In this blog, I write about what I am doing to create various income streams that come from online endeavors. The monthly income reports detail my results. Why am I…
How I did not buy a tech website (and what you can learn from my experience)
Despite already having several websites, I am still thinking of buying yet another website!
I want to acquire something from the tech domain, ideally a Saas, or maybe not. Too bad that websites from this domain and in the price range I can afford are very, very rare for sale.
But sometimes, I do see some interesting proposals.
For example, a couple of months ago, a newsletter from one of the website brokers I follow showed up in my inbox. It was talking about new listings they got and one of the listings seemed to be very, very interesting 🤪
A pretty picture 🤩
The broker I got the email from (I cannot say which one exactly because of the NDA I signed) is the one I trust quite a lot knowing they put a great deal into doing a good due diligence of the websites they sell.
I opened the email with big anticipation and started reading about the listing.
👍 The traffic of the website was enormous over 200k a month 🤯 with only 30% of it coming from the organic search.
👍 The website was ranking #1 and #2 for some high volume keywords and its DR (domain rating in AhRef) was hu-u-uge.
👍 The age of the website was under 1 year and it was just mind-blowing how it rose up so quickly to the top of SERP.
👍 The website niche was about mobile software. It matched some of my past experience as a software developer and it was still interesting for me. I had enough expertise to maintain the existing content and develop it further.
👍 The revenue was coming from display ads with AdSense monetization. The owner claimed he never tried any other advertising platforms so doing so seemed like a low hanging fruit for increasing the revenue.
👍 The website in its current state seemed to be a good stepping stone towards further expansion into the tech niche with affiliate programs, lead generation, etc.
I got so hooked! 🤩
This all looked great and almost exactly what I was looking for!
I told Sam about it and he was like: “What are you waiting for??? Go go buy it!”
But of course, before committing to anything, I needed to gather more information about it and make a relational decision.
Because there were some big but-s 😒
But the price 💰
First of all, the price of the website was quite steep.
The price multiplier (the number of months that would take the website to pay back the purchase price) was 35. It meant it would it 3 years to pay back what I paid for it given that the revenue stays the same 😱
It is a normal multiplier for a SaaS that usually has a more reliable revenue model and projections compared to the rest of monetization methods.
However, for a website monetized with display ads, which depends on the whims of Google and ad platforms, it was way too much 🙄
But the website content 📝
Then, there was the content already present on the website.
It was clearly posing a problem.
👎 The published articles had an average quality, to say the least.
👎 It was very visible they were written by somebody who’s not a native English speaker.
👎 The text was also quite over-stuffed with keywords 😱
👎 And the last but not least, the length of the articles was mostly short- and medium-size 😒
On the plus side, the content had unique pictures taken by the owner (and not stolen from the internet).
If I am to buy this website, I would have to revamp pretty much each and every one of the articles 😒
But the traffic 📈
Then, I looked at the traffic.
Aaaand here, I immediately saw yet another problem 😯
The majority of the traffic was coming from India, Pakistan, Indonesia, Latin America, etc, and only ~14% of traffic was from the USA, UK, Canada.
This kind of traffic is usually considered to be hard to monetize. In my case, since I live in Canada, potential advertisers would mostly come from the US, Canada, and probably the UK. I don’t think they would be too thrilled to pay for the traffic that does not contain their target audience 😒
But the monetization perspectives 💸
Speaking of advertisers, how do similar tech websites make money?
I looked at the closest competitors who was ranking for the same keywords on the first page. Some of them were very established websites and all of them had 50,000 and more visitors per month.
The strange and upsetting thing was that it seemed that all these websites were using Adsense for monetization. Only one out of eight managed to get such high traffic numbers that it got approved by Taboola (they require min 500k a month).
👎 On these websites, I was hoping to see Mediavine. I knew that switching to it would increase the revenue at least by 100%.
But none of the websites was using it. I found many forum threads where users were complaining about how Mediavine is picky to choose what websites to work with. I realized that Mediavine probably does not work at all with websites from the tech domain. Also, they seem to prefer particular traffic that comes from the US, UK, and Canada.
👎 Nobody was using eZoic either. While eZoic seems to be more relaxed when it comes to approving websites, it seems it does not work well with the tech topics either.
My hopes of doubling the revenue easily died on the vine.
And on top of that, as I mentioned above, I was not sure whether potential advertisers would be happy to pay to promote their product to readers from the Middle East and Latin America…
So it seemed that all my hopes to grow revenue were groundless 😢
Making an offer 🤲
Despite all the negative things I found out about the website, I was still hooked. The traffic numbers and the website niche, it all looked too good to pass on!
So instead of rejecting it right off the bat, I decided to make a low-ball offer.
I offered 40% less than the broker was asking for this website. I explained why by listing all the reasons I mentioned above.
I knew that I had tons of competitors who were eager to buy the website so I doubted my offer would be accepted. It was just a polite way to say no 😆
As expected, the reply was also no. Somebody was already ready to pay the full price.
However, this was not the end of the story.
What happened next? 🤨
Well, a couple of weeks later, the broker came back to me with this listing 😮
Turned out the other buyer who offered the full price bailed out. 😱
Ha, I guess that person also took a look at the traffic and saw that it was no good, I told myself 😆
Learning about it was a big red flag for me. I had already gotten over the website and definitely was not eager to buy it now for the price I offered since someone else also decided the website was not good enough to buy.
This time, I again did the same trick.
I offered a price that was even less than the one I sent before. The number was less than 50% of the initial price.
I was ready to buy it for this new low price. If it worked, it would mean I made a nice handsome deal 😊
But it did not. 😔
The broker found someone else who was ready to pay the full original price.
Do I regret it? 😶
And this is how I did not buy a tech website.
Since then, I keep peeking at its traffic numbers once in a while… and somewhere deep down in my soul, I regret a bit that I did not take this journey fraught with danger 🤣
The website is doing fine, no major changes. The traffic decline I saw bounced back and then dropped again 🙈
Sam says that with such an attitude of finding a perfect yet cheap website, I will never be able to buy anything. Something tells me he might be right!
Things you can learn from my experience 👨🎓👩🎓
Here’s a brief summary of the main things you can learn from my experience of not buying a website:
- Understand whether the price of the asset you plan to buy is fair; how does it compare with the price of similar assets?
- Audit the content; is it high quality or you would need to fix it?
- How about traffic, does it come from the countries or geographic areas, in which you can easily find advertisers / customers / readers?
- Check the competitors, how do they do monetization? Would it be sustainable for you?
- If you decide to make an offer, offer a price that you think is fair.
- If you decide not to make an offer, offer a very low price; who knows, maybe you will strike a good deal!
Follow these pieces of advice… and you will never ever buy a website 😂😂😂😉