Some experts might call our search for the right website (to invest in) a futile attempt. But we were sure we wanted to invest in just the right site- it needed to be low risk and have minimal maintenance with better than average longevity. It wouldn’t go down with whatever changes Google makes to its search engine algorithm. Preferably, it would have a steady period of payback running up to say 24 months. Most importantly, it would offer a lot of value to its visitors. That is the kind of website we were scouring the web for.
After up to five weeks of severe pursuit, an information website -geared towards people who love internet culture and geeky stuff- caught our attention.
It was 7 years old and run by the person who had built it from the ground up. All the articles and content on the website were well-researched, engaging and nicely presented. The owner had dabbled in SEO for a while and optimized the website to rank well in search engines.
His efforts paid off big time as the traffic during the month of website acquisition was over 50,000 unique visitors. More importantly, the traffic was coming through from diverse sources, which meant that the site would still do well even if one or two sources of traffic did not help much.
On top of that, he had practiced white hat methods to build traffic to the website. As a result, each time Google rolled out a search engine quality update, the ranking of the website had gone up.
From what we found out, the owner was not able to milk the most out of the website, and it had a lot of potential to offer in terms of monetization. Finally, we ended up picking up that web property from the marketplace for 20x monthly revenue ( 20 times the average monthly revenue of $500). For $10,000, it was a bargain buy because the property had all the right things for it to grow bigger and appreciate in value in a short span of time.
If we wanted to, we could hold on to it for a while and make some money off it and then sell it for a higher price say $20k. We would make $10k in profit on top of $1,500 in earnings. However, our strategy was to get the monthly earnings up and to hold on to the property for a while. We have always preferred to buy and hold sites until earnings hit the peak.
The site was very promising in terms of potential and had enough in it to bring in a higher revenue each month.
After coming on board, we formally announced the community of users, and visitors that the ownership of the website had changed hands and as a new owner we were itching to ring in a spate of changes- for the better.
Firstly, we focused on optimizing the content and marketing the site. We wanted to find out if we could improve the performance of the pages so we made use of Google Analytics to create different variants of the top pages and articles on the site and made a small experiment with that. To promote the website and build traffic to it, we looked for websites that had existing readers whose interests matched our target audience, and then reached out to those owners to find out whether we were achieving what we wanted with our website.
Secondly, we went about testing out a few strategies to monetize traffic in order to figure out what method worked best to make more money. Tribal Fusion -the advertising network that was in play- was not fully utilized. We decided to pull the plug on Tribal Fusion for we had tough time sorting out the types and placement of ads. Eventually, we substituted it with something we have had great results with- Google Adsense.
The third opportunity came in the form of the email list that the owner had built. However, despite receiving many email inquiries from third party publishers and private advertisers about buying ad space, the owner, for some reason, could not respond to them, thus missing out on potential ways to bring in more revenue.
In terms of revenue, this three-fold strategy worked like a charm. In the first three months of managing the web property, the earnings went up from $450 per month to $1600 per month, which indicates almost 400% growth in earnings. On the odd occasion, the revenue shot up to $2000 and upwards, with $3000 the highest ever monthly mark.
The investment in this web property is paying off now. It won’t take much longer for this property to make it to top 5 performing assets at BlackBook Investments.
Here are some takeaways if you are considering investing in websites
Mohit Tater is the founder and CEO of BlackBook Investments through which he helps people invest in online businesses and digital assets. Apart from advising clients on SEO and marketing he also blogs at mohittater.com.