Generalist Websites versus Specialist Websites for Sale
A generalist website is a website that does not require any specialized knowledge to operate the website. A specialist website is a website that requires specialized knowledge to operate the website.
For example, a webmaster doesn’t need any specialized knowledge to run a simple AdSense content website. Generally, the webmaster simply has to write and publish new articles on the site and income is generated through AdSense automated ads.
On the other other hand, operating a game portal would usually require specialized knowledge about how games are created and distributed. The webmaster, a member of his staff, or a hired contractor must have this knowledge in order to run the website.
For these reasons, generalist websites for sale will generally have a larger pool of buyers because more people can buy and operate the website. Specialist websites have a smaller target audience as fewer buyers may have the specialized knowledge needed to run this website.
The law of supply and demand also comes into play here. Generalist websites with a larger pool of buyers tend to sell for higher multiples than specialist websites as more buyers compete for generalist websites. Specialist websites with fewer buyers sell for lower multiples as there are fewer competing offers for these websites.
There are a lot of generalist websites for sale but the vast majority are low cash-flow, low-quality websites. The disadvantage of over-supply is that it pushes down the sale price of these generalist websites as there are tons of them available for sale. And the lower the quality, the lower the sale price.
Low-quality specialist websites sell for even less than low-quality generalist websites. There are already few buyers for specialist websites. Thus, a low-quality specialist website will attract even fewer buyers from a small pool of buyers and sell for lower multiples than a low-quality generalist website.
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Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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