Growth Sector Online Advertising

Websites owned by newspapers are typically more developed than radio and television web sites. They also have a greater value than current local radio and television stations though, are positioned for rapid growth over the next few years, resulting in strong multiples for their website values, according to a new report, “What’s a Website Worth? Valuation Metrics for Local Websites.”

Issued today by BIA Financial Network http://www.bia.com, a leading financial and strategic advisory firm serving the media and communications industries, and Borrell Associates http://www.borrellassociates.com, a leading local advertising research firm, the report focuses on the growth of newspapers, television and radio stations, and local “pure-play” and provides a range of metrics that assist in determining values for these websites. The report also discusses the factors unique to web operations that will an impact in the future.

The analysis concludes that local websites hold significant value for their owners, especially if they’ve invested in a way that positions them for growth in high-demand advertising categories such as email, streaming video and paid search. The uppermost value of some of these local newspaper websites was between $300-450 million, and the values for the largest-grossing radio websites were seeing values in the $15-20 million range.

In 2008, the oldest newspaper, radio, TV and “city.com” websites turned 14-years-old, evolving from interesting experiments to financial saviors for their parent organizations. With many sites generating millions in revenue and profits and delivering a strong potential for continued growth, there is speculation and interest in how these sites should be valued and the opportunities they will bring to their parent companies.

“Obviously, there are fundamental changes taking place in the value of media properties, with the value of their websites becoming more meaningful as a percent of total value,” said Mark Fratrik, VP of BIAfn. “Given their growth potential, the value multiples of media websites may be 2 to 4 times that of the core business.”

According to Gordon Borrell, CEO of Borrell Associates, “Websites associated with traditional media companies benefit from promotion and content cost synergies as well as opportunities to up-sell to existing customers. As a result, their cash flow margins are robust – in most cases much higher than their parents’.”

The report also provides value magnifiers for websites, which include market penetration, sales organizations, revenue sources, media leverage, performance benchmarketing, and URL valuation.

“What’s a Website Worth? Valuation Metrics for Local Websites” is available for online purchase at, http://www.borrellassociates.com/reportDetails.aspx?prodID=120. For more information, call 800.331.5086 or email Esta dirección de correo electrónico está protegida contra spambots. Usted necesita tener Javascript activado para poder verla.