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10 months income is a good rule of thumb for internet sites because you often have risks such as inflated traffic or undefensible traffic. But I think this rule is mainly for small and medium sized websites being sold, because there is so much gray area as to whether a site will maintain its success or not.
But for a website that makes $400/day, I'd say the success is already proven. Unless the revenue is coming from a traffic source that is in some way nonpermanent, I would value this website MUCH greater than simply 10 months revenue... I'd say at this point you are approaching the reputability and profitability of a brick and mortar business and it would be closer to 3-5 years revenue.
Just my opinion.
In other words, no, there's no way in hell I'd give up a $400/day site for the paltry sum of $120k. If the website is garnering that kind of cashflow and its reliable, why would you sell such an asset (golden goose really), when you can just wait 10 months and you have $120k worth of golden eggs, PLUS you still have the goose? It just wouldn't make sense. Personally I'd want at least $500k for such a website (assuming of course the revenue was reliable and not dependent on a single traffic source). But even then I'd have to think very very hard about selling... the tendency for me would be to want to keep a website like that no matter what the price offered. But then again, everything has a price. You also have to consider that when you are selling a huge asset like that, many buyers will want you to sign a noncompete agreement saying that for X number of years you will not start a new website that does the same thing. This pushes the price up even farther for me if I know I can't replicate the business model after I sell.
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