How To Value Your Websites

My second project, the one that doesn't have a ton of long-term potential, actually grew out of personal necessity. It's a group of tools for valuing websites based on historical website sales. About 18 months ago, when Businesspundit had a pagerank of 7, I realized that I could bump up the pagerank for a really low site just by linking to it. I got the bright idea that I could monetize this by buying websites with low PR, linking to them, waiting for an update, and selling them off. Initially, I bought what the internet marketing community calls Made-For-Adsense sites. These sites have several pages of content or some sort of free tools, but are primarily constructed so that you find them through a search engine and then click on an ad. (Don't confuse these with parked domains that only have ads, they are two different things) Many web marketers set up thousands of these sites. They may only make a few cents, or at best a few dollars a day, but multiply that by 4 digits and you can make some decent money.

After buying and selling several of those websites, I became interested in other types of sites. I bought directories, tutorials, ecommerce sites, and I went through a VERY steep learning curve. The website market is not very liquid or transparent. The seller has a massive information advantage over the buyer, so much so that websites typically sell for 10-12 times monthly earnings, which would be a steal for any other kind of business. But they sell so low because of the risk you take on when you buy a site. I was burned a few times early on, but I stuck to sites in the $100-$300 range, so it was money I could afford to lose and chalk it up to a learning experience. I also did really well with a couple of sites, making some easy money for doing very little work.

As a quick aside, I need to tell an interesting story that I think accurately reflects the stupidity of the average person. If you search for making money online, buy and sell websites, and stuff like that, you will get a lot of these wild pages with red text, yellow highlights, letters that say "From the Desk of..." and always start with "Dear Friend." It's really pretty ridiculous. Well, several months ago I bought one because it sold a video series of How to Flip Websites. The videos won't make you rich, but if you like to write and build simple sites, they really can show you how to make $50-$100 with a few hours of work. Knowing that I was going to build this website valuation tool, I wanted the videos as an add-on, and I wanted the list of previous customers because they are good candidates to sign up at my new site.

I had never owned one of these crazy text sites before, so my first thought was that I would clean it up and make it look more professional and mainstream. But I like to experiment, so I decided instead to put up two new sites - one with a blog format and one built on Joomla with a professional looking business template. I spent a few weeks getting the Google Ads right so they had a good click through rate, then I changed them weekly to point at the different sites. All sites had similar levels of traffic, yet the cheesy sales page site outsold the others 5 to 1. I was shocked.

The other sites came down, and I'm trying to figure out what I can do with the existing site because honestly, I feel somewhat uncomfortable owning it in it's current form. Making money online is all fine and good, but with this site I feel like I'm part of the web underworld. Anyway, if you find the internet marketing world interesting, I would encourage you to check out the extremely funny blog at Internet Marketing Sucks.
More at:http://www.valueontheweb.com/
via-businesspundit