After two years: another look at my website investment - gHacks Tech News

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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    Comments

    1. rob said on March 31, 2013 at 5:59 am
      Reply

      i like ghacks for many reasons but in this day and age i especially appreciate that you avoid any and all political commentary and you don’t get distracted into posting nonsense that the once-great lifehacker has devolved into doing (like: “When It’s Actually Best to Cook a Frozen Pizza in the Microwave”). that rubbish and kitten videos is what the rest of the internet is for.

      anyone can be mediocre, always do what you do best and keep trying to be better. your results speak for themselves.

      1. Martin Brinkmann said on March 31, 2013 at 6:42 am
        Reply

        Thanks for the compliment Rob. I agree that one should stick to one’s strengths. I actually stopped reading Lifehacker some time ago and summed up why I did so here in this article from 2011: https://www.ghacks.net/2011/05/03/quo-vadis-lifehacker/

      2. Tim said on March 31, 2013 at 8:33 am
        Reply

        Yeah, I agree. I still visit quite a lot of tech websites, but just find myself skimming most of their articles. The only two sites that I really genuinely like are this site and Ars.

    2. Super Man said on March 31, 2013 at 9:00 am
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      “Why Website Investments Are Better Than Stock Market Investments”
      I do not agree with this for several reasons.
      Let me state first I am mostly speaking about 401k investment.

      1) 401k reduces your tax base
      2) Your company contributions (free money)
      3) The choices you can make in what to invest in.

      Note: yes you do have to go through downtime there is no getting around this.

      I learned a long time ago “never work hard for your money let your money work hard for you”. The reason I said this is based on the work you were doing trying to right the ship so to speak.

      But let me say I truly love your website I have learned a lot from it and will continue to do so.

    3. kalmly said on March 31, 2013 at 9:27 am
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      Even though I have no plans to ever purchase a website, I enjoyed the article, and I’m very glad you managed to come out of it lightly scathed. Glad that you survived the near disaster. It brings me back to this: The power Google has over the internet is very disturbing.

    4. sekoasa said on March 31, 2013 at 9:47 am
      Reply

      Speaking of investments…Will you publish your choices of hardware for those of us who plan on upgrading our DIY systems [motherboards, CPUs and GPUs] as you did a couple of years ago? Thanks

      1. Martin Brinkmann said on March 31, 2013 at 11:30 am
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        I usually only do that when I buy new hardware but sure, I can add that to my to-do list.

    5. DanTe said on March 31, 2013 at 9:56 am
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      Just curious since I’m not a webmaster. What SEO did you use? And do they do business in the U.S.?

      1. Martin Brinkmann said on March 31, 2013 at 11:23 am
        Reply

        I hired a company in the US so yes, they do business there.

    6. jothe s said on March 31, 2013 at 10:50 am
      Reply

      I would love to know what SEO company you used as well, as our main site and earnings were obliterated during penguin and have never returned despite massive link cleanup efforts, social media campaigns and plenty of useful content addition.

    7. Akshay said on March 31, 2013 at 11:53 am
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      Well By selling you mean revenue ?
      or you bayed domains & sold them?
      BTW love the site
      Loads fast
      No-Js nonsense
      No HD logo on every story
      to the point
      BTW
      Do you guys accept donations?
      Cannot see the contribute button

    8. Madhav Tripathi said on March 31, 2013 at 12:49 pm
      Reply

      It’s true, website selling has very high return but if once it starts facing Google updates like Panda and penguin it crashes the whole idea.

      1. Martin Brinkmann said on March 31, 2013 at 1:19 pm
        Reply

        That’s why it is so important to analyze thoroughly. While you will never get a 100& guarantee that you won’t run into a brick wall, the analysis makes it a lot less likely that you do.

    9. Ken Saunders said on March 31, 2013 at 7:03 pm
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      Well, I am happy for your success. Aside from monetary profit, you’ve definitely gained some priceless knowledge and experience.

      I personally have never spent any money on SEO and quite honestly not a whole lot of time worrying about SEO and my sites have ranked well and traffic is as good as expected for the content provided. I’ve just tried to follow the rules as best as I can.

      I think that what has really worked for me though is 1) providing content that no one else is or few others are, and 2) providing content that I know that people will search for. So niche content is a good idea, and sticking with a few unique things is also, or, doing a few things really well and better than others.
      I think that you do that here. While you do cover a fair range of things, your browser coverage is the absolute best. I’m not personally and massively into mobile news (except for Firefox O.S.), but I think that you could or should expand on that a bit, but that is a -very- competitive topic.

      One difference, a big one, for me is that my sites are not-for-profit. I suppose that things might be more difficult if I tried to monetize them.

    10. Ken Saunders said on March 31, 2013 at 7:08 pm
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      “Firefox O.S.”

      *Firefox OS, and yes, Lifehacker sucks now, I avoid it. ZDNet I don’t even bother with, and CNET is on a very thin string with me.
      This is my favorite, and go-to tech news site.

    11. koko said on March 31, 2013 at 10:24 pm
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      Just wanted to say your articles are a pleasure to read. Balanced, no superfluous words and meaningful content (no matter how big or small the topic is). I hardly check lifehacker anymore, nor any of the other tech sites.

      Whatever you’re doing.. Keep it up!

      1. Martin Brinkmann said on April 1, 2013 at 3:37 am
        Reply

        Thanks koko, I will.

    12. nirmaltv said on April 2, 2013 at 2:31 am
      Reply

      Hi Martin,

      How can I contact you? Wanted to know something more detailed on this post. I dropped in an email via contact form, please do have a look.

      Thanks
      Nirmal

    13. RubberMan said on August 15, 2013 at 12:39 pm
      Reply

      MMmm , I am dubious about the SEO company – how can you be sure things would not have picked up anyway without them?

    14. jual kaos online said on September 1, 2014 at 7:28 pm
      Reply

      Whenever I open firefox, it instantly crashes. I’ve tried opening it in safe mode and still it doesn’t work. I even tried changing my homepage. When my friends give me a link in my msn messenger, it opens up firefox and it works fine, I’m able to browse the internet normally. What do I do? I already uninstalled and reinstalled it..

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