After two years: another look at my website investment

Back in July 2011 I published a controversial opinion here on Ghacks stating that I consider website investments, that is the buying and selling of websites more profitable than stock mark investments. I followed up about six month later looking back at a particular investment that I made in that year and everything looked fine at that time. Today, I'd like to share some insights on how things went from there.

If you are a webmaster you probable know that things went down south starting in 2011 in regards to Google and its search engine. While your sites may not have been affected by Google's Panda or Penguin algorithms, many sites were caught in the crossfire including respected authority sites such as Freeware Genius and yours truly Ghacks. Google in addition to that made many changes to the results pages as well, pushing out even more Google properties into the results, experimenting with five, six or seven results instead of ten, or pushing out more ads on to the pages.

This all resulted in a decline of traffic for many webmasters and I'm afraid to say that the site I bought was caught in the crossfire as well. So, earnings tanked in early 2012 dropping from thousands of Dollars per month to about $500 or so. That's still great but nowhere near what I expected the site to make in 2012.

I first started to work on the site on my own, optimize its contents, reduce loading times, remove unnecessary elements and so on in hopes that it would be enough to get it all sorted out. Turns out it was not that easy and I decided to hire professional help in the form of a SEO company. I paid the company $399 per month to bring the site back on track which eat up most of the earnings of the site but was still less than major SEO marketers and company charge for (which usually begins in the four digit realm and can quickly grow to five digits).

The optimizations were purely whitehat to get the site into a better standing with the search engines. We did not make many changes on the site itself though but some where made.

It took nearly a year, until November 2011 when I started to notice that things were picking up again. Earnings moved up to $1000 in December 2012 and January 2013, to $2000 in February and March.  So, things are looking up again and I'm excited to see the site perform this well again. If things continue along this route, I'm going to sell it this year to make the profit that I hoped I'd make last year. Still, profits of about $12,000 from a $23,000 investment is not that bad even if I consider the time I spend working on the site.

I'd like to take this opportunity to post a couple of website buying tips. Things have changed quite a bit thanks in those two years.

• Sites with multiple traffic sources are preferable over websites that rely on a single traffic source (e.g. 50% Google, 30% Bing, 20% Social and direct traffic).
• You need to analyze the backlinks of websites you plan to buy. Google's Penguin algorithm may decrease search engine rankings for websites that do not play by Google's Webmaster Guideline rules. It in particular looks at link schemes but also at duplicate content, cloaking and other techniques to increase a site's ranking or exposure. If you can't or do not want to do that on your own, try a service like this one. It may cost you but it is better you spend a couple of hundreds of Dollars getting a thorough analysis than buying a site that may be pushed back at any time because of the techniques used by the webmaster or owner selling it.
• You need a backup plan. If you are not a search engine marketer you need to have someone in your contacts who can help you out when disaster strikes. Say you just paid $50,000 or so for a great website and it tanks a month or two after you bought it. You do need to get it back on track and if you cannot do it yourself, you need to hire someone who can. This may mean that you will have to make additional monthly payments until the issues are resolved. To make matters worse, there is no guarantee that this is ever going to happen.

Looking back I have to admit that I was lucky that I found a capable SEO company that brought the site back on track. While I did analyze the website in detail before I made the acquisition. I was caught by surprise when Google started to roll out the changes to its search engine. This can happen to anyone at any time, and even a thorough analysis won't bring you 100% certainty that a site won't be pushed down by one of the updates.

I still believe that website investments are more profitable than stock market investments though, but the time you spend evaluating sites has increased in the last two years.

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