This is as much for my knowledge as the original poster, but what discount rate would you use? He doesn't exactly have a beta to do Weighted Average Cost of Capital with, or am I totally missing something?
I've always estimated the discount rate based on the expectations for growth from the buyer. At the end of the day, the valuation on a site or business is simply whatever you can get for it. A site might be worth more to a buyer who sells a similar product whereas it might have less value to someone in another industry.
Dunno. I'm pretty sure there's some magic numbers out there for certain industries. I think it's one of those variables you argue about during negotiations.