2007-06-09 19:12:42
Why Web Sites Are Oftentimes Incredibly Undervalued And What We Plan on Doing About It
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These days, there are literally hundreds of ways to make money with a web site. More and more companies are finding that the Internet is a cost-effective way to spend their advertising dollars. It can come as no surprise that "brick and mortar" companies are expected to double the amount of money that they spend advertising online in the next 4 years. If you are promoting a movie, a new brand of shoe or a new car, the Internet is quickly becoming the most valuable tool in a company's arsenal of advertising avenues.
 I think of a web site as a rental property. You buy that property, and hope to make monthly income from it. The money that you make monthly will eventually pay for the website, and you will soon find that you have completely paid off the cost of acquiring the website and are now banking 100% profit.
If you buy a house, you can expect to own the home free and clear after 20-25 years. With websites, you can normally expect to own the web site free and clear after a short 3-12 months! And that is if the website is properly monetized, which it usually is not. Most people don't know about properly blending Adsense ads, Text Link Ads, and other money-making possibilities on a website.
Let's take a real world example. You have a website with a page rank of 4, that was first put online back in 2003. The site is about exercising, and currently has about 150 unique articles on the site and a good number of backlinks. Meaning, the site is pretty well-established, and not going anywhere in the search engines.
The owner of the site is currently making about $20 / month from Adsense, and has just put the site for sale at $200. This is an absolute steal, and here's why:
First off, you can without a doubt do a better job of blending the Adsense ads into the site, or placing them better. Usually with a simple change or two, you can double your Adsense income. So let's say that you acquire the site for $200. You can likely double the Adsense income over night, and therefore the site is now making $40 / month from Adsense. Meaning, that the site will pay for itself in just 5 short months. Compare that to buying a rental home. Imagine having rental income pay for the house within 5 months!
That's not all. With a Page Rank of 4, you can include Text Link Ads on the site. If you sell 7 text link ads for $10 each, the site is now making $70 / month, on top of the $40 a month in Adsense. These two changes, which would probably take you 15 minutes to implement, just increased the site income 450%! Now the site is earning $110 / month, and you will own the site free and clear in less than two months. Not only that, but you have an asset that is probably worth over $1200. You put a site making $110 / month on sale at a forum like Sitepoint, I can guarantee you that you would get an offer of at least a grand for it.
$110 / month isn't a ton of money, but over the course of a year, that's over $1300 in passive income. If you want to add more content, you can increase this monthly take even more. If you rinse and repeat 20-30 times, all of a sudden you have a small army of sites that are making you a lot of money.
So our plan? It's threefold:
1. Monetize our existing sites. We have some pretty valuable web assets that can make a lot more money than they are making now. Our first step is adding Text Link Ads to many of our sites.
2. Increase the amount of content being generated for purposes of increasing Adsense income. We can be making much more with Adsense.
3. Start acquiring web properties, monetize them, and continue to sink any revenues generated into acquiring new sites. We are going to start with an initial budget of $2000 US to acquire new web properties. We will be acquiring under-monetizing web sites and undervalued domains. Every penny that we make from Adsense, Text Link Ads and affiliate sales will be withheld and spent on acquiring new properties. We will publish a post at the end of each month, detailing our revenues, expenses, and what we are looking at acquiring $$ wise for the next month.
Technorati Tags: domain names - web sites
Filed under: Making Money Online | General Knowledge
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