bobangus.com » business models

Prime Angus Filets: Links this Week 2-1-2008

Bob Angus — Fri, 01 Feb 2008 15:34:36 +0000

Demo 08 was held this week in Palm Desert, CA. For those that do not know about DEMO, it is the high powered gathering where startups can demo to venture capitalists, press, and other influential technology elite.

Since my fortunes are used for mundane things like a mortgage and not angel funding, I simply watched the demonstrations online. Here are some of the companies that I will be doing further research on or using this year:

MOLI – Moli provides a powerful social networking platform that allows you to present yourself in different ways to different people. Namely, you can have your business side completely separate from your 4am debaucheries, “OMG, I can’t believe I did that” side.

Seesmic – Any TechCrunch fanboy knows that Michael Arrington loves Seesmic. They offer video communication and community with a Twitter approach. I am going to have clean up my office if my videocam is going to come out of storage.

Review2Buy – Have you ever been about to buy something at a retail store and wished you had access to your favorite shopping comparison site or coupon/deals site? Am I overpaying? Is this model the one that will breakdown after a week? Review2Buy answers those questions.

atlaspost.com – atlaspost enhances blogs by adding the elements of a geography-based social network. Bloggers can geo-tag their posts and can identify readers and content with common locations… and likely common interests and experiences.

VisibleMeasures – As Web video ads gain momentum, tools to manage and measure video advertising are in demand. Believe it or not, measurement remains a difficult sell for technology vendors to the advertising industry. The old world brand marketing, big agency and media buy approach still rules the budget. The focus is on frequency and reach metrics and not sales. I hope this helps to finally break that down.

StandoutJobs - There are many sites that help the job seeker network and promote themselves in a social network. StandoutJobs targets the companies that are recruiting and provides the latest social media tools necessary to attract the right hires.

There are many, many more exceptional small companies from DEMO this year and previous years that you should check out. I highly recommend bookmarking DEMO to keep in the loop on emerging markets and technologies.

Image of the Week

Concept art by Tyler West for Electronic Arts’ Godfather video game. For more incredible video game concept art, see the annual collections from IntoThePixel.com.

Check out other pictures and images on my Flickr photos.

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Buying a blog is different than buying a website

Bob Angus — Thu, 20 Dec 2007 01:27:23 +0000

Earlier this year, I did a post on Flipping Website Real Estate for Profit. The market for buying and selling websites is even hotter today. The Sitepoint marketplace and Digital Point marketplace are flowing with buyers and sellers. Buying a website, building it up, and selling it for more is a business model that works. However, I am seeing more pure blogs in the mix. If you are thinking about buying a blog, be careful. The metrics you use and value that you place on them must be different than a standard website.

Hot Topic

I have read three poignant posts this week that have led me to write this post.

Devlounge – The Dangers of Buying a Blog: David gets right to the point – expect to lose approximately 33% of the current traffic right away. Unique visitors are not eyeballs, they are readers. You have to value why those readers are visiting the site and if that readership can be maintained.

Portfolio.com – What’s Drudge Worth? – by way of ProBlogger.Net: Duff estimates that The Drudge Report should be valued between $10-20 million based on eyeballs, ad sales, and his mom’s opinion. However, he goes on to say that it is worth zilch if you cannot lock Matt Drudge into a long-term writing contract. I could not agree more.

Dosh Dosh – Building an Online Empire: Of the 16 website types Maki mentions that you can buy/sell, none of them were a pure blog. He lists a product review blog, but that type of site is more dependent on the product than the author.

There are many more helpful articles if you do a Google search. Or I also recommend reading related forum posts on WickedFire, Sitepoint or Digital Point.

The Metrics

Before buying a blog or any website, you need to know the following metrics:

Unique visits per month
Page views per month
Feed subscriptions
Posts per month
Monthly Revenue
Google PageRank
Alexa rank
Date established

Of course, you should ask for the trends and seasonality of these metrics. A snapshot in time or peaks can look great, but they can be pumped up and a single number does not tell the whole story.

Beside statistics, you should also have a clear understanding of the intellectual and technical property you are acquiring. You are not buying a domain. You are buying a website and everything that goes with it, including posts, comments, media, databases, customized themes, etc.

Recommendations

There is no cookie-cutter, rule of thumb for valuation, like $10 per post or 10x monthly revenues. Here is a swag bid estimate calculation that I use:

Your valuation calculation should start by defining a financial benchmark. Estimate the monthly profit (preferred) or revenue per thousand unique visits or subscriber that you are achieving for your current blog properties.
Then use that value and apply it to the same measure for the blog in question… less 50%. Remember David said 33%. I go more conservative when making financial estimations.
Finally, my bid would be approximately 12 months of that estimated profit or 6 months of the estimated revenue. That is my personal valuation rule based on my desire to be rolling full speed with a site within a year.

For example, let’s say your current blogs make $2 profit per thousand unique visits per month and the potential purchase has 20k uniques per month. Then I would expect to make $20 per month ($2 x 20 x 50%). My bid would be in the range of $200-250 (or $20 x 12).

In addition to making a good quantitative decision, you should also be prepared with an action plan to minimize readership erosion and to increase your ramp to profitability. Specifically, make sure you line up engaging writers and content to hit the ground running and get your promotional methods implemented.

Now I am off to see if there is anything on Sitepoint or Digital Point that catches my eye!

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MySpace Opens the Door to Developers

Bob Angus — Wed, 10 Oct 2007 20:16:18 +0000

MySpace is set to formally announce their open application interface, MySpace Platform, sometime next week. This programming platform enables developers to create applications using a set of APIs that tie directly into MySpace’s social networking infrastructure. For more info, check out Techcrunch’s comments.

One key element that MySpace got right in their developer program is allowing developers to monetize their apps by controlling their own advertising. Until now, the online marketing community has primarily focused on social media optimization and driving traffic to their websites. Now with the ability to create direct revenue streams that tap into the massive social networking population, I can see entrepreneurial developers creating applications that are similar to what has come out of affiliate marketing web services.

MySpace is not the first to venture into opening their platform. Facebook has had huge success in adding new and retaining members and attracting commercial dollars as direct result of their developer platform efforts. Of course, other social networks are joining the application bandwagon, namely Google. Google’s Orkut social network and iGoogle personal homepage service are announcing their APIs in early November. It will be very interesting to see how the big social networks continue to square off on this front.

Flipping Website Real Estate for Profit

Bob Angus — Sat, 13 Jan 2007 05:49:31 +0000

You’ve heard of flipping a house as a profit strategy in the real estate market, right? First, you buy a fixer-upper house for a dirt cheap, below market price. Second, you spend some time and money sprucing up the home. New paint, replace carpets, mow the lawn, etc. Then, you put the shiny new gem back on the market and sell it for a sweet profit. Well, the same strategy works when you invest in website real estate.

Way back in August, Super Affiliate Marketing Blog had a great post on flipping web real estate. Jon details three key redesign elements to turning a low traffic dud into a website worth buying. First, the design…

Is it too crappy to look at? Do you need to change it around? Chances are pretty good that you will need to make some alterations. Whether you should redo the whole thing is again, up to your taste and budget. Remember, you already spent $500 on this, and your goal is $3k, so you don’t want to go overboard with unnecessary beautification operations.

Then, Jon drills down on steps #2 and #3 – usability and monetization. Mixed in with these steps, he gives invaluable guidance that can give you the edge to maximize your ROI. For example, focus on generating statistics like unique impressions, page rank on Google and Alexa, and some basic contextual advertising revenue. Then, provide a mini business plan with current site metrics and future projections in your “for sale” message. Help make it simple for a buyer to pay top dollar.

Also, it is vital that there is an active marketplace to buy and sell web real estate. Of course, the real differentiator that maximizes your overall profits is to understand the potential buyer and don’t burn bridges…

Remember, that even though you are selling a property that doesn’t really interest you much in holding onto, you are selling it to someone who finds it as a good deal or investment, so you must treat it with respect, because this property may be someone’s baby sometime soon…

… put some contextual ads onto it if you like, get the stats program working again, collect as much real data as possible on the current situation of the site, and then make projections of 3, 6, 10 and 12 months. Base those numbers ONLY on the current situation of the site. If you just go off and make numbers up, they won’t buy anything else from you ever again, and you may also sabotage your reputation on your first deal, which can suck.

Here is the link to the full post. The marketplace and profits are there for you. Check out Biz MP for developed websites or The Domain Name Aftermarket by GoDaddy for just domains.

Domain parking is SO easy

Bob Angus — Sat, 16 Dec 2006 01:59:26 +0000

I currently have a few of my domains parked while I build out the design and content for the sites. Domain parking is the easiest money you can make with your domains and it is the basis for a pure domain real estate business model. I am using Revenue.net’s Domain Sponsor service for both ultimatebathroom.com and ultimatetoilets.com. Feel free to check out either page to see how I’ve set them up.

Domain Sponsor is by far the best service that I’ve found to help generate some very small revenue rather than posting an under construction page while I am in development mode. There are other good services like Google Adsense for domains. Or every web hosting provider has a partner that provides domain parking for free.

What is domain parking?

Domain parking is simply an advertising program to monetize type-in traffic visiting your site. Your traffic comes entirely by someone typing in your domain – no Google Adwords or search engine traffic allowed. Based on that, you are not going to see a whole lot of folks hitting your site, even if you have a really common domain name.

Visitors are redirected to a page containing relevant advertising listings and keyword links. These ads and links are pushed by the service and are targeted to the predicted interests of the visitor. Over time the domain parking service further optimizes the ads based on the number of clicks and the payout. The domain owner is then paid via a classic pay-per-click model.

How do I make real money?

“So domain parking is incredibly easy, but I can’t see how you can make any real money.” Well, you really can’t make significant “quit your day job” revenue on an individual site basis. Then again, you can at least cover the annual cost of owning your domain for absolutely zero effort.

For me, I’ve made a whole $3.50 over the past 6 months on ultimatebathroom.com and ultimatetoilets.com – not even close to covering my fees with Go Daddy. Then again, those are terrible domain names to get type-in traffic. I am even amazed that I’ve gotten the 15-20 visits a month (about 1/3 are international).

However, there are domain real estate businesses that are playing a numbers game. If you own thousands of domains, you only have to net $10-$20 per year for each domain to grow a pretty easy nest egg. Additionally, these high volume domain owners are typically using domain parking as an enabler. They make some easy money while trying to sell the domains on the aftermarket. Plus, they can identify sites with real potential for building out and launching, or at least sites that should have a higher resale value.

I will share more on how to optimize your results if you are venturing into the domain real estate business, why Domain Sponsor is the best provider, and how I’ve customized my landing pages in future posts.

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Welcome to bobangus.com

Bob Angus — Tue, 12 Dec 2006 06:20:27 +0000

bobangus.com is the home for the network of community sites managed by Bob Angus. The site provides the latest news, opinions and results of the technology innovations, marketing programs, and business models that are applied on the network.

More specifically, I love everything about web business models, the latest marketing programs and new web development technologies. But what I love the most is results. So I’ll be sharing the details of what’s really working well, what’s not driving results, and why.
I also want to here your feedback on what is working for you and what you think of the network of community sites. Go to the Network Directory and check out a site that interests you!