Niche websites are now relatively easy to create and run without possessing advanced technical skills, thanks to modern web publishing platforms like WordPress. Combine this publishing ability with a little keyword research, basic SEO skills and an appropriate advertising or affiliate program and you have all the essential elements to create a largely passive income stream. Unsurprisingly there is a growing number of individuals cashing in on this opportunity.
As a result there is a growing marketplace for those wishing to trade these niche sites, fueled by those who specialise in creating them specifically with a view to sell them on for a quick profit (a practice known as “flipping”). Conventional wisdom seems to suggest a nominal value of around twelve times average monthly earnings – in other words a year’s income – for these sites. Judging by the number of those involved in this market, it must be profitable enough. But personally I would never sell one of my niche sites for so little.
I look at it this way: how much money would I need to earn and stash away in the bank or some other form of investment in order to generate a certain amount (for argument’s sake let’s use a figure of $100 per month)? At a rate of ten percent per year I’d need $12,000 in capital. Of course in the current climate I’d be unlikely to achieve a ten percent return without taking on a lot of risk – perhaps it’d be more realistic to expect a three or four percent return, in which case I’d need between $30,000 and $40,000 to generate that $100 per month.
On the other hand, using the “twelve times earnings” rule of thumb I mentioned earlier I could only reasonably expect to sell my $100-a-month site for around $1,200 – which I certainly could not invest to achieve a similar return. So the site is worth far more to me earning a steady $100 per month, year after year than the single-year value of its earnings up front.
Of course circumstances may force one to sell an asset for the sake of ready cash, but given the choice, my advice is always to hang onto these “virtual capital” assets for as long as possible.
The last few weeks I’ve been coming across this “Smart Pricing” term quite a lot – people tend to casually toss it into conversations without seeming to feel the need for any further explanation, other than that it’s a Very Bad Thing. I’m not sure if this is:
- to give the impression they know more than they actually do, or
- because it’s so obvious that everyone knows exactly what it’s all about!
Well, I don’t mind admitting that I don’t (or didn’t) have a clue what they were talking about, so I decided to find out.
Is Smart Pricing still relevent?
The first thing that struck me when I did a search for adsense smart pricing is that a lot of the top results seem to date back to 2005, which led me to wonder if this is even relevent anymore! After all, three to four years is a long time in cyberspace.
However, there are plenty of references to it in Google’s AdWords documentation, so one must assume it’s alive and well.
Continue reading ‘Adsense Smart Pricing’
What’s your blog or website worth? The short answer is: it depends who you ask. And of course, no matter what anyone says, it’s only really worth what someone is prepared to pay for it. Nevertheless, it’s an interesting question in these days of the Credit Crunch.
Believe it or not, there are plenty of blog value calculators out there, offering to give you the crucial figure. So, just for fun, I plugged in my url to see what they have to say about the old hippo:
Continue reading ‘How much is your blog worth?’
Just time for a quick tip today. If you’re using PerformancingAds, it’s essential that you remember to tick the No Follow checkbox in your region settings:
It’s not ticked by default, so it’s up to you to do it for each of your regions. Why?
Continue reading ‘Don’t forget to Nofollow your PerformancingAds’
There’s recently been a small debate about Google’s stance on paid links in the comments section of one of my posts, and whether or not you run the risk of being penalized if you buy or sell links. Mitch helpfully pointed us to an article by Matt Cutts on the subject. In case you don’t know, Matt is a Google policy maker who had a big hand in drafting the original quality guidelines.
I spent an enjoyable afternoon reading that and a few other related articles (and their comments) on Matt’s site and the official Google guidelines to try and clarify exactly what Google’s position is. Needless to say some of the comment exchanges are fairly heated, with a lot of emotion on both sides. This is my understanding of the issues:
Continue reading ‘Does Google penalize paid links?’
