Building a blogging business and making money from blogging is one of the most attractive opportunities in the new decade. Buying blogs makes a lot of sense post pandemic.
A blog can be a very lucrative business, especially since it cannot be shutdown. When a blog can stay open 24/7 during a pandemic, of course the reliability of its revenue increases.
Further, with interest rates so low, the valuation of blogs has gone way up because blogs are high margin businesses. When you have a cash cow, please hold onto it for as long as possible, especially in a low interest rate environment!
Below is Mike’s story on how he built a blogging business running his own sites, selling blogs, and buying blogs. Today, I’m much more partial to buying blogs rather than selling blogs.
How I Build A Large Blogging Business
Three years ago, I was told by many bloggers, “You will never make money blogging. And if you do, $200/month will be your highest peak ever.”
Three years ago, The Financial Blogger was averaging 500 visits per month and I was ecstatic when I made my first deal of $10 for a link.
Three years later, I now run three financial websites, bought two of them and flipped a blog within a year for over $15,000. Starting your own blog is a no brainer in the internet age.
What used to cost thousands of dollars to start a site now costs as little as $12 a year for a domain name and $2.95/month with a Bluehost account. There’s no reason why everybody shouldn’t start their own to at least own their brand online instead of letting Facebook, LinkedIn, and Twitter get rich off you.
When I asked Sam if I could write a guest post for Financial Samurai, he asked me to include more details on how I appraised blogs and how do I decide to send $10K over the wire (or more!) simply to buy a “.com”. This is how I started my blogging business.
Look at Blogs As A Real Estate Investing Opportunity
When I first started my blog, I went into a partnership with one of my friends (who is the co-founder of our company). He has been in the website industry since the 90s, well before the .com bubble.
He told me to picture a rental property in order to understand how a website can generate income and how it should be valued. Traditional real estate is one of the best asset classes to get rich over time. However, online real estate is the new way to get rich over time.
Why Online Real Estate Is So Valuable
When you value a rental property, you will most likely pay between 10 to 15 times the yearly revenue. Therefore, if the property generates about $40,000 in rental income, you will pay between $400,000 to $600,000 to purchase it.
When you value a website, you will most likely pay 18 to 24 times the monthly income. Therefore, your investment return can easily reach 50% – 100% the very first year!
While both type of properties will generate monthly income, the first one will be paid back over 20 years (if not more) and the latter will have a payback period of just two years.
So now that I have proven that there is a great investing opportunity, how do you value a website?
How To Value A Website
To build a blogging business, there are several metrics when we are about to purchase a website. So before we even start with the calculations, we are looking at minimum requirements. The site must be:
– At least 1 year old (in order to have valid traffic data and to have it recognized by Google). The longer the domain age, the better.
– Minimum of 10,000 visits per month (it’s easy to build a blog with 3,000 visits/month, since we are looking to save time, we need a good visitors base).
– Ideally have at least 50% of visits coming from search engines (we don’t want to have boosted traffic from social media since those readers don’t stay long on your site, don’t click on ads, don’t comment and don’t register to any of your RSS feeds).
– Should have at least 500 RSS readers or 1,000 e-mail subscribers (just to make sure you have a community following you).
– Must not be a Page Rank 0. PR0 websites means that Google doesn’t like them. While I don’t give very much weight to PR, I just want to make sure it’s not 0 because I don’t want my blogs to be penalized by the search engine.
– Must be under monetized. I like to find blogs that are under monetized according to my knowledge. It gives me confidence that I will be able to get my investment returns faster than 24 months.
– Must have a strong brand. Look at Financial Samurai, one of the strongest and most well known brands in the personal finance space. It is impossible to replicate the content on Financial Samurai because it is all written from firsthand experience, is authoritative, and is unique. There are plenty of other sites in the personal finance space that have no soul. All their writing is by freelance writers who really don’t know what they are talking about.
Once you’ve identified a blog with all these attributes, you can then try to buy the blog and build your blogging business.
For more info comparing real estate to blogging, check out the link.
How Do You Assess Blog Income?
Before putting a number on a website, I like to look in-depth at the different sources of income. I don’t like blogs that are dependent on just one source of income (commonly Adsense or Text links). A strong blogging business has multiple sources of income.
The more sources of income the less risky the business is. The best source of income is affiliate income because they blend naturally with your content and should be a great fit as well.
Here are some of the main income sources for blogs:
- Adsense, Adthrive, Mediavine (CPC ads)
- Text Link ads
- Banners ads
- Affiliate ads (CPA)
- Your own Products (ebooks, services, paid newsletters, etc.).
- Sponsored posts
The more diversified the sources of income, the more I will be willing to give 24 to 36 months of income (since you can really consider it as a business and not a small sideline).
You can have additional weight if you have been monetizing your blog for several months. If you can show an uptrend for more than six months, you can definitely talk about potential future growth. Blogging businesses are created one compound growth rate at a time.
Learn how to start a blog with Sam’s step-by-step tutorial if interested. It cost Sam $1,500 to start Financial Samurai back in 2009. Today, you can start for under $3/month, it’s nuts!
Other Blog Particulars
There are a few particulars to look at before buying a website. This is more looking towards what you are looking for and what you want to buy as a blog. You can look at the following points before you start shopping:
Niche Content
Do you want to talk about personal finance in general or a specific aspect such as frugality or investments? Obviously, an investment blog will be worth a lot more because advertisers will pay more to show investing products versus coupons.
Popular Blog Posts
I’ve seen some blogs getting 30 to 40% of their traffic from only 2 or 3 articles. You want to make sure that you have several popular articles in Google so you can count on a steady traffic base.
If most of your pages viewed depend on 1 or 2 keywords, chances are that most of your income depends on the very same words. Therefore, it adds to the risk.
Blog Restrictions
Some blogs are very personal and related to its author. While this can be the purpose of a blog, there are some blogs where readers are less attached to its author than others.
While you want to have a strong community, you don’t want it to be too strong either. A lot of readers may leave if you don’t have the same writing style or train of thought of the previous owner.
Some also consider offering a writer’s position to the previous owner to make sure they keep their readership. It’s not a bad idea at first since it gives you the time to “break-in” your new readers.
Does buying/selling blogs constitute a good business model?
I personally believe that there is a huge investment opportunity in the blog management business since we are currently in a very inefficient market.
Blogs are undervalued! Publicly traded companies trading at higher multiples should buy online media properties for lower valuation multiples all day long. Buying earnings accretive businesses is one of the easiest ways to create a blogging business.
Since there are not a lot of buyers and that blog valuation is still complex and a standard method has not yet been determined, there are several gems available for a relatively good price.
Alternatively, you can go the ultra low cost route and build your blogging business by building your own websites. It takes time, but it is highly rewarding.
Start A Website That Makes Money
Sam here. It’s been over 12 years since I started Financial Samurai. Not a day goes by where I’m not thankful for starting my own site.
The income from Financial Samurai is recurring, semi-passive, and extremely rewarding since I really enjoy connecting with other people and helping them with their financial problems. There is no sell, as people come to Financial Samurai on their own.
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. I highly recommend EVERYBODY start their own blog to own their own brand online, find new job and consulting opportunities, express your creativity, and potentially make a lot of money in the process.
See how you can set up a WordPress blog in under 30 minutes with Bluehost. It’s cheap and easy to start. The things we do today set ourselves up for a better tomorrow.
Here’s my step-by-step tutorial guide on how to start your own site like mine in 30 minutes.
Finally, if you’re looking to sell or buy a blog, I recommend going with Quiet Light and Brad Wayland. He is very experienced having built and sold many sites before. I’ve spoken to him multiple times and he has an extensive network to tap. The blogging business is one of the best businesses in the world.
For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience.
Dear mighty samurai!
Thanks for your blog, it was fun reading all about it.
I found a website from a blogger that I would like to consider buying how would I go about it?
Thanks!
Generating profits from blogging isn’t as “easy” as it was in 2010, and I’d never buy a rental property if the cost is over 8 times the yearly revenue, but great info on buying blogs/sites.
I don’t know about that. I find making money blogging to be way easier than ever before now. Give him my platform is grown, or to do is write about a product that I really like that I find useful to the community and maybe 10 times more revenue comes in now.
The key is to build a stronger brand.
See: https://www.financialsamurai.com/how-to-build-a-stronger-brand-for-your-business-blog-and-career/
Sam do you do any SEO at all?
There’s a ton of backend stuff you can do, everything from google analytics to keyword search to setting up metatags etc.
Anything website related everyone seems to emphasise SEO.
Hello, My name is Nicole and I am starting my blog and wanted to reference you in the blog post since your articles have helped me get the courage to give blog writing a go. I am new at this and did not want to step on any toes, so let me know if this is unacceptable. I was trying to figure out how to leave my own comment, but as you can probably tell I am not very tech savvy.
This is great for purchasing and evaluating potential purchases, but once you’ve made the decision to buy a blog how much work do you invest in keeping it up and running?
If you buy a blog with 10k/mo visitors, how many hours per week do you need to spend to maintain that traffic? Is it possible to do while still working a full time job?
What about getting started with blogging altogether? I know literally nothing about the monetization side of things. Should I read up on page ranks, Adsense and Text Links before I get started buying or creating my own blog?
Hi Mike,
I just recently bought the website and would love it if you could stop by and leave me some tips in the comment section!
Thanks!
Randi
Wow–this gives a lot to think about (particularly if you are new to thinking about buying and selling blogs).
Thank you for the write-up!
well,does it effect ? now more bloger write it,but it’s a little doubles
Forest and I both come from the same website flipping background, so we are versed (and experienced) on the topic. I have sold numerous blogs and websites in the last two years, but it wasn’t till this year – that I broke out and sold BIG (traffic and revenue generating) web properties.
Not in the PF niche though. Am working on that now with my new site, but it shall take some before it’s ready.
For those interested in what I have sold, see my profile on Flippa. (you must register to view)
On selling to low? A site I sold back in December 2009 I grossly undersold. And by grossly, I mean several thousand dollars undersold. It’s a long story, but essentially I was in a financial bind and sold in a hurry. Big mistake, as the guy I sold it too turned around and flipped it – four months later for $16,000. It still hurts. Ouch!
But we live and learn.
totally – and many still feel that generating income online can be done overnight, thanks to the one page never ending in length sales pages. it does help to acquire something already established, but it has to be maintained to sustain its benefits. sure, maintenance work isn’t nearly as time consuming as the initial start up, but that is why we pay the premium up front to acquire a ready made money making machine. agree with you – cannot sit back at all to run a business. the key term is “business”. if one doesn’t treat their ventures online as a business, it will definitely reflect in their results.
i second Aleks – some more discussion on where to find them would be good. Flippa and similar sites are a good start, and hearing more on this subject from someone who is close to the subject matter would be great.
another important discussion is how to conduct the due diligence (independently verify what you are being told).
finally – one must not forget the time and effort it takes to grow and maintain a popular/high performing blog or website. if you are going to be running a business, there will be business-like work involved. some information on leveraging assistance, automating systems, etc. would also be good as a supplement.
Sunil, i like that line “if you are going to be running a business, there will be business-like work involved”. That is very very true!
Can’t just sit back and run a business that way!
This post is absolutely awesome, and what I have been have been looking for considering my growing interest in blogging.
One thing I did not find, or perhaps I missed it, is where to find those blogs? Is this done via a brokerarge, or do you put your personal network to use? I found quite a lot of so-called blogs for sale, but often the details are not consistent (e.g. indicated 10k visitors per month, but no Alexa ranking or entry in compete.com). Where do I find serous offers?
Thanks,
Aleks
Sounds like “Sitepoint” is the place where you can find some good ones.
Buying and selling blogs can come out to be a very good business model if someone writes blogs to sell them. Thinking long and hard before buying a blog can be incredibly rewarding personally and can be a business standpoint.
Hey all,
just so know, we just finalized the buying of The Dividend Guy Blog (www.thedividendguyblog.com) and we are hosting a contest to win an iPod Touch along with 2 gift certificates of $50 each at Amazon.
Cheers,
@Mike – Thanks for the info, didn’t realise sitepoint had changed names! Been a while since I went prospecting for websites. Re: Selling, I will do! I can’t imagine ever selling, but you never know.
@ Monevator
if you get 35k visit +, you surely have a good part in SE traffic. this makes your website very interesting… I mean, if you ever think about selling, keep my email in mind ;-)
There are a tons of website selling for almost nothing on flippa (previously sitepoint). but there is also a lot of crap too ;-(
Be careful of finding the real reason why people are selling ;-)
Very interesting article – thanks for sharing. I think it’d pretty hard to sell Monevator, even though I am in the ‘huge’ category according to your classification of more than 35K visits per month (doesn’t feel huge! ;) ). It’s clearly “my” blog, a bit like Sam with FS.
Sam – On Sitepoint, websites are regularly sold for around 10x *monthly* income. Often someone new will come in and say “that’s ridiculous” but they rarely go for much more. I think it’s perhaps something to do with the potential infinite competition of online, compared to real estate say where they’re not making land anymore. As well as the vulnerability to Google rankings…
I feel bad for those only selling for 10X monthly income. Seriously.. why would you ever sell for that low a price? Just wait 10 months, and voila, you got the income! Blog 10 years, and voila! You got 10X that income. Perseverance!
@ Forest,
did you sell blog in the PF niche? how did you value your blogs before selling?
@ Andy,
you can always sell your blog and start another one. have you considered this?
It’s a lot of work but it sometimes worth it considering how much you would receive!
As a pf blogger. love articles like these. Excellent breakdown and makes sense. I received a few offers for my site, but still having fun writing and growing the site. But if I sell, the metrics you have here are definitely something I will keep in mind. This article will definitely be in my weekend roundup.
It’s an interesting subject and I’m definitely signing up for your newsletter to learn more! Thanks for sharing.
I really enjoyed this post, since I’ve always wondered how blogs were truly valued by people looking to buy them. I do think a lot of sites are highly under-monetized, so you probably have a lot to pick from :)
hum…. I just love under-monetized blog :-DDDD
Interesting article. It’s amazing how much the internet has transformed our lives. I’m glad the internet didn’t exist when I was a kid cuz I would have been glued to a computer instead of running around outside, but it’s such a powerful, and profitable creation. What an interesting business to buy blogs! Thanks for sharing
really great write up indeed! I hope to one day reach the 10k visitors a month, that would literally be a dream come true for me. I’m not so much into the blog buying business as the blog building business:)
Very interesting read though, I never even knew there was a market for buying blogs!
Cool article; at a high level, if I could pick up a new blog with 10K views/month for a couple grand, I’d definitely think about it. It’s nice to build your own blog, but being able to snag a new one to diversify with new RSS, new incoming search term traffic, etc. and then optimize the monetization is a sweet business model.
Question though – for us technically illiterate – how difficult is the technical aspect of buying a blog? i.e. I’ve used escrow.com before so I understand the financial end, but how about transferring files, getting the domain transferred, database, etc, getting the blog to show up under your host, etc.? Is there a simple step by step process out there? I’d be afraid I bought a blog and couldn’t get it to work LOL!
Hey Darwin’s
it is actually not that complicated, you start by transfering the domain over to your server and then, you transfer the database. My partner is the techny guy in our team and takes care of this part. the site is usually transfered within a week or so ;-)
I very much enjoyed your article. In the past I have considered starting a website appraisal business to professionalize the quality of website appraisal. There are many people out there conducting appraisals, but not with the same level of scrutiny demanded by investors. Such a business if conducted with the same standards as an office tower appraisal would legitimize a websites cash flow and potentially open the door to securitized borrowing, ie mortgages/debt.
I am a commercial real estate appraiser and appreciated your valuation method using an income multiplier; however, I prefer the cap approach to viewing income streams. This is essentially just the reciprocal of the multiplier, but for me it provides more information. A cap approach simple gives you a great measure of risk to compare similar investments.
For example, looking at sales of office buildings within a city and pairing with leases to estimate a true market NOI, you can determine capitalization rates that could be used to support a value estimate of a similar office property withing that city. You then estimate the NOI using the actual leases in the building paired with new deals done in similar spaces to estimate the market lease values. Take that NOI estimate and divide by your cap. Wala, there is an accurate estimate value.
The cap is essentially a measure of risk. In Vancouver you might see a 40 sty office tower trade for a 6.5% to 7% cap today. If you could get a mortgage for less than 6.5% to 7% than you can lever up that return.
I think what might be missing from your analysis of a website is exactly how much maintenance is required? Do you need to post articles of are they self populating like a forum? You must put a value on your time to maintain the same income stream from the site or increased income stream from the site.
As more and more people become involved in flipping websites this will become a greater concern.
Stuart, that’s some great analysis and feedback, and hopefully Mike can respond and share his thoughts as well.
Cap rates are a sensible way to go to compare it to borrowing costs at the very least.
It would be fun to aggregate all this data (Alexa, PR, Compscore, etc) and come up with a real value. I’m seen some around, but they all look off. Another variable is brand value.
But do cap rates work? If there is a 4% cap rate on a $12,000 annual income stream, does that mean the blog is worth $300,000 (12,000 / 0.04)? If so, SOLD TO YOU b/c running a blog is hard work, but in real estate, you get to do nothing for long periods of time.
Hence, perhaps a proper cap rate is closer to 10% or $120,000 in this case.
Cheers,
Sam
Not sure the cap approach for blogs for 2 reasons:
#1 the market is inneficient (this is why you can get so many great deals!) and there are not enough buyers to pay the “real” price for a blog. the other part is that you would need to assess a value to the hours you spend on your blog (if you want to value it as a real company) in order to get the real profit out of it…
#2 it’s hard to allow a value on date when they doesn’t necessarily means something (i.e. I don’t have a huge Alexa ranking but I do have a lot of traffic (more than several blogs with a higher Alexa rank than mine). What will make you more money, Alexa rank, PR or actual people lending on your site everyday?
Just to add to Mike’s comment. Future blog income is an unknown.
If you buy a condo in a building, you can probably find out what similar units are renting for and base your calculations on that data.
When you buy a blog that make $1,000/month. That income could double within a year or it could drop to $500/month.
This is actually an argument against using income as a valuation factor for smaller blogs.
That’s a good point. Income could go down… which a buyer may not think about given a usual belief we are always better. But, if you buy cheap and low enough… i.e it’s only making $50-100 a day, and you pay $1,500, that is one low low hurdle to overcome.
I’d love to look at sites which have strong brand names. A name such as Mashable is very memorable, but of course, it’s b/c it’s already famous, or is it.
” i.e it’s only making $50-100 a day, and you pay $1,500, that is one low low hurdle to overcome.”
If you can find a blog that is making $18,000 to $36,000 per year and only costs $1,500 then I suggest you buy it very,very quickly.
:)
Sorry, mean $50-100 a MONTH!
@admin
The valuations are 2x gross revenue – not earnings (or profit).
If you factor in the time necessary to run the blog then someone like Mike HAS to be able to a) increase the revenues and b) outsource efficiently
Not easy.
Mike, as a blogger myself, I know that operating profit margins are huge! You’ve got your start up cost of design etc, and then your monthly variable cost of hosting. Hosting costs as little as $20/month, and you don’t even have to pay for an original design.
In blogging, revenue is close to earnings in other words, and given the costs are fixed, margins expand enormously the more you earn.
I don’t think blogging is easy at all, but it is certainly doable as evidenced by the thousands of bloggers out there who do make a living from their blogs.
Sam, you are correct that pretty much all revenue will end up in your pocket which feels like profit.
However, that is true only if you value your time at zero dollars per hour.
It’s one thing to not worry about my time for one blog (because I love it) but if I’m getting into the business of buying other blogs (for fun and profit) then I have to account for my time.
Indeed, good point, which is why after a month of blogging, I decided not to focus on blogging for money. That’s why you don’t see any affiliate posts, or stuff on my site. They kinda bum me out to write those articles for profit. What I should do is hire someone who only writes these type of soulless articles, and do a revenue share model or something. It might help!
Why did you change your blog’s name from Four Pillars to Money Smarts? Did you buy any blogs like the OP, or did you greenfield all of them?
“Soulless article”. Lol – that’s a great description!
I changed the name, mainly because I was worried that the “.ca” was scaring off a few American search engine visitors which costs me money.
MoneySmartsBlog.com is bland domain, but it describes the blog perfectly in terms of what type of content a visitor might expect to find.
IC. Do you find that since changing Four Pillars name, it has helped traffic?
If there is an expert writer of soulless articles out there, let’s talk!
Sorry – forgot to answer your other question.
I started MSB and ABCsOfInvesting.net on my own. I purchased blogthority.com.
I had considered a strategy of buying blogs but decided against it.
I haven’t noticed any change in traffic.
I didn’t expect I would be able to measure the difference since it’s probably only a small percentage of people (ie 5%) who weren’t clicking on the old url on the SERPs.
Mike,
I’ve noticed a lot of the big blogs, such as Mashable, Tech Crunch, and Gizmodo off the top of my head all use the two column layout. Do you think that is just a coincidence, or telling that two columns may be advantegeous?
Why do you think Bloggers would sell their blogs at such low valutaions/multiples? If I can buy a business at 2X earnings I’m ALL over that if growth is even just in the high teens or steady!
Perhaps it’s bc sellers are not as well informed, or are simple much too burned out to keep their blog going? If this is the case, one should buy blogs who have an extremely burnt out writer/owner, perhaps in a lot of debt, so they can sell for cheap?
Best,
Sam
Great post, Mike.
@ Sam, “Why do you think Bloggers would sell their blogs at such low valutaions/multiples? If I can buy a business at 2X earnings I’m ALL over that if growth is even just in the high teens or steady!”
There are lots of reasons, some people may be uninformed, and some people may just be looking at cashing in if their interests change.
I also know some people who are strong writers, but never figured out the promotional, technical, or monetization aspects of running a website. If someone offers them a solid up front payment for their site, and a steady writing gig afterward, it could be the best of both worlds for the selling side, and the buying side. :)
Sam, there are many businesses (like mine) that sell at only 1 x yearly earnings. Depends upon the sector.
I donno man, sounds like sellers are selling themselves short at only 1X earnings. Your business doesn’t seem that arduous to run, does it? Or is it simply the longevity of the stream of cash flows which is in question b/c there is so much competition?
competition amount is the issue.
I think people are giving up too easily if they sell their business for 2X earnings. Their earnings are likely depressed, and frankly, the real value could be only selling for 1X earnings, which is an absolute steal for the buyer!
But true, a lot of people change directions. And if they are dangled some money in front of them, I guess why not.
@ Sam,
You might be right, I would have to try 2 columns one day ;-). those guys are definitely make more money than me ! hahaha!
I’d say that the appeal of a lump sum money + being tired of writing everyday would probably the most common reason why people are selling so low. Plus, there are not many buyers out there. So when you have a decent offer, you better think twice if you know that you don’t want to keep writing all the time ;-)
@ Ryan,
I agree with you, there are many people who are much stronger writers than I am. But managing a blog is not only about writing. Coding, Monetization, Promotion are other fields that you need to master if you want a successful blog!
This is the thing though. Why do people insist on writing everyday if they don’t have any audience? Part of the Yakezie challenge is to only write 2-4 X a week. I think that’s good enough. Use the “off days” to build relationships, interact with your readers, or whatever. Let one’s posts percolate!
Doesn’t make sense to start a blog if you don’t like to write!
Thanks for this very useful article. I have no intention of buying blogs (or selling mine!), but it did get me thinking about what I need to do on my own blog. For instance, Google likes me, but only really likes a couple of articles I’ve written. I either need to focus more on that topic, or spin it off into another blog (ugh! I don’t think I have the time for that ;)!)
Thanks for your reply, Mike!
Because I went to school for financial planning and will become a CFP this year, I have no shortage of ideas. But I think that same training makes it more difficult for me to become inspired with interesting ways to present those ideas. The other problem I run into is exhaustion. After writing about 2,000 words in a day, my brain refuses to cooperate any more. I’m not sure if this is just the way I’m wired, or if it’s because I’m not destined to be a writer. :)
How do you decide on the $ range for your staff writers? Is it by word count only, or a mix of word count and quality?
Great “behind the scenes” information Mike. I’d suggest you could write something like this for Blogthority – but of course, then nobody would read it. :)
Mike
@ Different Mike
You are hilarious ;-) I actually really like your lengthy articles at Blogthority. The blog will fly eventually :-)
@Paul,
I pay per posts with minimum requirements (i.e. minimum number of words, defined topics, etc.). I negotiate with writers and see if they are not too hungry ;-)
@Not made of money
I suggest you process your transfer through Escrow.com. They hold the money in a trust account while you are selling your blog. Therefore, you won’t get fooled by the buyers!
Thanks for the very informative article. I’ve also been approached a few times about my site but was skeptical that the potential buyers were legit. I really appreciate the info on valuation too, as that has been a question I’ve had.
Thank you for this article, I appreciate you sharing your experience and insight. I got a lot out of this.
Facinating post! I have a buddy that buys rental real estate and I’ve always been tempted to try and compete with him, blog revenue vs real estate rental revenue.
Thanks for demonstrating how your company values blogs! After reading your information, it makes sense!
Very interesting and useful article, Mike! Thanks for having him share this, Sam.
Mike, I’ve been wondering about staff writers. I would imagine that buying several blogs could be very demanding if you try to do all the writing yourself. What’s your process for hiring staff writers, and what are the usual compensation structures/payouts?
I’ve noticed more and more blogs going this route (main writer with staff writers), but I’m still clueless as to the how and how much. Thanks for being so responsive in the comments!
“When you value a website, you will most likely pay 18 to 24 times the monthly income.” If that’s accurate, Damn! Much better than my web hosting biz which is only 12-14 monthly income. It’s much more effective to keep my biz, than sell it, and treat it like a bond.
@Investor Junkie,
The calculation values are very low in the online business. I rather treat my blogs as investments too!
@Paul,
I was born with the great gift of inspiration so I am able to write a lot of articles without much effort. However, at the point we are in our business, we hired a few writers. Let me tell you, finding good writers are pretty hard!
I was lucky enough to get a hold of existing bloggers who were looking for additional income. I think it’s the best way to do it. My plan B would be to find communication students or finance students ;-)
The range can go from $5 to $35. I think that once you have reach the $20 per article, you get some pretty good stuff!
@ Evan,
What do you mean by partnership? since I already have my partner, we tend to work together and simply buy blogs. Let me know if you have an idea in mind and drop me an email ;-) thefinancialblogger (at) gmail (dot) com
Hi Mike,
Thanks for your GP! I’ll be asking you a series of questions throughout the next couple days. So my first question is on your thoughts of blog design and layout. How important do you think a blog’s design and layout is to users coming back? We’d probably agree that content is most important, but can a great design make a difference between success and failure with a blog? How would you quantify a blog’s design and layout importance?
What is your opinion on having two main columns and blogs with a small column on the left, main column in the middle, and another small column on the right for aesthetics and revenue maximization?
Thnx, Sam
REALLY COOL POST! I get approached all the time to sell (much more recently), but the amount I am asking for is insane using your calculations.
Do you find this happens often? I know why I value it so high, it is because I love doing it and I know I am undermonetized.
Would you ever take on a partnership? or are you only in the business of owning and controlling?
Hi Mike,
I would love to see a post such as this one disucssing monetization, ad placement and ad types for maximizing revenue.
What kind of ads (textlinks/banner/adsense/affiliates) generate the biggest percentage in terms of revenue?
@Jeff,
I think that text links are very profitable and you should consider them in your blogging business model. However, since there is a constant fear around whether you will get downgraded in term of authority from SE makes me say that you should not earn more than 30% of your income in text links.
@Kevin,
It’s normal that you start with a PR0. There are major Google updates once in a while and your blog will probably part of the next wave. Not much to do in the meantime beside concentrating on promoting your websites (through comments, guest posts, carnival submissions, forums, etc.).
Try to get as many links as possible and your PR will grow eventually. Selling links in the meantime would be a bad idea since you won’t get much money for them and you might get downgraded by SE before getting a PR.
At the beginning, don’t focus on making money. You won’t make much and waste a lot of energy trying to make money out of a blog if you have no PR and traffic below 5,000 visits per month. Focus on promoting your blogs and adding high quality content and the money will follow :-)
@Mich,
You will actually find this kind of information in my newsletter (the box to sign up is at the end of this article or on my main site : http://www.thefinancialblogger.com.
While text links is the easiest solution to make money, I believe that affiliates and adsense are more sustainable over the long run.
@ Sam,
thx again for the opportunity!
I actually think that design is very important. The first thing we do with all the blogs we buy is to pay for a new and unique design. You may be the best guy ever, if you go on a date with a sloppy t-shirt and a dirty pair of jeans, you won’t impress anybody. This is the same thing with a blog. Great content with great design is the key ;-)
I prefer a 3 column layout as it gives you more space to add ads and banners ;-) so far, it is working fine this way but we will definitely try a 2 column layout later on this year with another of our website!
So my first goalpost will be getting to at least 5000 uniques a month, all while continuing my focus on the content and promotion. Hopefully Google decides to include my site in their next update and assign me some page rank!
Thanks for the feedback, Mike!
It’s just a matter of time (3-5 months) before you get a page rank greater than 0. Not to worry! Just stay consistent and you’ll be there before you know it.
Mike, thanks for this advice on growing your blog. It’s basic stuff I’ve heard before, but I guess I just need constant reminders!
This was a really enjoyable article. I’ve heard the website pages as real estate investing before (and Sam did a write-up on the biggest payouts).
Interesting as my own site has grown, so has the dynamics of website management. Appreciate the breakdown of valuation and will definitely be checking out your other articles Mike.
Great work, This is definitely an interesting article. I didnt know much about buying/selling and or valuing blogs before.
I also second daniels question. I only have text links on my blog (for now) and am interested in getting more advertising dollars coming in. Are text links part of an overall picture, or are they not worth it when traffic grows?
It’s always interesting to get a look “behind the scenes” and see how others are doing. Mike, my blog is pretty new and still has a page rank of 0; do you think it is because Google does not like me? I have not sold any text links, so I am not sure why they wouldn’t.
What would you recommend as a monetization path for a young blog, such as mine?
@ Daniel,
I think that selling text links is a good source of income but it can affect your PR and therefore, your search engine traffic. Be careful of fulling your site with text links, this is definitely bad.
My suggestion is to determine a number of text link that you feel reasonable. Once your maximum is reached, it is time to increase your price and wait until one of your advertiser drop their link to replace it with a “better” link ;-)
Awesome article, I think you showed how it’s not as risky of an investment as most people think.
Do you think selling text links is a viable way to make money in the long-term? Or is it just a vehicle to get you by until readership grows enough so that you can make money in other ways?
Hey Jeff,
you actually don’t need much money to starting buying websites. We bought http://www.intelligentspeculator.net for less than $3,000 and it now earns more than $700 per month!
there are several smaller website that you can buy for $1000 to $3000. They won’t fit in the buying model I have mentioned in my article but this is how we started. Gotta start somewhere, right?
Where did you buy the book from?
@ Jeff,
Thx for the good words ;-)
We actually bought our first website for $1,200 and it was generating about $100 per month. As you can see, you might not need a huge amount to start buying blogs. It is what you do with them after that will determine if you have made a good investment ;-).
Hey Mike, great job. I especially appreciate the etails on how you assess a blog’s value. Would the same rule of thumb work for a static site monetized with AdSense and/or affiliate links?
Great write up Mike. I love the idea of buying up blogs. Although I’m not in a place to do it right now. I did however buy up a couple big name .co domains yesterday so we’ll see what I can do with those :-)