaos and sell your projects at a lower multiple, you still need to be matched with a buyer who is bullish on traditional SEO as it stands who's even willing to pay a low multiple. I'd imagine you can find a buyer but right now they know it's a buyer's market and they're going to take you out to the woodshed and bend you over worse than you're already offering.

Its all markets. Things are locked up, volume is down.
Prices are just a bit laggy.
Not a good time to be selling big ticket stuff.

I've spoken to countless shovel sellers at this point. I've seen big companies switch hands as partners sell their shares, I've seen many that I work or worked with personally completely close down, and I've seen many hanging on for dear life personally emailing clients asking for work.

I've talked to a lot of ancient veterans and the sentiment is the same... "SEO might actually be dead". Of course that's an exaggeration but if that's the feeling of the guys who have been around the block for decades without dropping out, then imagine what the intermediates and newcomers are thinking. I can tell you what the newcomers are thinking: "AI content replaces the need for human content and the need for links and the need for marketing. Just publish 10,000 more pages at pennies per page."

@secretagentdad's quote above is the perfect summary of the state of things right now. Everyone who's not gigantic and overcoming the EEAT YMYL AI onslaught, or has cashflow stemming from areas that don't depend on SEO, have withdrawn into their turtle shells nearly completely. That's both the gold diggers and the shovel-sellers.

These gigantic / alternate-cashflow guys are where the money is at right now, and you have to be positioned in a certain way or have an offering the little guys don't need to tap into it, as a shovel seller. HARO, Digital PR, especially nice or exclusive link campaigns, custom campaigns of all non-SEO types. It's where the money is at and as usual the bottom 90% of the ladder is getting squeezed again.

Whatever the next core update holds for us (and it's been a long time so Google knows how precarious this is) will either open the game back up or be a giant nail (maybe not the final) in the coffin.

If you haven't read the tiny short business book "Who Moved My Cheese?", now is a good time to learn that lesson. Many of us maze-rats are looking for the cheese in the same place it's always been, but it's obviously not there. Many of us are hoping the cheese has moved to a different part of the maze. It could even be the case that the cheese has been lifted out of the maze entirely and dropped into the luxury maze we aren't in.

This is what EEAT and YMYL are for, seemed to anticipate, and are defending against... the unleashing of endless the AI spam. It's the same way that Google always battled spam. Give more weight to brands that are older and bigger, add in more time delays so spam can't pop in the SERPs before it gets whacked by offline filters, etc. So maybe the cheese hasn't moved but the barrier to entry into the maze got astronomically higher. And functionally that's no so different from a barred gate.

Who knows! But SAD has nailed the summary perfectly: "Things are locked up, volume is down." I wouldn't do anything hasty until the next core update drops. It could destroy you or it could resurrect you. I guess it depends on your warchest and need for cashflow whether the upside is tastier than the downside at this point.

 

[CCarter]

"SEO might actually be dead"

Well, let's go down this rabbit hole. Is SEO growing? No. The SEO community is generally not growing at the rate of it's near zenith. So if you are not growing you are.... dying?

Is there a middle ground? I don't think so.

I wish the situation was better, but I think a combination of Google, A.I., brute-force content, and Google's reactions - has left people... looking for better opportunities. I think when TikTok outranked Google in online traffic was D-day. But no one wants to admit it, cause some of us are still on the Titanic.

 

[secretagentdad]

Alright who has got the balls to put their dancing shorts shorts on and wiggle that booty while making us a 30 second emotive TLDR of this thread.

 

[Darth]

Great share @Sutra and at that point we are really talking about a brand with proper (real) staff, EEAT, etc right?

 

[Sutra]

Great share @Sutra and at that point we are really talking about a brand with proper (real) staff, EEAT, etc right?

Having staff that run the site: Yes. Because when it's professionally managed that means you have a team that runs the site completely on their own. You're completely hands off or perhaps just have an advisory roll. If you can step away from the site and let your team run it for a year or longer, and confidently expect that it will have stable profit, or increase in profit, then it is professionally managed.

Having staff as in having real authors instead of personas, real writers instead of using AI, etc, no, not necessarily. It depends on the company structure. I'll give you an example below that is a different path that can be taken without needing all the EEAT, links, etc, however, the amount of work you'll need to put in will be the same, if not more, and require you to learn additional skills - but the payoff is huge.

Example:

One way you could do it is the way we all know; build a huge branded website. Something like TheSpruce. Huge authority site, with top level links, socials, real authoritative writers with web presence, multiple channels, getting traffic from SEO, direct, email, google News, etc.

The other way is to build a portfolio of sites - or rather, a media network. However, you don't just have a portfolio, you structure it so the portfolio is within a holding company, and that holding company is within another holding company.

So like this:

Head Holding Co (you don't sell this)
vvv
Sub Holding Co (you do sell this)
vvv
Site1 (Automotive site) / Site 2 (Gardening) / Site 3 (Tech) / Site 4 (Travel) / Site 5 (Sports) / etc (All of these niches sites will come with the sale of the Sub Holding Co)

By structuring it this way the profit and loss is within the Sub Holding Co (which would be a Media Network), not the individual niche sites. So the valuation will be placed on the Sub Holding co.

What this means is that you can have a ton of smaller sites, that are making ok money, and have just average EEAT, links, and very little social. The total profit will be combined and held in the Sub holding co, which would get the valuation. So you could have 50 sites, each making a profit of $200k per year. The total profit of the Sub Holding Co would be $10million+. Thus, you exit and hit the numbers I mentioned in the previous post. I know someone who did exactly this. So it may sound crazy, but it is possible.

The Sub Holding Co would have all the key employees, and the niche sites would have all VA's and writers from the Philipinnes, or wherever, could use Persona's, etc. Each niche site would usually have a manager to oversee each of the teams within the brands - and that person could also be from the Philipinnes.

Sidenote: By structuring it this way it also gives you the option of selling off the individual niche sites if you want. The structure will also protect you from being personally liable as each of these should be LLC's.

 

[harrytwatter]

I know for a fact that some of these sites were being purchased by sTaRtuPs that had what felt like unlimited access to capital which they don't have now because of interest rate increases. Credit is restricting and this makes speculative "investments" harder to get signed-off on within debt-addled organizations.

 

[Poplanu]

As an example, sites are usually selling around 30 - 35x, which is about 2.5 - 2.7x yearly. As as you get your business professionally managed that multiple immediately jumps to 4.5x. So huge immediate gain. But when you have your site professionally managed and you get to $2million plus in profit, then the multiple jumps to 15x+. So an insane amount of increase.

This is super interesting, and the 15x jump is something that I was not aware of. Dom from Onfolio on Twitter says they only consider acquisitions making $500K+/year in profit for similar reasons. There's enough there to hire a CEO & team to grow the asset. Not so much on an asset making say $200K/year.

But... isn't 15x overshooting it by quite a bit, though, simply based on the size of the holdco? Or you have examples where that worked?

Each site in the portfolio is still vulnerable to Google updates, even if you manage to diversify the traffic and build email lists etc. IMO each asset should have a very strong moat around it to justify the 15x valuation on the whole portfolio, have a long stable earnings history (5+ years), in addition to the $2M+ holdco size.

Right?

 

[JOoa0ky]

This is super interesting, and the 15x jump is something that I was not aware of. Dom from Onfolio on Twitter says they only consider acquisitions making $500K+/year in profit for similar reasons. There's enough there to hire a CEO & team to grow the asset. Not so much on an asset making say $200K/year.

But... isn't 15x overshooting it by quite a bit, though, simply based on the size of the holdco? Or you have examples where that worked?

Each site in the portfolio is still vulnerable to Google updates, even if you manage to diversify the traffic and build email lists etc. IMO each asset should have a very strong moat around it to justify the 15x valuation on the whole portfolio, have a long stable earnings history (5+ years), in addition to the $2M+ holdco size.

Right?

The reason sites sell at 3x multiples (36x monthly-ish) is consistent with small business valuation. If you were to buy a small local accounting firm or medical office etc.

They are all CAPPED at 3x annual valuation.

Why? That is because banks won't give financing greater than that to individual buyers.

---

Now that all changes when you start scaling in SIZE.

The ambitious ones out there do what is called a PE (private equity) ROLL UP.

• You start building multiple locations.
• Or you start acquiring a ton of small businesses.

In the case for site building, you acquire a ton of sites.

When you have a ton of locations or a ton of sites, you roll it all up together and sell it off to large companies or PE firms at a higher multiple.

Why did the valuation increase? To put it simply... because larger buyers have deeper pockets. They're also able to get the financing for the purchase.

PE firms and larger buyers aka Dom from onfolio don't want anything to do with small potatoes. However, if you build it big enough, it will become of interest to those with deep pockets.

---

As a live example, I am in the healthcare space.

If I were to put my clinical practice up for sale right now I would get about 3x of my annual revenue.

However, if I go and acquire another 8-10 offices all at 3x valuation each... and I pack them up together into a 10+ office chain... the valuation will increase to at LEAST 8x.

Of course that won't be getting sold to any of my colleagues... the only buyers at that end will be large corporate chains or private equity firms.

PE roll up.

 

[Sutra]

This is super interesting, and the 15x jump is something that I was not aware of. Dom from Onfolio on Twitter says they only consider acquisitions making $500K+/year in profit for similar reasons. There's enough there to hire a CEO & team to grow the asset. Not so much on an asset making say $200K/year.

Yes, acquisitions at 500k+ have various benefits to the buyer. As you mentioned, one is that it gives you the cashflow to hire a CEO and team. Another is that it allows you to get terms on the deal that favor the buyer. i.e. seller financing, earnouts, etc. That is because selling websites (and even FBA sites) at $500k to $2million is a soft spot. Too small for most PE firms to be interested, and too large for most content/FBA buyers. So sites at the level stay on the market much longer on average.

Sidenote: Having a site professionally managed doesn't necessarily mean having a CEO or C-suite execs. You may already know that, but just clarifying in case others might be wondering

If you're willing to put the team in place on your own you can but you should get training on it. There are a lot of businesses out there that have this type of training. You can expect to pay somewhere around $25k per year or so (of course depends on the company). But when you get to that level, the training and structure it helps you create is well worth it. Not only do you get the bump in multiple when you're done and have everything in place, but you'll have a new set of skills and processes that will be incredibly helpful in any business you grow/acquire going forward.

But... isn't 15x overshooting it by quite a bit, though, simply based on the size of the holdco?

I'm not clear on what is being asked in this part. I want to give you a clear answer though. Would you mind clarifying?

Each site in the portfolio is still vulnerable to Google updates, even if you manage to diversify the traffic and build email lists etc. IMO each asset should have a very strong moat around it to justify the 15x valuation on the whole portfolio, have a long stable earnings history (5+ years), in addition to the $2M+ holdco size.

Right?

Yes, there is risk of getting hit by Google updates. The more sites in the portfolio, and having them in various niches, will help to decrease the risk, but as you mentioned, it is still a risk.

Ideally, you should have multiple sources of traffic, monetization, etc for each site in the portfolio. And in fact, you should also be thinking beyond the sites. You should be integrating vertically acquiring businesses up and down the supply/distribution chain (i.e. acquiring business you outsource to, business that provide you a service/product that is essential to your business), turning costs into profit centers (i.e. if you have a large content team, you already have the skills and processes in place so you could expand it and start offering content as a paid service), acquiring media assets (FB groups, YT channels), etc. My previous post wasn't meant to imply that those things aren't important, it was just a quick example showing what's possible.

PE firms will look at around 5 years of history (for a range it could be 3 - 7 years) So yes, you will need that history. Setting up the structure, employees, processes, etc above will take you several years and then to get ready for a big exit, you'll want to be getting ready about 2 years ahead of time. So naturally, it will be around 5+ years before you'll be ready to exit anyway (assuming it's a large exit like we're talking about).

Regarding the moat, if you start doing the vertical integration, turn cost centers into profit centers, etc that will create a moat. But in addition, you should also be preparing by really understanding the customer for each niche site, have high levels of customer satisfaction, lifetime value, retention, etc. as those will also help to increase the moat size.

If someone doesn't want to go that big, then at the very least, they should consider getting professional management in place. That will get you to a 4.5x. Which opens up an additional opportunity: arbitrage. Most sites are selling for around 2.5 - 2.7 (And as has been said, it's currently a buyers market so good chance you can get them for lower than that). So if you're at a 4.5x and acquire a site for 2.5x, you just collected that difference in value for no additional work, just simply because you have the professional management in place.

 

[tyealia]

This is the most depressing thread i have ever read on this forum . My portfolio is up 2.5x this year but I think like everyone else im waiting to see what happens on sge. In looking to aquire a site to 301 in my vertical but i keep backong off saying lets see what happens after sge or maybe multiples will drop after sge so i can get a better deal

 

[wikibum]

This is the most depressing thread i have ever read on this forum . My portfolio is up 2.5x this year but I think like everyone else im waiting to see what happens on sge. In looking to aquire a site to 301 in my vertical but i keep backong off saying lets see what happens after sge or maybe multiples will drop after sge so i can get a better deal

Go to Google labs and try it out. I think once you try it you will be able to see what you might be afraid of. Seems like you have anxiety because you don't know what might come and I think testing it out will help you a lot.

Let me know what you think once you do.

I was planning on testing it out more later this month. I only tried it on 2 search queries but I am planning on trying it out on a 20+ different queries in different niches and see what happens!

labs[.]google

 

[Sutra]

In looking to aquire a site to 301 in my vertical but i keep backong off saying lets see what happens after sge or maybe multiples will drop after sge so i can get a better deal

Are you looking to do a 301 just for links, or is it to gain content as well? If it's just for links, then have you considered getting an Odys domain? If you're looking for more authority without content, that would be a quick and much cheaper way to do it. For the price you'd pay to buy a site, you could buy multiple odys domains and 301 them.

 

[bernard]

Let me know what you think once you do.

What I think:

It depends.

I don't use Bard or Bing, because I find it to be low quality, but I use ChatGPT and Claude. I find them to be significantly better in some niches (coding advice, personalized answers on health etc) and very low quality in others, such as local advice or getting an opinion.

I don't think SGE will destroy niche sites at all. It will destroy some areas, personally I think mostly EEAT topics anyway. People would rather ask an AI about law, health, etc instead of trying to waddle through sales and ads.

It will have almost zero impact on affiliate reviews imo.