Supernatural Agency: Online business tales

While I am not always a fan of the moz people, this post spells out the simple equation for building sites that will, eventually, get ranked well by the search engines. The only thing I would add is something I, as a professional writer, think most SEO pundits don’t understand: Great, relevant text content solves 90% of your search ranking issues.

There is a tendency amongst site developers to believe that there is a secret formula to getting high search rankings. Rand outlines the not-so-secret formula in his post. However, if you get a good writer who does their homework and writes content that is relevant to the intent of a searcher and you build a site that is compliant with Google’s guidelines, then your SEO will be on autopilot.

Now here’s a truly valuable tip: Writers can be hired at ridiculously low rates. I ran an ad on Craigslist for a writer to take over one of my blogs and offered to pay a few cents a word. In our relatively small market (Rochester, NY), I received dozens of replies. If I had run the ad in a major metro I suspect the response would be hundreds. This is a sad statement about the value writers put on their (very) valuable skills but that’s another post…

This afternoon I looked a new loft development in a small 19th century warehouse in our formerly industrial downtown area. The building has eleven lofts and some commercial space. It required extensive renovation and the lofts will be rentals in the $1500/month range (you get a lot of for 1500 bucks in Rochester). By my calculations the annual revenue from the building will be about $360,000 per year before expenses. Assuming they have $1.5 million into it, and leaving out tax considerations, they’re getting something like 24% return on their money. This is an extremely simplified example that leaves out expenses, equity growth, etc.

Let’s say I have $1.5 million to put into domains. I buy 50 good domains for an average of $1000 each. I spend the remaining money building content on them, buying PPC and doing SEO to increase traffic. When I’m done with my build-out I have 50 sites generating $1000/month each or $600,000 annually (a very conservative estimate). I also have an asset that has grown dramatically in value. The building above might be worth twice what they have invested once its fully rented. My 50 domains are conservatively worth ten times annual revenues or 4x my investment. And I have no renters, complaints, management costs, etc.

This comparison tells me something. The prices of even long tail type-in domains are going to go through the roof as ordinary people start playing the game. Once this bubble begins it will already be too late to get in. It will expand and explode. The real game will be deciding when to get out.

We live in interesting times.

No, this is not a ‘make millions working from home’ scam- or is it? Acquiring domain names (URLs or web addresses) and putting them on mini sites that generate revenue from things like Google Adsense and Affiliate programs is what domaining, at it’s most basic is about. You think up a domain (or buy an existing one), park it using a parking service like Sedo or DomainSponsor and let them create content and revenue (which they split with you) or build your own site around it. You can use something like Weebly if you’re not a programmer. Then you sit back and watch the pennies roll in.

That’s right, pennies. It takes a lot of pennies to make a million bucks (100 million- but if you can’t figure that out I’d suggest you go into ditch digging) so if your sites really take off and start making $.50 a day it’s gonna be a while before you’re living large.

So you have to take it to the next level which is where it starts to look like work (I never said this was easy did I?). There are several approaches:

• Register zillions of names, park them and build wealth incrementally (1000 sites x $.50/day = $182,500/year). This assumes you have the imagination to think up 1000 dot com domain names without dashes (the only domain currency, IMHO) and have the time to patiently manage them. It can and is being done by many people, some as a sideline, some as a very lucrative business.
• Build a portfolio of strong domains (they should reflect a subject matter associated with lucrative buying patterns in a niche), say 100-200 and actively build sites with real content, SEO and SEM, and a variety of related monetization options. Here your goals is hundreds to thousands per month per domain in revenue which just keeps adding up as you add sites and manage them. A lot more skills required here: writing, SEO/SEM, marketing investment (plowing money back into your PPC), site development skills, etc. Again this is doable- add one domain a week and get its site up and by the end of the year you’ll have 50 or so sites working for you.
• Build a portfolio of a very few, very strong but underdeveloped domains and create a serious online business around them. This isn’t within reach of your work at home entrepreneur. You need significant cash to acquire these domains and business development knowledge but the rewards can be huge.

So what route do you take? Well, that isn’t really the question. You start with the first option, develop your expertise with a lot of little sites serviced by others and then sell off the underachievers. That gets you to the second stage where you start to develop a vision around how your domain portfolio is going to grow. You optimize these better domains and when you know the best performers and find a common theme that works for you, you again sell the ones that don’t perform or don ‘t fit into your chosen vertical. With the cash you raise you start to look for under-utilized domains in your niche and buy them. The goal is to develop a portfolio whose value is great enough to attract the big money. That’s the route to millions and I suspect that by the time the few that make it get there, it’s no longer a mom and pop business.

Now if you’ve ever watched any of those real estate get rich quick working at home dealies then this should sound pretty familiar. It’s very similar except the cost of entry for stage one is very low- a few dollars per domain, creativity and a bunch of busy but not particularly hard work. A lot less work than convincing people to give you mortgages on crappy houses, throwing paint on them (it’s never that easy) and then hoping they sell for a profit. Yet thousands spend thousands for courses on how to do this.

And here we are telling you for free. So if you like this, tell your friends and send ‘em our way!

Our business doesn’t really have a web site. Yes you can visit www.supernaturalagency.com but all that’s there is a little text about what we do and a link to this blog. And we don’t intend to build a corporate site. Why should we? Anyone interested in us is going to learn a lot more about the business here and we can always add web pages to our sidebar content if need something more fixed, content-wise, like a privacy statement or contact info.

As we develop our site templates for our media sites it is becoming increasingly apparent that many of them will work better as blogs. We use contributing editors to provide content and with WordPress they can log in and contribute from anywhere without programming skills. We can use our admin controls to manage the content and control what it is- and when and where it appears.

We’re spending a lot of time on developing search optimization techniques specific to these blog templates. The intent is not to ‘game’ the system but to ensure that the information indexed by the engines is correctly identified as highly relevant to their searchers’ intent. Because blog software has its own automated ways of handling things like links and URLs, it requires a different approach to SEO.

The beautiful thing about a blog as a platform is that it practically demands fresh and up-to-date content. With most affiliate sites and parked domains the opposite is true- content is very static or non-existent. We believe that the algorithms are going to add freshness into their ranking systems. This makes sense in a world where they are indexing sites much faster and more frequently. Why wouldn’t they added a recently changed attribute to a content index? Mix it in with relevancy of the new content to create an additional ranking factor for the site.