Website Investing Weekly: Merging Domains

Website investing <<--->> domain investing

These emails are now sent via Substack - you can click on the title and read and share on the web at patey.substack.com.

Insights From Domaining

I’ve been venturing further into the world of domaining - “the business of buying, selling, developing, and monetizing domain names” (IcannWiki).

It’s like an alternative reality where content, revenue and (more often than not) links do not matter.

Buying a domain purely for the name or brand potential feels a lot like crypto, where everyone is just speculating that the next bid price will be higher.

Some of the prices, as you may imagine, are absurd to folks who only buy expiring domains at auction for their backlinks. Just take a look at some of the prices of the featured domains currently at sedo.com such as idol.com - a DR5 with only 28 referring domains for $5MM. You can also check out DN Journal’s YTD Top 100 Domain Sales and see how much Shopify paid for shop.app (still kicking myself for selling my $SHOP stock).

I don’t have the time (or desire) to search for authoritative domains on places such as on Godaddy Auctions, which is why Sean Markey’s SEM publication and newly launched domain-geeks.com newsletter by Adam Smith (from Niche Website Builders) are great. I personally get my aged domains (to build sites out on or redirect to existing sites) from ODYS, and I feature one of their domains in my Wednesday Deals emails for paying subscribers (latest one).

Our industry is used to valuing starter sites based on content (plus the number / quality of backlinks), and used to valuing revenue-generating sites based on their (yup) revenue.

As the two worlds of website investing and domain investing continue to coalesce, as demonstrated in the latest Domain Wire Podcast on building & selling websites, I wonder if we will start to factor in the value of the domain name into acquisitions.

⚡️Empire Flippers Live Auction

Normally I can’t disclose the URLs on brokerage listings in my Website Investing Deals emails, but this is an unusual site that went viral (due to the virus) and is enabling Empire Flippers to do its first live, public auction. Below is the format I use in my curated deals emails:

Site: howmuchtoiletpaper.com

Listing URL: https://empireflippers.com/listing/47884/

L1M average revenue (i.e. all revenue!): $2,300

Listing price: Bids start at $20,000

Patey Notes: DR60 bringing in 2.5K search traffic from 3.6K keywords according to Ahrefs. 1,809 dofollow backlinks from unique domains including many DR90+ from the likes of theverge.com, digitaltrends.com and vice.com. Very high page level dependency, with the top page bringing in 97% of search traffic, ranking 6th for its top keyword “how much” which gets a whopping 39K searches a month. There are over 30 keywords currently sitting on p2 in Google with > 200 monthly searches, such as “roll of toilet paper” where you can now earn a whopping 1% of on Amazon. And with the power of the domain, it would likely be easy to rank review content such as “best toilet plunger” and make a better 3% commission. Ahrefs is actually showing 34 “best” toilet related keywords with more than 500 searches a month totalling 66,500 search volume. And there are a ton of toilet related questions - 167,515 keywords to be precise - to target for ad revenue, such as “why does my toilet randomly run for a few seconds” which gets 1,300 searches a month. Just goes to show that when you’re doing niche selection, don’t sleep on toilets.

It’s not the algorithm, it’s just you

Sean Markey is back at it with another great This Week in SEO with some insights about the recent Google update, and how to identify the real cause of falling traffic.

⚡️Ad rates picking up

Ezoic updated their page on how coronavirus is affecting ad rates on Friday and the gap vs this time last year is starting to close which is good news for publishers.

Opportunity in recession

The latest episode of the Quietlight Podcast talked about buyer / seller behaviour during the Great Recession, and what we can expect with multiples over the next year as P&Ls go down.

🤝 Due diligence in 2020

In the latest episode of the Web Equity Show, Justin & Ace discussed how 2020 is turning into a buyer’s market, where investors have more optionality due to a) more listings available to look at, and b) less cash going into deals as quickly. They talk about how more people will be looking for earnouts, so listings will sit around longer, giving investors more time for their due diligence and more room to negotiate. [My own due diligence process is one of the Website Investing SOPs that paying subscribers get access to].

⚡️NEW: Website Investing Podcast

In addition to this Monday email, going forward everyone will receive a new episode of the Website Investing Podcast in their inboxes every Friday. I briefly explain the setup here in episode 0.


Sponsored by Ezoic

This newsletter is sponsored by the Ezoic platform which my main software review site runs on (literally in terms of using their nameservers) to monetize through ads and maximise site speed.


That’s it for this week folks.

Cheers!

Richard