Is Your Website Valuable?

Excalibur - a mark of value

 

If you are thinking about creating a website that is a valuable asset, remember that not every website has value. There are a few elements that add value and you should carefully monitor how successful they are in your web property. If these elements of your website aren’t performing, or their performance is declining, the value of your web property declines — sometimes rapidly.

Websites are like businesses. If a business can’t attract customers it can’t make money. If a business is selling something that is too expensive or that nobody really wants, it won’t make money and customers won’t come back. If you regard your website as a personal creative outlet or a hobby that amuses your family and friends, it probably won’t have value if you want to sell it and get paid for all the work you put into its creation and maintenance.

Elements that Create Value

When I review websites for Latona’s, I look for these value-adding elements:

  • Traffic. If nobody visits your website, you are unlikely to make money from that site. However, traffic is not the only element of value. For example, a brochure site may promote your brick and mortar business. It might explain how your services can benefit a client. Perhaps it even provides your clients with access to their account information or other useful online services. As a brochure, it might attract traffic, but it is a marketing asset for your business and its traffic is only valuable to your business. So, if you sell your brick and mortar business, it will add value to the total sale, but as a stand-alone sale it is unlikely to have much value.

 

  • Revenue. If you have traffic to your website, but you don’t have revenue coming directly from the website, it will have limited value. Gertrude Stein was rumored to have told her clients that nobody wants and artist who can’t sell his work. The same is true for web properties. There are ways to create revenue with your website:
    • Sell things. What you sell isn’t as important as the amount of revenue it produces. Obviously, the greater the revenue, the higher the value. You can sell things directly from a shopping cart on your site, or you can use your site to attract traffic to things you are selling on Amazon or on eBay. As part of a seller account on these large e-commerce sites, your referring website has value because it helps you to create revenue from sales. Alone, without transferability of your seller account, your website has little value. If you build a successful e-commerce web business, you must sell the entire enterprise including e-commerce platforms, supplier contracts, affiliate programs, and anything else that goes to make your site a successful revenue producer.
    • Advertise. Traffic and advertising go together to produce revenue. When you visit some sites you will see ads for various stores and other businesses. Advertisers pay to have their ads displayed on your site and they pay more if your visitors click on their ads. Most websites get these ads through ad networks. Google AdSense is arguably the biggest and most popular ad network. You can also contract directly with companies to publish their ads on your site for a fee. You can also create an affiliate program where other websites market the products or services offered on your website.

 

  • Content. You have heard that content is King. Well, if you want to attract traffic to your site so it produces revenues, one way to almost assure that is to produce excellent content on a regular basis. Good content that is original keeps your site listed high in the search engines and helps to provide organic search traffic, which is what you want.

 

  • Longevity. If your site has existed for a year, it is not as valuable as a site that has existed for several years. A site that has been producing for years and shows a gradual rise in traffic and revenues demonstrates stability. Reliability of traffic and revenue is very valuable.

To learn more, please check out our Resources section.

Web Property Income Potential

Technology in the hands of businessmen

 

The more I think of it, the more I see a strong similarity between bonds and websites.

Perhaps I look at these things a little differently than most people. I spent 20 years as either an institutional bond broker in top-tier Wall Street or a bond portfolio manager with $280 million and $1.5 billion funds.

Basically, I look at bonds as reasonably safe producers of passive income. You buy a bond and you put your faith in that issuer, be it the US government or a corporation, to pay you timely interest and principal.

A few months back, I started working with a new client: Latona’s, the World’s leading and largest web property brokerage. They specialize in established and profitable web properties.

For some reason I didn’t understand at the time, brokering web properties hit me right away as being very much like the bond business — which I loved!

As I have discovered during my months working with Latona’s, it truly is a lot like the bond business, and I believe its growth and development will eventually result in an important investment tool.

Why Web Properties are Investments

Websites are an interesting property. I never thought about them much until I got into this business. They were just online brochures for me and my business. And they were places to go shop, read the news, pay a bill, check my bank account, etc.

Since working at Latona’s, helping to scrutinize the listings and design their marketing approach, I am realizing that every day I visit a bunch of small websites that I find interesting and add them to my bookmarks, so I can find them again when I am looking for what they provide.

Somehow, when I think of the Internet and my usage of it as a whole, I totally forget them. But now I see them every day. They are little islands of value. Some of them get millions of unique visitors every year. Some get a few hundred a month, and some get a hundred thousand uniques a month. Some have over 50% return users and others have 15% return users.

Basic Web Property Business Operation

For the most part, they require at most a couple hours of time a day to maintain their operation and the income they produce.

As people visit those websites, they see advertisements. They might be in-line links, pop-ups or the boxes around the edges. Each of those ads is a link to an ad network that placed them there. Google Adwords is probably the best-known ad network. Google AdSense is the best-known ad placement agent. And you can see what a big business it is by the mere fact that Jeff Bezos has decided to create a new company, presumably Amazon Adwords, to provide the same ad network services.

You can see what a big business it is by the mere fact that Jeff Bezos has decided to create a new company, presumably, Amazon Adwords, to provide the same ad network services.

What does this mean? Of course, when you see ads on a website, you know the ads are paying to be displayed on the website. Do you realize how much?

Some of these little websites that you hardly think of are raking in $100,000 a year just off ad network income, alone. And they have very few expenses: web hosting of a few hundred a year, domain name registration, and the time and effort of the website owner.

Few have employees. It just takes a couple of hours by the website owner to publish new content and answer emails. That’s pretty much it.

Creating a Web Business

HOWEVER, it isn’t really as easy as all that. You see, it takes an incredible amount and effort to discover a good niche, choose a name, design a business model, develop content around that niche and business model, develop and implement SEO marketing, develop and implement social media marketing, (both huge tasks in themselves) tweak and tweak again until you get it right, and wait for the tipping-point when the site pretty much runs itself and draws in fairly reliable, stable traffic.

It’s a lot like putting together a startup business in the real world. In fact, it differs only in that it is a digital startup business.

Did you know there are a lot of people ‘out there’ who make a great living off of creating websites, developing them until they have reached that passive-income-producing stable phase, and then selling them?

Who do they sell them to?

Who Invests in Websites for Business?

invest in a business

 

Some people are looking to buy a business to work in, themselves. Buying a web property generally provides a turn-key business that is, hopefully, already producing revenues and is a good investment. This saves the buyer a lot of time and effort creating and marketing the site to attract traffic. Good reliable traffic generally means good reliable revenue.

Other people are accumulating an investment portfolio of websites that produce income. Those who only own a couple websites usually manage them personally. Owners of larger portfolios hire people to do the management. There are individuals and companies all over the world offering these services and most of them do a great job of it no matter where they are located. The Internet connects us all in a standardized way.

So why do I think of websites as similar to bonds?

Websites pay their owners somewhat passive income if the site is set up to do that. Not all websites are managed to generate income — their purpose is to be a brochure site for some business. They are not the investment-quality sites I am talking about. Those web properties, that are operated as small businesses with the goal of producing their own revenue, do result in potentially reliable income and can be considered investment-quality.

Some result in more income than others. That’s where quality comes in.

When you buy a Treasury bond, you are pretty much assured you will receive your timely interest and principal payments. When you buy a corporate or municipal bond, your timely interest and principal payments are reliant on the performance of the corporation or municipality that issued the bond.

When you buy a website, your stream of passive income is dependent on the marketing skills of the operator of that web property. Like I said earlier, there are people and companies all over the world that specialize in operating websites for the purpose of generating revenues, and they don’t cost all that much to hire.

The important difference, as I see it, is that if you own a website you can change the quality of management, so you have control over the vulnerability of your income and asset value.

With a bond, you just have to hope the managers of the issuer are doing a good job and will pay you your interest and principal in a timely fashion.

Oh, and I forgot the other main difference: Return on investment.

Right now, bonds are yielding pretty much zip in interest.

I am seeing websites being sold that will return as much as 50% annually on the investment amount. Most of them return about 30%, but again, the return is dependent on how they are managed, which is not difficult when all the pieces are already created and in place.

What this means is that you can buy a website, neglect it or mess it up, and your return will go down. It also means that you can buy a website, put in some improvements yourself, or hire someone to do that and manage it for you, and your returns will likely rise. Not only can the income fluctuate depending on how seriously you take the investment, but the value of the web property will fluctuate, too.

Many people invest in modest web properties, add SEO and social marketing, spiff up the site itself, and then sell it for a big profit — having received increasing income while working on the improvements.

So, you are probably wondering why web properties are such a great investment deal.

A huge part of the reason is that investing in them hasn’t hit the mainstream, yet.

Don’t expect the fabulous returns to remain so fabulous in the future! I am already seeing them start to slightly trend down in just a few months as their purchase prices rise. As bond yields remain low, and the stock market is getting scary, more and more people are looking for alternative investments — like web properties.

And many are finding good investments in web properties.

Marketing Your Website

25 Content Marketing Tips Every Marketer Needs To Know

Content marketing has become a big part of consumer engagement and attracting the attention of the right audience online.

Your web property won’t be successful if nobody knows about it. That means you must market it properly. Search engine optimization (SEO) is one of the tools you should learn about if you intend to buy an existing website. Content marketing is also important to learn. You will find that the difference between SEO and content marketing is the “tastes great” vs. “less filling” of online marketing. There is one ultimate truth: good content, well marketed, is just as important as good SEO in making your site successful.

Here is a good article that covers a lot of information you will need to know if you want your website to be successful:

25 Content Marketing Tips Every Marketer Needs To Know

This information applies to any web property. If it is already ranked high in the search engines and receiving lots of organic traffic (visitors who have found you through a search engine), unless you understand content marketing and SEO your site traffic could go through a rapid decline. SEO is one part of marketing your web property, but great content is also part of SEO.

Content Marketing and SEO Sources

If you are considering buying an existing web property and you don’t feel you know enough about how to keep it successful using these tools, there are many ways to hire the expertise you need. Check out one of the job sites like Upwork (formerly eLance) and search for “SEO” or “content marketing” companies and freelancers. It might be politically incorrect to tell you that offshore providers are inexpensive and generally good at what they do; however, when you are just getting started cost matters.

Other ways to learn include the very helpful online videos you can find on YouTube and Lynda. Just search for the terms mentioned above. There are also other sources of excellent information, so keep searching.

 

What is a Web Property?

A web property is an asset. If you own a website, you own an asset. It might be just sitting there being a static website you haven’t updated in a long time. It might even have value if it has been active for many years, has a prime domain name, attracts substantial traffic, or generates revenue. No matter what shape the site is in or what it is used for, it is an asset.

Valuing, buying and selling websites.

A web property asset can be any of these common types:

Basic Static Website

E-Commerce Website

Blog

Amazon Seller Account

Domain Name

Many people play around with creating websites, never realizing what they might have. For example: Your son might have created a trading card website for school, and over the years it has become an important source of information on those types of trading cards. However, when your son went off to college, he lost interest. Over the years, that site might have built a large and dependable flow of visitor traffic and has been linked to as a valuable resource by other websites. With a little effort, it could be generating revenue. It might also be valuable enough to sell for an amount of money that could pay for some of his college education.

Many people who own websites don’t realize that they can be sold quite easily, and sometimes are worth more than a million dollars.

Websites can be created for very little money. All you need to do is select a domain name and have it hosted. The rest is a creative activity of setting up the site design and content, so many people create hobby websites to educate others about history, crafting, gardening, and other such interests. Many of these sites are only intended to provide creative satisfaction to the site owner plus the pleasure of knowing that a few people visit the site every month.

However, other sites generate hundreds, if not thousands of dollars each month for their owners.

Other people don’t realize they can buy a profitable web business.

Other people don’t realize they can buy a profitable web business. They might be looking for additional income and are considering creating an online store, but hesitate to move forward because they don’t have the knowledge or creative skill to easily build a successful e-commerce website from scratch.

Operating online businesses is a relatively new thing. Buying and selling existing web properties is also a new thing. In fact, there are reputable brokers online who specialize in brokering web properties of all types.

However, not all web properties are the same . . .

. . . which is why on this site I will be teaching you

How to tell if your old website is actually worth money if you were to sell it.

How to increase the value of your website.

How to sell that old website.

How to buy a website that is already producing revenue.