I was just presented with what seems to me a rather unusual opportunity. Of course maybe it's not that unusual but I am rather ignorant with online only businesses.

The owner of a fairly large and very old website in my field has just offered me to lease the site from him. He currently has many related sites and over the past few months has become extremely overloaded with keeping them all updated.

He does not want to hire workers as his desire in business is to remain as lean as possible, so he has decided to lease some of the sites to experts in the field.

The site is a PR7 site and gets about 22,000 unique visitors per month. It also has a subscriber database of about 400,000 for its free newsletter.

The site has been in existence for over 10 years and already generates revenue from advertisers and affiliates. It spends zero dollars on advertising because it already has very high organic placement and is considered the authority in its subject matter.

I cannot mention the site due to privacy issues, but it is a very, very popular site in this field. The lease amount is about the same amount I currently spend on advertising for my site. If I do the deal, I would eliminate my ad budget so the monthly cost would be a wash.

I can easily place my own site as the primary affiliate link on the site which would improve my own site's rankings as well.

Also, there are several other experts that are regular contributors to this site and will continue to be contributors so the content will stay the same or hopefully improve if I take over.

My concerns are:
1 - I am not very savvy with web marketing
2 - Related to #1, will it be able to generate enough revenue to justify paying to lease SOMEONE ELSE's website?
3 - How time consuming is managing a site that provide high quality content and generates revenue from advertisers and affiliates?

What intrigues me:
1 - The site generates a large amount of traffic giving me access to a much wider audience
2 - Passive income from advertisers and affiliates

As a side note, I know the guy that owns the site personally and trust him. I am not concerned with a scam artist.

Any suggestions or feedback would be much appreciated. Feel free to shoot holes in this opportunity. Don't hold back.

There are any number of ways you could monetize that site. Do you get access to the mailing list? That's the first thing I would jump on.

PR7 is some way powerful link juice, especially if you're leaving everything on the owner's server. The one way inbound links to your own sites from a PR7 site on a different class C IP block are gold. Choose your anchor text carefully.

Look at it this way, if you can funnel enough traffic from that site to your own site that it would equal the traffic you're presently getting from your advertising, that is a wash. Anything else is gravy.

John Rogers said:

Do you get access to the mailing list?

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Yes.

John Rogers said:

especially if you're leaving everything on the owner's server.

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It stays on the anchor site server. I don't take possession of the site, only lease it. I would sign a lease agreement through my company and gain full access to the site and all of its assets.

John Rogers said:

funnel enough traffic from that site to your own site

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This is one benefit for sure. But I would also make money from advertisers and affiliates on the site that I would be leasing.


Thanks for the feedback.

Well, he can tell you how much he is earning a month from it and if it's more than lease you pay than it can be a no-brainer. Web marketing is not really hard, you can learn it easily, plus you can always ask for help on this forum. Depending on how much content each week you have to write it can be even easy. I assume you would have to write something for newsletter too. Here is a recent Mixergy interview with a guy who runs a newsletter site and has more than 100 000 subscribers, should give you insight into how it's done:

How StartupDigest Got 100k Email Subscribers in One Year – with Chris McCann | Case Studies & Business Tips

Save the MP3 to your computer too, it's only available for couple more days..

John Rogers said:

Do you get access to the mailing list?

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GlobalWealth said:

Yes.

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Assuming the site owner sends offers to that list, I would ask him what types of offers convert best. Then go find offers to send. That is going to be the easiest money in your pocket, and a method of monetization you can implement immediately.

Gymjunkie said:

how much he is earning a month

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It's earning about 1/2 of the lease fee. I am paying about the same as the lease fee on my own advertising, which I would eliminate, so effectively I would cut my ad budget in half but potentially generate more traffic to my own site plus the leased site.

But it is an annual lease, not a purchase. The contract allows lease renewals, but I still have to pay each year. My concern is more of a time issue. I can most likely reduce my ad budget, but I don't want to increase my time commitment dramatically without the profit potential. This is where I am woefully ignorant.

Gymjunkie said:

I assume you would have to write something for newsletter too

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I would most likely write something weekly, but I don't have to. There are many contributors already providing quality content on the site.

Also, work on moving those newsletter subscribers to your own list. That way after you let the lease go, you still have access to those subscribers.

If you don't want to invest a lot of time in the project, do things that run on autopilot and outsource where you can.

Hey Global,
I'll try to give me my best opinions:

My concerns are:
1 - I am not very savvy with web marketing
With a site and followship that big; it'll be pretty hard to go downhill unless you just start putting out terrible content. although, if you do some research, throw a few viral contests, take advantage of all those people, you could really blow it up; given the site hasn't reached a ceiling on it's market of viewers?

2 - Related to #1, will it be able to generate enough revenue to justify paying to lease SOMEONE ELSE's website?
That's up to you; you can bombard it with adsense ads (not recommended) or what I would do is start a very, very slick lead generation somehow into the site. The only real way to increase revenue would be to get more advertisers which means either 1) you'll need more traffic or 2) go out and actively hunt down folks who may buy advertisement. 3) You could try some slick buysellads.com too

3 - How time consuming is managing a site that provide high quality content and generates revenue from advertisers and affiliates?
The content can all be automated by outsourcing it, so you'd just be a moderator. The relationship of the advertiserss and affiliates is on you. The more time spent on it and finding new ones, the higher the income.

Also, I just shot you over a PM: it's kinda joking but a serious proposition at the same time. Anyways, feel free to hit me if you want some more opinions on anything else.

- James F.

John Rogers said:

what types of offers

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The mailing list gets an ezine which has 10-15 articles in each one. The contributors write the articles and most of them pay per article or an annual fee to be on the site. Each contributor has a 'call to action' in their article that allows them to market themselves.

The revenue here is the contributors paying to place their content.

The other revenue is other advertisers and affiliates.

GlobalWealth said:

It's earning about 1/2 of the lease fee. I am paying about the same as the lease fee on my own advertising, which I would eliminate, so effectively I would cut my ad budget in half but potentially generate more traffic to my own site plus the leased site.

But it is an annual lease, not a purchase. The contract allows lease renewals, but I still have to pay each year. My concern is more of a time issue. I can most likely reduce my ad budget, but I don't want to increase my time commitment dramatically without the profit potential. This is where I am woefully ignorant.

I would most likely write something weekly, but I don't have to. There are many contributors already providing quality content on the site.

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Can you do shorter deal? I'd do it for 3 months for sure and then take it from there.

I think you can make up for half the budget lost in additional income from the site by using the site to build your own list (which will get your revenue from your site) and then doing one big or two smaller affiliate promotions that could potentially make you lots of money. If you have to go in for a year then at least get an option to cancel it after half a year.

And having others paying to write content takes lots of work off of you so that's great. Combine that with direct income you can get if you convert sites users to your clients that is a great option!

Gymjunkie said:

Can you do shorter deal?

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No, I tried. We have discussed this already. For 2 reasons;
1 - There is cost associated with upgrading the site and moving it to the new platform (included in the lease fee)
2 - He wants someone committed to the concept so there is no turnover.

GlobalWealth said:

No, I tried. We have discussed this already. For 2 reasons;
1 - There is cost associated with upgrading the site and moving it to the new platform (included in the lease fee)
2 - He wants someone committed to the concept so there is no turnover.

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I see... Well, do the math man, if it makes fiscal sense and takes your personal biz another level and it looks like something fun than do it, if not, say no and look for other ways to improve your biz..

Gymjunkie said:

takes your personal biz another level

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Maybe this is a concern or question. I think if done properly, it will not only take my business to a new level, but take it in a different direction by allowing my to monetize the site itself and create passive income.

On the other side, it could just be a way to generate more traffic to my own site that can increase business. The downside there is whether the cost is worth the benefit.

As I am not very familiar with making money from websites, this is one of my big Q's.

GlobalWealth said:

No, I tried. We have discussed this already. For 2 reasons;
1 - There is cost associated with upgrading the site and moving it to the new platform (included in the lease fee)
2 - He wants someone committed to the concept so there is no turnover.

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When you say "moving it to the new platform" are you referring to changing the site to a new format or content management system?

Neon said:

"moving it to the new platform"

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the site stays at the same url on the same server. But it is getting a new look/feel with some upgrades and will be converted to a wordpress site.

GlobalWealth said:

the site stays at the same url on the same server. But it is getting a new look/feel with some upgrades and will be converted to a wordpress site.

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Changing the platform is a pretty radical makeover.

With numbers like this:

GlobalWealth said:

The site is a PR7 site and gets about 22,000 unique visitors per month.

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I don't know that I'd be trying to fix what isn't broken.

John Rogers said:

Changing the platform is a pretty radical makeover.

With numbers like this:

I don't know that I'd be trying to fix what isn't broken.

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+1


Again, internet marketing isn't hard to learn and you can get basics in a week or two from the right source. Here is one: Passive Income: The Smart Passive Income Blog
Or you can hire someone to help you with the site and monetization for barter or for a cut in profit etc. Not necessary to do it alone!

GlobalWealth said:

the site stays at the same url on the same server. But it is getting a new look/feel with some upgrades and will be converted to a wordpress site.

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This makes me a little hesitant without knowing the details.

Wordpress is a great platform although for large sites it can take some serious tweaking, but it makes me worry about SEO issues. If you take a PR7 site and start radically changing the site structure you may find some serious loss of SEO-love. Alternatively, it could be really good but there's no surefire way to know until the changes are made.

Is there a particular reason the format is switching?

changing the platform will take a MAJOR hit on SEO.. not recommended.. it would be better to make a whole new site with wordpress and then move the site (301) to another domain than to completely change the platform.. in SEO eyes anyways..

Neon said:

If you take a PR7 site and start radically changing the site structure you may find some serious loss of SEO-love.

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JamesF said:

changing the platform will take a MAJOR hit on SEO..

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That is my concern exactly. At best, even if you managed to keep the pagerank, the ranking in the search engines for specific keywords is going to tank, and the organic traffic with it. At least for a few months, if not for a year or more. In my opinion you're playing with fire. If the owner had already decided to change the platform, I'm now wondering if he doesn't want to lease it to offset his losses while the search engines sort it out.

Thanks for the feedback here. I will check into the details of the site upgrade to determine exactly what is the story.

Any update?

Changing the site is about the dumbest idea I can think of. Assuming the numbers he told you are true, I would not touch the design. It's working well, leave it be.

Up until you posted about that, this deal was a no brainer (assuming the details were correct and he wasn't full of bs)