In Focus: Investing in Websites, Part I

by Tony Clifton

You have probably heard that some people make thousands per day from their websites. And this is true - the web is a great money making tool for these who know how to use it. The best webmasters (speaking about individuals here, not about companies) can make 100,000 - 200,000 monthly - yes, just of websites - usually 2-3k daily from Google Adsense and 2-3 from affiliate programs.

This is great, isn't it? So what are you doing here investing in crappy HYIPs instead of making websites? Well, the bad news is that only 1%-2% of the sites in the net are successfull. If you want to earn with websites you must stuy a lot and i mean really a lot, you mjust read forums and blogs all the time, you must experiment and work hard. You must know SEO, SEM, web development, web design, web administration and many more - or you will ahve to hire people for each of these.

But there is something which an investor can do to make cash from website. You can just invest - buy websites and run or sell them for profit without all the knowledge and hard work which is required to build ones from scratch. If you have a good nose for investing in HYIPs you can certainly do well with sites as well. All that is required is to choose the good ones and have some basic knowledge to run them.

Usually a website is sold for a price 10 - 20 times of its monthly revenue. This is not a universal rule, but if you start this kind of investing this is what you need to look for. This means that you can expect 5% - 10% monthly ROI. Not bad for fraud free investment!

Where to buy websites
There are a lot of places - sedo.com, websitebroker.com, buysellwebsite.com, sitepoint.com and many others. I personally prefer Sitepoint's forum because there are discussions rolling with each site and you can usually see a proof for the generated revenue.

What to look for

- Assuming you are not an experienced webmaster, you must look for sites with traffic and revenue. People who are in this business can make money from turnkeys, but if you are just an investors do not buy turnkey websites regardless how great they are looking. If you do so you will most probably be disappointed that just noone comes to your new site!

- How is the traffic generated. The most preferred is the balanced traffic - hits from directories, search engines, other inbound links etc. You need to ensure that the inbound links are not coming from other websites of the seller - or if they are from their sites, make sure that they will not remove the links. If there are visitors coming from PPC or other paid advertising you should calculate these expenses

- How is the revenue generated. Is the site selling something? Can you keep providing it? Is the site profiting from ads? If so, can you keep these ads - for example if the site makes profit from Adsense, but you can't have Adsense account you can't be sure that you can make the same revenue. Is the site offering unique content? If so, this means you must write it or hire someone to do it. As a passive investor your preferences will probably be to fully automated websites which do not require much work to be run.

- What are the others bidding. Thats why I love Sitepoint's forum - you can see the other's bids and the discussions going. If noone is interested in that website then most probably it is either bad or that market is presaturated. There are experienced webmasters and professional website traders and investors there so you just have to follow them.

In Part II we will make few case studies and will see how and when to sell the bought website.

Published at Mar, 23 '06 ; read 1085 times;

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