My website ownership experience

My website ownership experience

A couple years ago I decided that purchasing an income producing website might be a lucrative investment. After doing some reading, I liked a few things about the proposition.
- margins are great, hosting costs are really cheap
- hours are flexible
- geography is flexible
- possible to start small
- employees aren't necessary

I bought two websites in 2007 with decent traffic. ipodwizard.net in March and counter-strike-dl.com in July. Both sites were purchased from auction listings on sitepoint.com. Both earned the majority of their income from the google adsense program, had decent traffic (combined 8000-10000 uniques per day), and a decent percentage of traffic coming from search. The two sites fit relatively well onto a server that cost $220/mon. That was my only real expense.

The results:
ipodwizard.net -
owned March 2007-August 2008
paid $27500
earned $29800 during that time
sold $15100
ROI = 63% (too lazy to compute annualized)

counter-strike-dl.com-
owned July 2007- August 2008
paid $10000
earned $9600+
sold $8000
ROI = 76%

ROIs are slightly lower because I didn't include the hosting in the earnings above, but assume $110/mon for each or $220 for both.

Why did the sites sell for less than I paid?
The earnings from both sites peaked during Aug-Sept last year. Since then, my traffic has been holding up, but ad revenues are way down. In the case of the counterstrike site, my best month was $1800 or so and my worst was $500. My theory is that the broader economy is doing worse, and ad budgets have been cut. I think its worse than that though. Perhaps google and the other ad networks decided to reduce my share or got better at detecting accidental clicks, etc...

Why am I selling at all?
If these were such a good investment last year, why aren't they still? Well for one, I was getting nervous about the continuing revenue declines. Its entirely possible internet advertising has been in a bubble the last couple years with a lot of new companies experimenting with the adwords program from google. Perhaps earnings won't fully recover with a better economic outlook. Also the two sites I owned I felt had a "shelf life". In 5 years no one will be carrying an ipod. Even the simplest phones can play mp3s even now. Why carry two devices? Further, the ipod site's popularity hinged on a hacking program that was becoming largely irrelevant. The newer ipods don't work with it. I felt the time was right to get out before earnings declined further. I was earning about $1100/mon with the site at the time I sold. The counter-strike site's popularity was based on skin downloads for one of the games. I was worried a new version of counter strike would supplant the popularity of the existing one, and I am not savvy enough with graphics or the game to create new skins. I am also leaving the country for a couple months, so I wasn't going to be able to respond to problems should they arrive with the sites.

When I get back from my vacation, I plan to pursue some more of these website purchases. If this comes across as a brag post I apologize as that is not my intent. I just thought it would be of interest to the forum. I'll try to answer any questions as best I can.

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24 August 2008 at 06:32 AM
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Earlier posts are available on our legacy forum HERE

Interesting to read about your experience! Has the effectiveness of SEO changed compared to previous years?

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