Before You Sell Your Blog…
November 23rd, 2007 by Court
The recent update of Google toolbar PageRank has increased the perceived value of quite a few blogs, and has caused a sell-fest. This week I reported that CashQuests.com sold for $15,000 and I know of quite a few other blogs that sold for prices between $2,500 and $14,000.
Starting a popular blog that can be sold has become a trendy business model. Using this method, a person can get their hands on $10,000 without too much trouble, assuming they have enough skill to build a blog of this caliber or perceived caliber.
$15,000 is a load of money to get for selling a business right? I’m not so sure. Kumiko sold CashQuests because she didn’t have the time to dedicate anymore. I’m ok with that. If she had sold it just for the money, I would have been upset.
Four Reasons It Wouldn’t Make Sense To Sell For The Money
- 10x Monthly Earnings Is A Weak Multiple
- Having A Reader Base Allows For Accelerated Growth
- Search Engine Traffic Gets Easier With Time
- Internet Growth Is Exponential
10x Monthly Earnings 2x-5x Yearly Earnings
The only reason that these sites are being sold for 10x monthly earnings is that the earnings are microscopic from a business standpoint. These sites are being sold to individuals instead of companies. Give a site like CashQuests.com two more years at its current growth rate, and it could probably be sold for at least 2x-5x its annual profits to a company. That’s over $35,000 calculated at its current profit level and would be over $100,000 if CashQuests grew even moderately well. Later on, I’m going to talk about why CashQuests could easily be worth over $300,000 in less than two years.
Reader Base Allows For Accelerated Growth
Let’s take a look at some of the significant factors that resulted in CashQuests being sold for $15,000:
- 900+ RSS Readers
- 20,000 Alexa Ranking
- PageRank of 5
- 16k Unique Visitors Per Month
- $1400 Per Month Income
Since my RSS count is pretty close to the CashQuests count, I can tell you from experience that getting new subscribers only gets easier the bigger your count gets. With a new site, Kumiko could probably repeat her feat and get 900 in the next year. Let’s say she’s learned some new tricks during this last year and can build 1500 RSS readers from scratch during the next 12 months. Compare this to the number she could get in the next 12 months while starting with 900, and the sale starts to make a lot less sense.
Without question, with Kumiko’s talent and a base of 900 subscribers, CashQuests could have hit 4,000+ RSS in the next 12 months. This is going to give her roughly four times the current monthly earnings taking her to over $5,000 per month and a blog that’s worth $50,000 at even 10x monthly earnings. Bigger numbers can get her a higher multiple since it gets into the range where a business could buy her out. 2x annual earnings gives her $120,000 and 5x annual earnings gives her $300,000.
I don’t know if it’s even worth selling at that point because within a few more years you could be talking about retirement blogging.
Search Engine Traffic Gets Easier With Time
I can tell you that right now, CashQuests isn’t getting the search engine traffic that it deserves. I’m going to guesstimate that the site gets less than 100 search engine visitors per day. This is because the domain is still very new. The site was moved from kumikosuzuki.blogspot.com less than six months ago. Give this site another six months and the search engine traffic will grow exponentially without making a single change. It could be argued that right now is the absolute worst time to sell because time is starting to work in favor of the site.
Internet Growth Is Exponential
I can’t even begin to tell you how much easier it gets to grow when you already have an established site. During the first 4 months I had this site it was almost impossible to generate any buzz. When no one knows about you it freaking blows. You can write the most stellar post that has ever been written and it doesn’t matter one bit. No one is going to read it or link to it. Write the same post when you have a reader base of 1,000 and it might get linked to 50 times. Write the same post when you have a reader base of 30,000 and it might get linked to over 1,000 times.
In A Nutshell
Time is your friend. Starting over is your enemy.
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November 23rd, 2007 at 2:50 pm
Thanks for the tips!
November 26th, 2007 at 9:28 pm
well it’s not tip to sell your blog actually
i though courtney will tell us some tips to sell our blog, since i’m getting tempted to do so :p
November 23rd, 2007 at 3:17 pm
I think the same. Her blog has come to a stage where exponential growth is one step forward. Anyway court, thanks for your encouraging post, as my blog is 4 months old and it is good to see that if i keep blogging i will be rewarded in the mid-term
November 23rd, 2007 at 3:25 pm
Great points Court.
At the same time, it’s hard to say if a blog by another person will continue as well if you buy it from them.
My best wishes to Kumiko and the new buyer.
November 23rd, 2007 at 3:33 pm
Very true James. It will be interesting to see how CashQuests works out for the new owner. It won’t be as easy as it would have been for Kumiko.
I feel the same way, I hope that they both do well.
November 23rd, 2007 at 3:32 pm
Great post. This conveys most of the thoughts that I have had about selling a blog or a web site. Its just a matter of investing the time in turning the site from run by an individual into a potential asset for a company.
November 23rd, 2007 at 4:02 pm
Court, thank you for expressing my thoughts. Although I’ve been online for over 15 years, seriously getting into blogging is new to me, and due to WordPress and BANS. I can do what I want due to powerful s/w, and along the way, make some money. AND meet great peeps!
I first read about this sale on another of your postings. I immediately thought: wait, I read a few blogs wherein people are making 4 or 5 figures a month. Most make less than because it takes time and work, and more than anything, passionate intelligent dedication to get to that point.
I’d think the seller made very little when you calculate all the hours, research, coding, etc that went into that site to get the stats it was getting.
Would I let go when the blogsphere is really taking off? I firmly feel WordPress and BANS are changing the way people approach the net and we’re entering a new era.
But I don’t know the circumstances behind this, nor is it my business. I often think about a rock photographer, now deceased, who sold his archive for a mere $5,000 some time in the ’90′s.
He certainly could have made that money licensing to Rhino Records, who created many boxed sets and licensed his photos from that agency.
They made that money back many times, probably licensing within the first year of acquiring his work. They also currently sell his photos as giclees on eBay. BUT they never credit him, not licensing nor selling. Peeps are using his work and have no idea who took the photo.
But the photographer didn’t have the health nor desire to monetize his archive. He wasn’t computer literate, few photographers were a decade ago, and that makes all the difference in the world. I’m grateful, because whenever I see his photos, I’m reminded of him.
But at the same time, that sale devalued other archives, and dissuaded other photographers from dealing with that agency. Photographers who knew the details wouldn’t go near that agency. They wooed me, and I wouldn’t do it. Use my work and not credit me and pay me a fraction of its worth?
The agency recently merged with one of the largest photo agencies in the world. Do I have regrets, now that they merged with the number one photo agency? No, I always follow my heart.
But I’m not him, nor the blogger who sold her site. I agree with the others, best wishes to the seller and buyer.
Thanks for your sage and eloquent post on this subject.
November 23rd, 2007 at 5:36 pm
Wow, that really is an incredible price to be selling a site with those stats for. Where was this sale advertised? I wouldn’t mind purchasing a site of my own for a similar price – seriously. With those kind of numbers on a 6month old domain, that is a value proposition.
November 23rd, 2007 at 5:40 pm
It was actually advertised on SitePoint! Here’s the URL of the auction:
http://www.sitepoint.com/marketplace/auction/16162
November 23rd, 2007 at 5:54 pm
Hi Court,
You said: “I can’t even begin to tell you how much easier it gets to grow when you already have an established site.”
My question is:
How can I have an established site? I write posts which few people read them at the moment. Posting and posting is not the solution. How can I change the way things flow?
You may answer me: Get more traffic. But how? I sent my comments to all blogs at your D-List. I also included my site in all the directories you recommended. What’s next?
Please, advise.
November 23rd, 2007 at 7:36 pm
Hi Kersson! Let’s start with this:
Who is your target market?
How are you appealing to that target market?
November 23rd, 2007 at 8:23 pm
Companies and people from South of Spain are my target market.
I am appealing to that target market by offering a place free of charge where companies and people can make their names known.
November 23rd, 2007 at 8:39 pm
I would say that you need something more to get people there. Let’s say that I lived there and wanted to list my company.
Even if I listed my company, that doesn’t mean that I would be using the site everyday. You need to find something that will bring people back everyday. Maybe you could have a blog that talks about different stuff that’s going on in the area. You could cover activities, places to eat – things like that.
I would probably follow a blog in my area that covered everything that was going on, but I personally wouldn’t use a site that just listed all the businesses in the area.
November 24th, 2007 at 2:04 am
Court, it’s not just listing the companies in a particular order but allows users to search for them. You get only what you are looking for.
I already use a blog that talks about different stuff that’s going on in the area. I talk about activities, places to eat and things like that. I thought about the same idea as you suggested me.
November 25th, 2007 at 4:13 pm
Ok Kersson, where is this blog? I can’t find it on your site…
November 27th, 2007 at 12:42 am
Here:
http://www.kersson.com/articles/article-list.aspx
November 23rd, 2007 at 5:55 pm
This is a most interesting post. I am getting 40 to 50 visitors a day from Google. Are you saying that I don’t have to change anything and I will get more of Google as time goes on? I hope so.
It is definitely true that RSS readers go up the more you have as I can tell that is true. Now that I am over 200 in RSS readers sometimes I gain more on days I do nothing than days I make a post.
Your post here is the kind of thing that keeps me going and makes it hard to quit after putting in so much time.
DayJobNuker
November 23rd, 2007 at 7:40 pm
Hi Bruce,
In a lot of ways I am saying exactly that. While it’s very possible to do well with a new site, an old site will outrank a new one if everything else is the same.
Vic is getting a ton of traffic with bu.bulicio.us and his site is only four months old. If his site was fourteen months old, he would be getting even more traffic.
The interesting thing that happens with a site that has RSS is that as the RSS count grows, the links to each post grow. This will also work to your advantage over time.
If you keep doing the exact same work you’re doing now, your results will increase by themselves over time.
November 23rd, 2007 at 6:46 pm
A bird in the hand is worth two in the street. There’s something to be said for cash in hand now vs down the road.
I pray the circumstances for the seller improve.
Life is about making the best of here and now.
Fascinating to review the growth of a blog, its present and potential future. Good analysis.
Now go take a walk, get some fresh air and make the most of each moment. Advice that’s easier said than done for many of us!
November 23rd, 2007 at 8:42 pm
There is something to be said for getting the money now, I agree with that. I don’t know if Kumiko really needed the money though, she said that she no longer had the same amount of time to spend on the site.
November 23rd, 2007 at 7:55 pm
You are so right. I am just now seeing an increase in daily visitors on my other site. I have been blogging there part time for 9 months. When it takes this loneg – it is hard not to give up before you see results.
November 23rd, 2007 at 7:59 pm
Court,
You said: Vic is getting a ton of traffic with bu.bulicio.us and his site is only four months old.
My Question: I have heard a lot about Google Sandbox, and that almost all new domains are put into it for 8-12 months. IS Sandbox a reality.
It is relevant here because if Google Sandbox is a reality and new sites are put on probation for 6-12 months, then off-course the sale of CashQuest was ill timed.
November 23rd, 2007 at 8:50 pm
Yes, the Sandbox is a reality. This doesn’t mean that every site is placed in it though. I don’t know if CashQuests was in the Sandbox or not, but comments that Kumiko has published on the site have led me to believe that the search traffic isn’t there.
Since the site has pretty decent authority, it seems likely that it’s in the Sandbox.
November 23rd, 2007 at 10:12 pm
Court,
Is it also true that as many as 90 – 98% of the new domains find their place in sandbox. I am asking this because my new blog webtoolsandtips.com seems to be in the grips of sandbox, although I have not yet done anything to annoy Google.
If yes, then how Vic was able to generate so much traffic in initial stage. Vic may like to answer that. I know Vic is a frequest visitor to CourtneyTurtle.com and also a collaborator here.
November 23rd, 2007 at 10:30 pm
I don’t know that 90% of new domains get sandboxed, but 90% of new domains never get enough authority to get ranked well.
You don’t really have to annoy Google to get placed in the Sandbox. If you get ranked for a competitive term early you could end up there. This doesn’t mean that it’s the end of your traffic, it just makes it more difficult.
Vic creates about 10 times more content than everyone else and also writes about topics that a lot of people search for. The content he has one his site is probably searched for 1000 times more often than the content on my site.
Sometimes sites about internet topics (like mine) think that the universe revolves around them. We are actually a very small percentage of internet searches.
Most people don’t know anything about the internet and search for stuff they see on tv, in magazines, etc. This is why Vic is able to create so much traffic – he knows what to write about.
November 24th, 2007 at 10:13 am
Well said Court.
I appreciate your views and that is the reason I have been closely following CourtneyTurtle.com for the last three months at least. Although I have started interacting only recently.
Court, could you visit my blog and give a tip or two on what I can do to improve. I value your advice.
November 24th, 2007 at 10:07 am
My take on the ‘sandbox’ is that it’s the effect caused by several Google algorithms that are designed to prevent sites with limited authority from gaining a high result placement for common keywords. It isn’t one specific equation but a combination of several factors.
You can quickly rank for less common keywords and long tail searches because the ‘sandbox’ algorithm isn’t a significant factor there. Remember that these can represent a substantial amount of search traffic, in my experience about 100-500 uniques a day with rather limited content (under 100 pages). With a larger site like Vic’s, you can multiply this out several times.
November 23rd, 2007 at 8:35 pm
It is easier to make money if the blog is already established. But what usually is the norm for that? Months or years? Just wondering.
November 23rd, 2007 at 8:53 pm
It tends to get easier at about the one year mark. This doesn’t mean you can make a lot of money before that though. With enough content and authority, you can get a ton of traffic right off the bat.
November 23rd, 2007 at 9:23 pm
Court, I thought the same thing! Kumiko’s site would have only continued to grow, and so would her earnings. As her site became even larger she could have made $15,000 with earnings on her own in no time. I think she did experience a loss. If it had been in that position, I don’t think I would have sold even if I did have less time on my hands.
November 23rd, 2007 at 9:26 pm
It seem’s like alot of bloggers are selling out as of now like a trend or something of sorts.
Seeing what most of them report as their monthly income compared to the selling price makes little since to sell out.
They could make much more in the long run if they would continue blogging.
From what I have been reading from some of them the google pr drop has had an influence on it.Why only they know the answer.
Steven
November 23rd, 2007 at 10:12 pm
Courtney,
I agree with you, there is far greater potential long-term in most cases. I guess everyone has their own situations and reasons that cause them to sell. Yes, $15,000 is a lot of money, but when you consider how much time has been put into growing that blog, it’s really not that much. A lot of the hard, less rewarding work is done in the first few months. I think it’s difficult to put a price tag on that.
November 24th, 2007 at 12:03 am
I supposed waiting for a little while will probably help to generate much much more than she is getting. Just my 2 cents!
November 24th, 2007 at 4:14 am
This is a very interesting post. I have read many blogs championing the fact that Kumiko was able to such a price with a 6 month old blog.
Maybe this was Kumiko’s plan from the start with the new domain. CashQuests.com is very generic so would keep her options open.
If I could build my blog to be as popular as Kumiko’s was/is I think I’d rather sell my Kidney than let go of the blog.
When you take into account the hard work and time you have to invest into building a popular blog I don’t think $15,000 is a great return, especially if you consider the long term income Cash Quests could have mad Kumiko.
November 24th, 2007 at 8:23 am
I think when someone wants to sell off a blog, say for $15,000, he or she probably has a good reason for it. The blog may be worth more later on but sometimes circumstances may force a person to sell off right now rather than later. I’m sure monetary consideration has been weighed with due diligence before any action is taken.
November 24th, 2007 at 1:20 pm
For some people probably $15, ooo is a lot of money. But the question is whether kumiko can maintain her blog? And would people willing to pay her the amount as what you’ve worked it up to be 12 months down the road?
November 24th, 2007 at 7:38 pm
[...] caught a great post on Courtney Tuttle - Before You Sell Your Blog where Courtney talks in detail about the ramifications and why it would not be a good idea to sell [...]
November 25th, 2007 at 12:53 am
I don’t intend to sell my blog.
I love blogging and helping others bloggers as well.
If the offer is right maybe 3 years down the future and then I’ll consider it.
Good observation btw.
Cheers,
Carlo
November 25th, 2007 at 9:32 am
[...] Before You Sell Your Blog… - Court explains why you shouldn’t sell your blog unless you really need to. [...]
November 25th, 2007 at 12:28 pm
[...] Courtney Tuttle has advice Before Selling Your Blog… [...]
November 25th, 2007 at 10:32 pm
Selling blods who would have known…http://www.livingeasyat40.com
November 26th, 2007 at 2:45 am
Thanks for this wonderfully and well worded article. I have been training entrepreneurs how to utilize a blog, so let me congratulate those that are sticking to it. In my statistics out of 10 people who start a blog only 4 will continue it through 3months. Those of you sticking to it you will see results over the long haul. Thanks for putting the time into this article I hope that this will save someone from dropping their blog.
Megan Vaillancourt
http://www.PassportMentors.com
November 26th, 2007 at 6:45 am
[...] This lead Courtney to write a blog post entitled before you sell your blog. [...]
November 26th, 2007 at 12:28 pm
The beginnings of search engine traffic begin with keyword selection and good placement in your articles and titles. Like you said, the longer your site is in existance, the more traffic Google will be willing to throw your way.
November 26th, 2007 at 4:14 pm
[...] This lead Courtney to write a blog post entitled before you sell your blog. [...]
November 26th, 2007 at 6:59 pm
Agree.
I’ve had numerous offers from people wanting to buy my blogs and websites, and I’ve yet to sell one, even a site I haven’t worked on in a year or more.
Why?
1. The site still makes me at least some money from Adsense or affiliate programs
2. I may want to go back and work on the site some day, and it’s a whole lot easier getting an established domain with existing links kickstarted than a brand new site.
Also, the 10 months earnings people get is kind of ridiculous if you have a site where you know the income isn’t going to go anywhere. Why sell a site that makes me $2,500 a month for a measly $25K? Especially given the site will be making even more 10 months into the future if you know what you’re doing.
Anyway, if you’re burned out on your blog and want to sell, you might just think about hiring someone to post for a while. Or hire someone to write the articles you submit for links or whatever. Do what you have to do to keep it fun, but don’t just sell a blog to make a quick buck. Hold for the long term and eventually 15k will be something to sneeze at.
~annie
November 27th, 2007 at 6:44 am
Thats very interesting but i think paying for 10 months income for blog its too much.
December 1st, 2007 at 7:37 am
[...] Before You Sell Your Blog… – Court’s postings often leave my jaw on the floor but this one is even better than the normal in my opinion. There’ve been a lot of public blog sales lately, especially since the latest Google slap it seems, and while some of the dollar amounts may sound decent on first glance Court explores whether the sellers really got the better end of the deals or not. A good piece to digest if you even think you might one day sell your blog. Bookmark at:StumbleUpon | Digg | Del.icio.us | Dzone | Newsvine | Spurl | Simpy | Furl | Reddit | Yahoo! MyWeb Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. [...]
December 6th, 2007 at 9:17 am
Interesting points you made. But Kumiko must have her good reasons why she has to sale and as you mention “Timeâ€. You failed to mention or look at worth time now or find out what she will be investing her time now and in the future.
December 13th, 2007 at 8:25 am
Excellent insight about selling blog. IMO whether is good for the owner to sell or not is depend on the knowledge about what she know about blog asset values couple with the reason she wanted to sell it. if we have those two information then we know how to evaluate whether she make the right decision or not.
Anyway whether it is right or not to sell i believe if she can make the blog famous she could do that again. with USD15000 in hand she could make it even faster then the first one. so all the best to her.
October 22nd, 2008 at 11:51 am
Thats a pretty good advice, i especially liked the part about the web’s exponential growth… come to think about it its true actually
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