Good morning! As the title says, I am not the proud owner of a third PF blog… I had this idea a few months back to start looking for another blog, almost bought one back in February and now it is official, servers have migrated, passwords have been changed, all mine.
Why buy a third blog?
Well, I have been really happy with the income RFI has been producing, and always considered the money “fun money”. Or money I could spend on a risky investment without having to worry about the consequences. After all, I started blogging because it was fun to write, and I still am having lots of fun with RFI.
When the online income started piling up on my Paypal account, I realized I couldn’t withdraw the money and send it to my US$ account in Guatemala, because the account is registered in France. Yes, I checked the rules about Guatemala, and if you are registered here you can’t withdraw money either, you have to get a USA bank account. I could pay Paypal a 4% commission to transfer my balance in Euros, then another 2-3% for my French bank to send it back to Guatemala, oh, and a further 2% to convert the balance back into US$. Thankfully, I don’t need the money that bad as to take a 10% hit.
So I let the money there, waiting to buy someone’s website with it.
How much is a blog worth?
Well, I have no idea. I have read a bit about it online and the consensus seems to be 12 to 24 months of income. Of course, there is good income and not so good income. If the income from the blog you are trying to buy comes only from Adsense or affiliate links, that is great, because if you maintain the same level of traffic, you should be able to replicate the income. If most of it comes from private advertising, you never know if you will get ad deals the next month, or when the next G slap will happen.
So for blogs that rely mainly on private ads, you could offer to pay 6 months of private ads income, or 24+ months of their Adsense income.
Blog A makes $100 with Adsense and $1,000 with private ads. At 24 months of Adsense it is worth $2,400, at 6 months of total revenue, it is worth $6,600.
Blog B makes $500 with Adsense and $600 with affiliate income. At 12 to 24 months of total income, it is worth $13,200 to $26,400. You are almost guaranteed to make your money back in two years if you keep doing what the previous owner was doing (which can be a lot or nothing depending on the website).
They make the same income but A might be as much as four times cheaper than B.
Then come other considerations that will be of importance. The blog’s PR, number of RSS followers, newsletter subscribers, Twitter and FB fans, Mozrank, Domain Authority, domain age, etc. If you don’t want to invest too much time on the blog, you should choose a blog with a lot of organic traffic. Check the number of posts, if they are SEO optimized, and put a couple of new posts every month.
If you choose to stay active, and the blog you have your eyes on has an engaged readership, it may be a problem to keep the fans and traffic.
Return on investment
The returns are pretty good when buying a blog, even at 24 months worth of income. Paying $24,000 for an investment that makes $1,000 per month is awesome, and a 50% p.a. return. That is if you bought blog B.
If you bought blog A, you took a bigger risk. You paid $6,600 for an almost guaranteed $100/month return, and a maybe $1,000 on top. If everything goes well, you keep making $1,100/month and get a 200% return. Or more if you expand the blogs and its revenue streams. Congrats. If private advertising stops and you only make $100 a month, you would still get a 18% yearly return, BUT
– it would take over 5 years to get your money back.
– your blog would not be worth $6,600 anymore, at most, it would be worth 24 months of income, or $2,400.
I have seen blogs selling for as much as 36 and 42 months of income, in the case of well established blogs with a solid history of Adsense and affiliate income.
Why not start another blog instead?
Because it takes a lot of time to get the blog to the level it is at when you start turning a decent income. It took me six months to get a solid income on RFI, and now, without a PageRank on MMYW, it is hard to attract advertising. So I am buying six months worth of effort, and a PR to seduce the reps who still consider it the main metric to judge a site. If I keep this blog at the level it is, in six months, I will have made my money back and then some, so I will be ahead compared to starting a blog from scratch.
In the case of blog A, it would take six months to break even, at a level of effort inferior to starting a blog from the ground up.
In the case of blog B, it would take 12-24 months to break even, but since the blog has organic, income generating traffic, you don’t really have much work to do and the blog shouldn’t lose value over time. It is like having $13,200 to $26,400 in the bank, generating $1,100/month in interest (better than any rental property in that price range, and without the tenant drama), and you can get out anytime by selling for roughly the same price.
Which did I buy, A or B?
I am the risk taking type, so I bought blog A. It is monetized mostly with private advertising so far. It needs quite a bit of TLC as the last owner has been busy for some time with other project and has not put as much time as before to keep it dynamic.
I am hoping to diversify its sources of income but will also spend quite a lot of money in staff, so I can keep mostly concentrating on my two babies, RFI and MMYW.
What is the plan?
Well, the plan is to pump some fresh content, have my VA optimize the existing content, and try to keep it growing. I will be monitoring my progress in the monthly income and stats reports here on MMYW, although I won’t disclose the name of the website just now, nor the selling price. I will announce which % of the purchase price I have made in income each month, until I break even. Then, I will show the real figures, and the site won’t be anonymous anymore.
Once this blog breaks even, 10% of its income will go to sponsor young girls’ education in my village.