oddsod - 2:56 pm on Sep 1, 2009 (gmt 0)

I suppose, like anything else, you got to have passion in the subjects you build sites around.

I hear this a lot and I disagree.

I buy sites, I'm a recognised expert in the field. I live the Internet lifestyle working minimal hours a week because I earn more than a fair return from the many "web property investments" I have. I won't tell you what I've spent my money on but I will say I'm very happy with my financial situation.

I look for a good business model, I analyse the earnings, the site's strengths and the risks relative to the asking price (I've written on the valuation of websites elsewhere and can find it if you dig around a bit [webmasterworld.com]). And then I buy it. I find someone who has an interest in the subject and assign them to do specific tasks on the site. And I move on to the next acquisition.

If you treat it as a business, then passion for the subject shouldn't come into it. If you're doing it as a hobby/to make a bit of pocket money/learn the ropes ... then passion is great. Otherwise the business merits need to overweigh your interest in the niche.

Passion for business, however, is a definite plus. The numerous business models - how people make money online - facinate me. I've written on it, I've spoken on it, I've dabbled with everything from proxies to product sales to communities to the passive Adsense model on evergreen content sites. And it's great fun.

I've now been able to focus on those businesses which make the least demands on me. No more product shipping, customer services, taking phone calls, sending regular newsletters or writing a blog post everyday.

So had you held them and grown them into full fledged monetized properties, not only could you have potentially have made 4x during the same time frame you could sell them for much more in the current market.

There's a flaw in that argument. I know that IncrediBILL has often suggested that selling a profitable site is not a good idea. I disagree. You need to see if there's a business case for selling; if sellling fits your strategic plans. For every single revenue generating site I own I'm happy to sell if an offer comes in at even 20-30% over normal market rates (rates at which similar sites are selling for in the various forums I monitor). The business case is simple: If I own a site that's would attract max bids of $100,000 in the market and someone offers me $120,000 then it makes sense to sell that site, pocket $20K and buy another site to replace the first one using the remaining $100K. I'm $20K better off than if I did nothing. Of course, this relies on a mature market, lots of sites coming up for sale, a free flow of sites etc. In certain price ranges that's very much the case. A good understanding of the mechanics - from valuation to due diligence to risk assessment - doesn't hurt either.