Website Acquisition Strategies
Before undertaking a search for a website acquisition a smart web entrepreneur will stop and have a good think about what she wants the site to do and how it will fit within her overall web business strategy. Here is a list of the strategies to consider when buying a new website:
1. Buy a site that has targeted traffic for a product or service you already produce or sell. You can direct traffic from the new site to your products/services through advertising, email lists or sales pages. This is a great way to establish a customer base very quickly but you have to be confident that the traffic is quality, targeted traffic. Don’t fall into the trap of buying a high traffic site that consumes lots of bandwidth but doesn’t have the type of user you can leverage for revenue, otherwise you might be buying a liability, not an asset.
2. Buy a site to generate advertising revenue. In this instance you might not change the site other than by working to increase the amount of traffic and improve the performance of advertisements on the site. Sites with lots of good content but are poorly optimized are perfect for this strategy. Once you own the rights to the content you can then further leverage it by repacking and republishing the content in other ways perhaps information products, article marketing or as free give away enticements to join an email list.
3. Buy a site specifically to flip it quickly. This is perhaps the most risky venture (day-trading!) because you need to find sites that are clearly underperforming with the potential for a big upside result after you complete your renovation. Ideally you should locate e-commerce sites selling a product that has an established market that is only just starting to take off online AND the current owners are not good at search engine optimization or online marketing and are willing to sell.
The theory is that you can quickly implement your changes, tweaking a few percentage point increases in multiple areas, resulting in a good double figure increase in sales in a short period of time. If you can complete your work just before the general marketplace catches up you can make a mint by selling the site at a premium before the Internet becomes saturated and your early mover advantage is eroded or the market slows.
The web is one of the fastest industries in terms of competitive action due to the very low barriers to entry. To execute day-trading style website buying and selling requires an entrepreneur with their finger on the pulse of the web. They must be in tune with what’s new and willing to gamble on what’s going to be new tomorrow in order to have success.
4. Purchase a community driven site. A site with a massive forum filled with a nice target niche audience can be a gold mine to a entrepreneur. Often these sites were built by hobbyist fans, not aimed to profit in any way. Their website might have ballooned in growth to the point where the bandwidth is costing them a lot each month and since they are not skilled in website monetization they will be willing to sell the site at a bargain price. This can be a great strategy to make advertising revenue but be very careful with audience selection. Some forum communities are very difficult to make money from and may end up costing you more in ongoing hosting fees. Ideally choose a community demographic that has established high keyword prices in AdSense/high value to advertisers (electronic gadgets for example), has a good selection of affiliate products you could market or suits some products or services you already sell yourself.
5. Look for a site operating in a highly popular keyword niche or one you expect will become popular in the near future. Keywords drive search engine traffic and if you can pick the trends before they become trends you may own some valuable property. Consider if you could guess what tomorrow’s will be and buy the sites with established keyword rich content before they become mainstream topics and overpriced.
6. Remove the competition or merge with the competition. In this case you buy competing websites or negotiate a merger to combine with them to create one large enterprise. Depending on the industry you operate in this can be a very smart strategy to create market dominance. One of the best examples is website hosting. Often smaller hosts are bought up by larger hosting businesses with the result increased stability and professionalism.
7. Purchase a site strictly for the domain name. Obviously in this case you don’t care too much about what is already developed in terms of website content, you just want the street address (URL). Imagine a few years ago if you purchased mp3.com or blog.com. In this case the address itself is of significant value regardless of the website, or if you are good at picking trends, you might see the future value in a domain name before the market realizes it.
Tags: business strategy, existing domain, website flipping