buyawebbiz.com

I just returned home from Ken McCarthy’s System Seminar in Chicago. All I can say is…..PHENOMENAL. There is so much I was able to get out of this year’s seminar, I literally had a headache. It was a 4 hour drive home, and I couldn’t stop thinking of ideas that I came away with from the weekend. I went last year, but I think I was overwhelmed. This year, I have so much that I can put into action, I don’t know where to start.

Since it’s late, I will have to go through my notes tomorrow. A lot of the stuff I learned I will be able to apply to purchasing websites. There will be more to come this week hopefully. Right now, my brain needs a rest!

I leave tonight for the System Seminar in Chicago. I can’t explain how excited I am. It’s funny, every one I work with asks why I am going to Chicago… I reply “nerd convention”. (The inside joke is that everyone calls me nerd boy at work, so I play it off like that.)

I went to this last year and it was anything but a nerd convention. There are a lot of bright minds that show up here. I was able to have dinner with a couple guys last year who are doing quite well for themselves with their internet ventures, and I aspire to be in that category very soon (relatively).

I have a four hour drive up there, and I am sure I will have a lot of things running through my mind. I know coming back will be even worse because I am sure I will be teeming with new ideas. I just have to figure out what to focus on and just go get it rolling.

I will have a lot more to post when I get back. I might even be able to put a couple together when I am up there. If you happen to be going, drop me a comment. I would be happy to meet up while we are there.

Have a great weekend!

I am a big fan of Clicknewz. So when Lynn Terry posted about a new blog she started, I jumped on it pretty quick (and added it to my Google homepage with the rss feed). It’s called Midnight Marketing Snack, and it’s a really fun concept (in my humble opinion). She does quick little nuggets about internet marketing, and they post every day at midnight as you might have guessed from the name.

It reminded me of another site I stumbled upon recently, Woot.com. Woot posts one product a day for sale. Once it sells out, it’s done, there is no more. If it doesn’t sell out, you can’t get it the next day. What I find so interesting about the site, though, is that the first hour they post (midnight also) they sell a LOT of products. Sometimes more than 15% overall. They keep product stats and I have seen times where the first one to purchase something is 3 seconds! You might think, but they only sell one product? Yep, and I am guessing it is working pretty well for them, judging by some of the product sales stats I have seen.

What does this all have to do with buying a web biz? Not much really, except they are examples of sites that I would be inclined to purchase. The marketing snack blog is set up to auto post, so she loads it on the front end and then just lets it sit back and collect traffic. Work hard for an hour a month getting it set up, then go about your other sites. The only thing I wouldn’t like about Woot is the messing with the physical products. Otherwise, they have a great site that has entertainment value as well (check out the blog or the podcast).

What I look for when evaluating new potential portfolio sites center around two main things: traffic and proof of income. This may seem logical and maybe too simplistic, but those are really the big two things that really matter. But, as with anything, there are caveats to these also. You are going to have to learn how to read traffic charts and also need to ask the right questions to determine if the income is truly consistent or if it is from separate project that the owner was working on (a pay per click campaign, for example.) Traffic is going to depend on the scope of the site you are dealing with. If you are looking for a simple Adsense site, then you are going to want a lot of traffic, in my humble opinion. If you are looking at a dropship site, you might not need an exorbitant amount of traffic as long as the conversion on the site works well. So they both are going to be a dynamic evaluation.

Other things that I would look at: backlinks, advertising paid for, current and/or pay per click campaigns,

Let’s take a look at each of these.

-Backlinks
Google ranks a site based on popularity. Also, they look at how popular sites are that link to your site. So knowing where inbound links are coming from is helpful. To find out how many links are coming to you site, you go to google and search for:

-Current traffic
Some site sales postings will talk about how much traffic is coming to the site. One of the questions that needs to be asked is if this traffic is paid for or organic (link to definition). Why might you ask is this important? The main reason is that a site could be making a ton of money on affiliate programs, but if the owner is paying out half of the profit in PPC traffic, the deal might not look so sweet. Plus, while PPC is a good game, there is definitely a process behind it. One of the best people to learn this from is Perry Marshall, whom I would call a PPC expert. One example that I once saw was a site for sale that claimed income of around $150k/month, but he was also spending around $45k/month in advertising. While this is a good thing, I am not quite at a point where I can afford spending $45k on advertising in a YEAR let alone the first month out of the gate. So there is just some planning that needs to be done.

-Current advertising strategy
Knowing this, as mentioned above, will help you determine the profitability of the site. I have seen some sale postings that offer up the advertising campaign as a bonus with the sale of the site (which I think should be a mandotory when buying a site). This includes the PPC campaigns, but also other types of promotion the current owner may be doing such as banner advertising, ezine ads, offline marketing (postcard mailings, classified ads, etc) and so on…. the point is, don’t assume…ask. If a site owner doesn’t want to fess up, then buy beware. They might be hiding things for a reason.

Another thing that I watch for is salesy copy when selling a site. I am not saying that when selling a site, you shouldn’t promote it…. but one of the things I see quite often is the claim that the site has “huge potential.” Okay, I don’t care what you are doing on the web, EVERY site has HUGE potential. Look at Alex Tex and the MillionDollar Homepage. Who knew that his model would be as wildly successful as it was. Alex did some ingenious things to get that site going, but no one thought he would make a cool million in just over a half a year. So when I see in a sales posting, that a site has a huge potential, I enter with caution. I have a ton of site ideas on my whiteboard in my office, and they all have potential too. It’s what you do with the site that counts. Just use discretion. You have to do your research to find the true gems.

Stay tuned: I am thinking about having a ’site for sale’ posting area. I will explain why in the next entry.

On one of the sites that I watch for sites for sales (www.sitebazaar.net), I just noticed some verbage that I must have glossed over before:

“It is not easy to buy a website, but on the other hand you can come across one of the best investments in the market. For example suppose you want to buy a website that generates an income of $500 per month. The value of the website is mostly calculated as monthly income multiplied by 12 to 18 which bring the total value of the website to around $7500. In compassion when you purchase a flat for $100,000 it will in average generate a rental value of $500.”

They are comparing buying a piece of rental real estate and the income gained from it and a website that generates income on a monthly basis. I see this as a very general, but good statement, but there is more to it.

Real estate investment is a hot money making topic. If you have seen any of the late-night informercials, you know that about 40% (maybe more) are about how you can by this product to show you how to flip properties and make a full-time income and then some. There are some things that aren’t that attractive to me about real estate though. Cost of entry, which could be argued based on all of the “No Money Down” techniques (think Carlton Sheets or Robert Allen) is one that I don’t really want to deal with. Tenant finding and tenant retention is another, although you can hire a management company to do this. But it seems there are more things that need to be done in order to make a decent living from that. Upside is that the properties generally appreciate handsomely and if you buy right, you can come out smelling like a rose.

Internet real estate can be a lower cost of entry, based on the quote from sitebazaar. But, again when purchased right, and maybe with a few little changes here and there, you can have a site that runs virtually free of management, and all you do is sit back and collect the checks.

Obviously, this could be a much broader argument (for both sides), but I think that buying websites can be just as lucrative, if not more, than real estate, with maybe a little less hassle.

I hope I really don’t have to answer this question since obviously my site is centered around it. But for further proof, here is a little post I stumbled onto: http://www.ensight.org/archives/2006/04/24/blogexplosioncom-sold/

This was post on Jeremy Wright’s blog. Jeremy runs b5media, a popular blog network that I need to look into a little more. He just helped broker the sale of blogexplosion.com, which ended up being in the 6-figure range (not too shabby!). It still blows my mind how web businesses start out and some just blow up into something like this one did.

Find this post was a two-fold gain for me, though. First, I re-confirmed my interest in buying and selling sites for a profit, plus, I found a cool (and free) way to market this very blog. I will let you know how it goes as I get more into it, but I am excited to say I joined blogexplosion to help with my promotion efforts. Should be fun to watch!