In Focus: Investing in websites, Part II

by Tony Clifton

In Part I we reviewed the general issues related to website investing. Now, let us see what are the categories of the websites you can invest in and play few case studies.

The most important to have in mind is that the site you buy must be either fully automated or within an area which you are knowledgeable about. If you buy an ezine about astronomy will you be able to write articles for it? Or if you buy a website selling software will you be able to support that software? This is very important to think about before spending your money or you may end up having a great site that you can't make a penny with.

Content Sites
The content sites can be relatively easy to profit and usually can't be consistent in their revenue. The most important questions to ask here is if the content should be written by your on regular or not regular basis or are there people who write it. If there are writes, how much is their payment. If it uses free articles does it get enough traffic (the sites without unique content rare rank well in the search engines).
The content sites usually profit from advertisings. They can be PPC ads such as Google Adsense or Clicksor, directly paid ads from your advertisers or affiliate programs - ads which will bring you profits when someone buys from the advertiser.
The big advantage of the content sites is that the search engines love them, especially if some or parts of the contents is unique.
Content sites for sales however are hard to find - usually the sellers offer turnkey ones, which won't make you a penny if you don't know how to bring visitors in.

Membership sites
The memberships sites category include forums, chats, dating sites, communities, picture sites etc. The revenue most often comes from ads and affiliate programs, but there are some sites which charge the members for various levels of membership.
The best thing with these sites is that they do not require too much work from you to run. The members are these who create the content and you just collect the cash. The forums usually requre moderation, but it is easy to get volunteers for that.
The hard side is to get members in. Noone wants to post in an empty forum or to register themselves in an empty dating site. So when buying a membership website you must look for established one with member. Never buy an empty forum - there are many free forum softwares, so you are giving your money for nothing.

Here is an example of a good membership site deal: http://www.sitepoint.com/forums/showthread.php?t=362900. The monthly revenue is $200 and the BIN price is arround 3k. So if you assume all the info is correct and buy this site, you have a "HYIP" paying 6%-7% monthly. Not bad at all.

Sites seling products or services and e-commerce
This category is usually suitable for more experienced investors. You must make sure that you can keep providing the service or product which the website offers. You may need to spend money and efforts on marketing promotions. Example of such sites are webhosting companies, various e-shops, even HYIPs or gold games.

Here is a sample deal: http://www.sitepoint.com/forums/showthread.php?t=363135. Monthly revenue $300+, BIN price $5,000. That makes 6% monthly if you keep the same traffic and revenue.

Internet Tools
A very sweet category of sites for lazy investors. The Internet Tools are various scripts who do somehting useful and do that absolutely automated. You have to do nothing, the site just runs and makes you cash. Such sites are web proxy scripts, free mail services, search engines, pages for storing bookmarks and many more. If your tool is useful, the visitors will bookmark it and will come again and again to use it. You can profit either from ads or from paid usage of the tool.

Example: http://www.sitepoint.com/forums/showthread.php?t=363174. If he really have 1.3 mln monthly pageviews (you have to verify that) and sells the Proxy only for $100, this is a golden mine.

Adult sites
An adult with traffic is a great cashflow. An adult site without traffic worths zero. This market is really presaturated, so you must ensure the site gets good amount of visitors before buying it. Don't hope that you'll just place it somewhere and the visitors will come.
When buying adult site you must check also if this is allowed in your country, you must have in mind that it requires adult hosting and adult payment processor. The site may also require you to constantly buy content. Some adult sites are just TGPs working with a simple script and requiring you to do nothing, but for the others you will have big expenses.
You MUST ensure also that there is no child pornography in the site you are going to buy.

In general the monthly profit that you can expect from a good website deal is between 5% - 10% monthly. Almost fraud free and much better than your bank.

Published at Mar, 30 '06 ; read 1088 times;

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