« Seeds For Wealth Offering A Free ReviewMe | Home | Blog Sale Gets Plug »
How Much Time Will It Take To Run A Website?
By Max | May 27, 2007
While I was browsing Sitepoint today, I ran across this listing. This is a blog for sale called NetBusinessBlog, and its about earning a living in the online arena. This seems like a pretty decent blog since it earns about $1000/month. The site also boasts about 1500 Feedburner subscribers which provides a ton of exposure every time you write a post. Reading through the comments section of this sale listing inspired me to write this post.
Most of the revenue earned by the blog is generated from the author/owner writing paid reviews. The entire business model behind the site is comprised of writing a useful article each day and having a bunch of readers stop by to check it out. The main problem with purchasing a site like this (like most blogs) is that you are essentially purchasing a job. How many hours a day does it take to do all that writing? I would guess that each post requires an average effort between 1 and 2 hours. Not only do you have to write the article, but you have to think of what to write. Most of the time this will require a little research on the part of the author. Now assuming you have an average of 5 posts/week, that requires 7.5 hours of work per week or 30 hours a month. $1000/30 = $33/hr. Thats why the maximum bid on this site is only about 5 months revenue.
Don’t get me wrong. I like the site, and purchasing it would be a great way to get into the ultra-competitive “Make Money Online” niche, but while earning $33/hr is a nice wage, its not good enough to take on the risk for purchase unless you have a clear plan on how to improve the site or traffic. Compare this to buying a forum site with the same $1000/month earnings. Which do you think you’ll spend more time with?
I didn’t want to dwell on the specifics of this site in this article. I just wanted to point out why certain types of sites, like a blog, aren’t always the best candidates for a purchase, or at least not at the price multiples we’re used to. However, I should mention that I did a little more research into the sale of this site, because I was intrigued. The site was only started in January, and yet already has so many readers. Somehow he managed to get on digg several times in February. From day one when he started this site, he was getting over 500 uniques per day. Obviously some amount of advertising went into getting this site noticed. A potential buyer should be aware of just how this affects future earnings. Since a lot of the power of paid reviews comes from traffic, boosting that traffic through advertising will certainly have an impact on the price you can charge. This site’s alexa ranking was 20,000. Is that really today’s ranking? I don’t think so. Based on his April and May stats, I have two websites that get more traffic and both of them are ranked lower in alexa than 20,000. Who knows whats going on? This sale has a few red flags, so I am going to stay away.
Topics: Website Valuation |
May 28th, 2007 at 12:48 pm
Other than the red flag of the alexa search ranking, I wonder if someone could pay, say, 5000 for the site and just let it sit there for a year. Could you make back 7000 without adding new content? If so, it’s still better than buying stock, right?
May 28th, 2007 at 12:53 pm
I’ve been thinking of purchasing a site lately. Looking at buying a forum that can hopefully run itself.
May 28th, 2007 at 6:19 pm
Matt,
I don’t think you could let a blog sit there. A lot of the traffic will probably be coming from people who are enticed to visit after reading their RSS feeds. He has 1500 RSS subscribers that can’t be ignored. Also half of his revenue comes from paid reviews and direct ad sales. Unlike adsense or other ad networks, you have to do some work to get this money.
Like I said, its a nice site, and I think that $5-$6k is a good price for it, but I don’t think that he’ll get anywhere close to the $20k buy it now price. Also the buyer of this site needs to really know their stuff when it comes to the blogs niche topic. Content drives traffic.
I think this is just one of those cases where the site is worth more to the current owner than it will be to any future buyer, and I suggest that he just keep it.
May 28th, 2007 at 6:22 pm
2 Bros,
My last purchase was a forum, and I highly recommend that business model. The users create the content for the most part, and that in turn drives the traffic allowing you to profit off their work. Don’t get me wrong there are still some administrative tasks, and you still need to promote the site, but content creation is largely automated.
Make sure your target acquisition has reached a critical mass of daily users. You need a decent amount of daily traffic to entice the passersby to sign up and join in the conversation.
May 28th, 2007 at 9:19 pm
[…] How Much Time Will It Take To Run A Website? | […]