Forums vs. Blogs
Someone on DigitalPoint asked a question about blogs vs. forums. The general impression is that forums are harder to start than blogs, but are easier to keep going once they are started. I ran a quick analysis to see if that holds true. The graph below shows monthly revenue for a given level of monthly visitors. Interestingly enough, they earn about the same revenue per visitor (at least, for the sites we have indexed so far).
The second picture is of final sales price for a given revenue level. As you will notice, once you pass $500 a month in revenue, forums sell for about 15% more than blog.
So to answer the question which is better, it depends. If you see it as a long term revenue source, then do whichever one you enjoy more. If you see it as something you are building to sell, a forum will give you a higher return.
Site Update
Finally, finally, finally. We are almost ready to launch new functionality for our website valuation tools. The graphs will include regression values that make it easier for you to interpolate a site value. The search results are color coded so that rows alternate, making them easier to read. And we have added much more information to site data. It will launch in the next few days, so be sure to login early next week and check it out.
One Million Dollar Site for Sale on Sitepoint
I don’t think I’ve seen a site for sale on Sitepoint for $1,000,000 before. I can’t imagine this site is actually worth that unless you have other gaming sites to tie into.
Facebook App For Sale On Sitepoint
This is the first one I’ve seen for sale at Sitepoint. http://www.sitepoint.com/marketplace/auction/12445 It will be interesting to see what it goes for. I’m going to guess no sale given the 4K minimum bid. Facebook apps are too new, and if you are going to play in the space, you can pick something up much cheaper.
Why the Celebrity Niche is So Attractive For Webmasters
If the stats for this site for sale are true, then I have underestimated the celebrity niche. I tend to shy away from anything ultracompetitive, but if this guy went from launch to $500/month and 25K uniques in just two months, that’s pretty cool.
Buying and Selling Facebook Apps
Facebook is the future. At least, for the next couple of years until the next future comes along. That’s why I’ve been investigating Facebook applications, and have put a few out for bid. But instead of building an app, it might make more sense to buy an existing one. AppMrkt let’s you do just that. It’s a place for buying and selling Facebooks apps. There isn’t much there at the moment, which means some of the apps can probably picked up as great deals (I’m highest bidder on a bunch of them, so don’t outbid me!). This is a space to watch, because in the early days of any market there will be great opportunities to buy sites at great valuations and to do some market arbitrage.
The Value of Consistent Earnings
One of the things I see quite a bit is people complaining about low website valuations. The quick and dirty rule of thumb is 10-12x monthly earnings, and many people think their sites should be worth more. Well, plenty of sites do sell for more. Good quality earnings sites sell for 3x yearly income.
What you need to remember is that the price you should pay is ultimately dependent on how much money cash you can pull out of the business, discounted for your cost of capital. You wouldn’t pay $5000 for a site that only brought you $2000 in revenue over the next 5 years. You probably wouldn’t pay $5000 for a site that brought you $6000 over the next 5 years, because you could earn a better return on your money somewhere else. So when you look at a website, you have to figure out how much cash it will throw off, and how long it is likely to do so.
The problem, as any website owner knows, is that web earnings can fluctuate dramatically. You could rank #3 for your keywords in Google and make $2000 a month, then Google decides to change an algorithm and suddenly you rank #15 and make $800 a month. Of course, the reverse could happen as well.
The point is that web earnings are not as predictable as earnings for other businesses, in part because they rely so much on search engines to send visitors. Because they are riskier, you should pay less for $1 of projected earnings than you would for a more steady business, because that $1 is not guaranteed. If you look at sites that have sold for more than 10-12x earnings, one of the most common reasons is that the earnings were steady and predictable.
Buying Domains for Pagerank Arbitrage
I own Jotzel.com, which is an old site I used to run Scoop software (Digg-like software before Digg was around) for a business aggregator. The site has been dead over a year, but still has a Pagerank of 5, so I’ve been wondering what to do with it.
In general, I think there is some opportunity to buy domains/sites with existing pagerank and put them to better use, much the way a business can buy assets at a discount and use them for something better. So I decided to poke through the data and figure out what I should do for a PR 5 site.
Below is a quick summary of what I found.
PR 0-4
Most monthly revenue for a given traffic level: ecommerce site
Highest sale price for a given monthly revenue level: community site (does not include forums)
PR 5
Most monthly revenue for a given traffic level: blog (My gut tells me this isn’t correct, and that we just lack enough data to make a good recommendation here)
Highest sale price for a given monthly revenue level: Resource site (tutorials, free scripts, etc)
PR 6
Most monthly revenue for a given traffic level: directory
Highest sale price for a given monthly revenue level: community
I should also mention that we don’t have a ton of PR6 site sales in the database, so this data is limited.
PR7+
Not enough sales to make a recommendation.
So what this means for my jotzel domain name is that I will either turn it into a resource (maybe an article directory) if I want to get the most out of a sale in a year, or I can maximize my monthly revenue by building it into a directory and linkbuilding to get a pagerank of 6.
How To Sell Your Website Without Coming Off Like a Jackass
In order to fill the database for our site I didn’t want to write a spider, I wanted to do some data entry myself and figure out what I was in for. I scrolled through a few thousand forum posts just to pull out 200 legitimate sales with quality information attached. It took months, but I learned a ton in the process. The most shocking thing to me is that so many people act like jackasses when they sell their websites. It’s like they want to pull a fast one on somebody and sell it for more than it’s worth. Don’t. You’ll get a bad rep and will have problems selling other sites. I’ve seen it happen on countless threads. And the truth is, many many many sites sell for more than the standard 10-12x monthly earnings. The way to do that is to find the right buyer, someone who gets more value from the site than just the monthly cash flow. So how do you find a good buyer? Start with a good listing.
My definition of a good listing.
1. Include the URL - Why not? I never understand why people want to keep this private. What are you hiding? By making people PM you for it, you miss out on a lot of good potential buyers.
2. Post traffic numbers - I don’t think I have ever seen a website for sale where the seller didn’t list traffic numbers and the buyer didn’t ask. It’s usually the first question on a thread if it isn’t included in the seller’s first post. Include unique visitors, visitors, and pageviews. This tells a buyer whether you have repeat traffic or not, and how much people poke around the site when they come.
3. Be prepared to disclose revenue - My personal preference is to post this publicly, but if you are uncomfortable with it, be prepared to provide proof to people who ask. I like to see a full year’s worth of earnings to understand how revenue fluctuates. I’ll buy a site with only one month’s earnings, but I’m not going to pay much.
4. SEO Stuff - Post age of the site, pagerank, and any keywords it ranks highly for (if you rely on SE traffic).
5. Be honest about where traffic and revenue come from - Seriously, do you think the new buyer won’t figure it out?
If you can’t post at least the information above, don’t waste your time because answering a million questions on the thread just to weed out non-buyers will waste too much of your time. Now, in order not to come off like a jackass, I suggest you do the following things too.
1. Post a bin upfront - I am amazed at how many people wait to see where the bids fall before they post a BIN. You own the site. You should know what it’s worth to you to let it go asap. And with a BIN, you are more likely to sell it quickly to someone who really wants it. You can always lower your BIN later, no one will complain, but not setting one sends a message that you don’t know what the site is worth.
2. Don’t sell then back out - Some people sell a site at BIN, but then get a higher bid and dishonor the BIN. Those people are jackasses. I should compile a list of everyone who is done it, so you know not to buy from them. Some people don’t get the bids they hope for, so they refuse to sell. If that’s a possibility, set a reserve price up front.
3. Make sure your site is ready - I have to laugh when someone tries to sell a site and the next post on the thread is “your site is down” or something like that. Look, websites do go down from time to time, but this happens on probably 6-8% of sales threads. That’s too high.
The way to make money selling websites is to find somebody that has a real reason to value the site more than you. If you have an adsense site that makes $30/month, and I own a high PR site on the same topic, I’ll probably pay more than $300 for yours, because I know that a link from mine will increase the adsense earnings.
So don’t be a a jackass when you sell your site. Be honest, be open, and you will get a good reputation that will serve you better when you sell sites down the road.
Pligg is for sale
Pligg.com is for sale at Sedo. According to this thread, there has already been a bid of 25K. Unfortunately, not enough similar sites have sold for me to estimate the value of Pligg based on historical data. But, I would guess it will go for around 40-50K because it is undermonetized. The new owner could release some premium modules/features and charge for installation while keeping most of the site free, and that could make some good money.