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Mainstream brick and mortar small businesses with good books, taxes paid, domestic banks, years of operation and contracts in place average less than 3x SDE or EBITDA. I very seriously doubt a 3x SDE price is justified for an adult website. 10 months earning reflects that there is a very substantial risk premium unless you own a large similarly themed network and can monetize better than the existing owner.
Be that as it may, the professional sellers play against other players, not against the house. If they can get fool newbies in at that price, I guess they will.
"The value of the small business is mostly determined by the cash flow (or business brokers use the term "Seller's Discretionary Earnings" instead to be more accurate). Seller's Discretionary Earnings (SDE) is defined as net income before taxes (operating income); interest; depreciation and amortization; owners compensation; owners benefits; and non recurring expenses.
Most small businesses sell for 1.5 - 3.5 (multiples) times the yearly SDE, depending upon the value factors of the business. Things that determine the multiple or value factors are the stability of historical earnings; business & industry growth; type of business (service with few assets to manufacturing with significant assets); location & facilities; stability & skill of employees; competition; diversification of products, service & geographical markets; desirability of the business; depth of management; and terms of the sale. The national average is 2.76 times SDE."
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