Forum Moderators: martinibuster
There is a site related to my topic I am thinking about making an offer on, as they are not doing a very good job of catering to the average music fan at all, but rather they are focused on the actual artists in a certain region while claiming to be the NATIONS #1 site on the topic.
It is a music related site, with a small online store offering niche products, and selling adspace per month ranging from $50-$250. I'm sure they make $500-100 most months from this, but they do not add new content very often and they do not monetize with adsense.
175,000 uniques monthly
Fairly active forum with 7000+ users.
45,000+ mailing list
Have not approached owner about selling, and am not sure he is interested.
I am very confident that I could develop this site into a much larger site, and double or triple traffic within the first year. But am looking for advice on how to approach the owner. I have spoke to him via email before regarding advertising and other issues, so getting in touch is easy, but what is a reasonable offer and when is it smarter to just create a new site from scratch? Buying would give me a big head start on this type of site, as well as give me access to alot of contacts that I can use to build the site even faster.
Hopefully this can spark a conversation on the issue and I'll be able to get some valuable thoughts that will help me in my course of action.
Greg
I think this thread might be moved, but good luck.
Buying would give me a big head start on this type of site, as well as give me access to alot of contacts that I can use to build the site even faster.
That would be an excellent starting point.
But, there is much to be done when purchasing an existing website. It's like your daughter's first date. You know, you run a background check. You talk to the parents. The same holds true for an existing website.
If you've followed the progress of the site that closely, then I'll assume you are familiar with it's history? If the owner is willing to sell it to you at a reasonable price, go for it! You'll be that much further ahead.
But then, there is another factor at play here. Changes to the site, changes to the Registrant information along with other things may have an impact. It could be good, or it could be bad. I've never gone through this particular process.
Hearing from you in 6 months time about the success of your purchase would be great! ;)
Wouldn't mind more weighing in on this though... Is there any reason why I wouldn't want to buy this type of site for $5-8k?
steve
I probably should - but I'm so busy with my own site at the moment, I don't have time to act on it - but I'm pretty sure there are some great opportunities out there right now.
I bought a few small sites for 12 months AdSense income a few months ago, and did nothing to them - just changed the AdSense code, paid the domains and hosting and let them be. As a group they're on track to pay back in just over a year. Which is a great investment by any standards...
But I think it's good to spread the risk - some have performed well - and some badly - as an average they're fine - but if I'd bought just one, and picked the wrong one, I'd be kicking myself.
It is my understanding that music sites do not have an extremely high ECPM with Adsense. However, depending on the actual niche and content, ECPM doesn't need to be very bad. Let us assume Adsense ECPM for this site would be $5 (just guessing here).
In that case the current 175.000 uniques a month could produce $875 monthly. There have been threads before about what an established Adsense site would be worth. The trouble with Adsense is the rather hazy risks that are involved. You don't have any idea about the site/owner "Adsense history". IOW, there is no way to find out if the site/owner is not somehow related to a banned Adsense account. The only way to find out is to buy the site and put Adsense on it. Because of this risk I think 6 months of Adsense earnings would be a reasonable price for an established site. So in this case, that would be about $5.000. Now this site also has a large mailing list. But up to now it is not allowed to put Adsense ads in e-mails. Then there is the forum with 7.000 users. Adsense works very poor with forums so that will not add up to your Adsense earnings. But both the forum and the mailing list are worth cash, you just need to monetize them in another way. The problem is that in the online business world there are many more risks than just the risk of being connected to a banned Adsense account. The site/owner could have a bad reputation otherwise wich will damage business. A search engine algo update could destroy your SERP's. Your niche could become less popular. A competitor could whipe you out overnight (not rare in the world of online business). Major revenue programs like YPN, Adsense or Adcenter could change their policies in a way that you are disabled to make money from them, etcetera. Considering all these risks, lets assume forum members and newsletter subcribers are worth 10 cent each (again, just a wild guess). That would mean you have to pay another $5.000 for the forum and the newsletter. So combined, in this model, the project should be worth $10.000.
Nice round number, so a bit of a s@xy offer;-)
Anyone else prepared to do some numbers?
Buying a non-monitised website is a bit like investing in Junk Bonds or, better yet, stocks of distressed companies in hopes of a turnaround; something Warren Buffet did very well at.
Paying 12 months revenue is equivalent to a price/earnings ratio of 1. Even deep-discount value stocks usually go for p/e's of 3-5. Not bad.
Book value could be calculated by the number of content pages. Say the site has 100 pages of unique content. If you had to liquidate the site, the content and domain are probably the only tangible assets. So assigning a value of $10/page, gives book value of $1000, for a price to book ratio of 5 at $5000.
Then again, during the techbubbledotcom heydays, IPOs were being priced on what the venture capitol guys were calling 'eyeballs' (traffic stats), and look where that got (most of) them.
If you are involved in music websites, I'd love to hear your experiences with adsense via stickymail.
I am not much involved in music websites except that i have legal country targeted MP3s
By the way Google doesnt permit Adsense code to be placed on MP3 pages
