Micro-niche AdSense sites are a popular thing these days. Every once in a while a gem of a site that is making $100-$500, and sometimes ever more, per month with practically no upkeep needed is offered for sale. One would think, it’s a good investment of 10x the monthly profit for something that is guaranteed to pay for itself many times over with almost no effort, right?
Wrong. Purchasing a site like that you would purchase something that has lost a lot of value simply because it was offered up for sale in the first place. Most likely, it will take more than 10 months to get the purchase price back and only if the buyer manages to fend off the instant competition of copycats and freeriders.
First things first, however.
AdSense micro-niche sites
AdSense micro-sites exist because of a couple of major flaws in Google’s ranking algorithm, but this post is not about that, I will get to that some time later.
The micro-niche sites usually target a “long-tail keyword” — a two- or three- or, sometimes, four-word combination that is a popular search term. The goal of such a site is to end up on position 1 in Google for that keyword and a few others. This is achieved by having a domain name that matches the keywords exactly, a few articles with just the right keyword density and a few links with the chosen keyword as anchor text.
Such sites typically have some correct, albeit useless or common knowledge, information about the subject; they are always made ugly as hell and in general, the purpose is to attract the visitors through manipulation — all legit and whitehat — of search results and send the visitor off as quickly as possble via one of the AdSense links, making money on those PPC clicks.
For such a site to be successful, it has to end up on position 1 in Google search for the main keyword. Some people target Yahoo and Bing, too, as a low-hanging fruit, but ultimately Google is the indicator of success.
Successful sites like this can actually make the owner serious money: it’s not unheard of to make as much as $1000 per month from a single AdSense site with just 10-20 articles on it and just a handful of incoming links. Rinse and repeat and you have some serious cash coming in for practically nothing, with not much maintenance needed other than some trivial ongoing link building, which can be outsourced for a fraction of the incoming cash flow.
The value of AdSense sites
So, one would think a successful AdSense cash cow is a great investment opportunity, right? Invest 8-10 times the monthly cash flow, kick back and wait for automatic profits to come in, right?
Wrong. You see, the only thing that is valuable about a site like this is the choice of keywords. They have to be popular, but the competition must be low and what’s present has to be weak. The subject niche has to be unsaturated. An exact domain name in the .com, .net or .org space is also important.
In order to find a combination like that, people spend a lot of time researching the keywords and lately, with a lot of folks doing that, good keywords are hard to come by. Keywords that not only fit all the above parameters, but also are in a high-paying niche — and that is very important, too — are super-hard to find.
Everything else about a site for sale that fits the micro-niche category is worthless and useless. Even the content, even if they are original articles, even if there are some links already built. All of that is trivial to do or can be outsourced for peanuts.
Let me stress this again: the only thing that counts about an AdSense site is the keywords.
Value lost
So, what happens when a site like this is offered for sale?
It’s value gets hammered down on day one. A myriad of copycat sites spring up like mushrooms everywhere. People don’t want to pay for something that they can easily make themselves, and the seller has given them the only thing they do need — good paying keywords that actually work and make money. Now, it’s just a competition in who can build a copy faster.
Of course, it takes some time for the new sites to get developed, indexed and linked to, but people, who are serious about it have all of that automated, outsourced and fed into a well oiled site creation machine.
In a month, two or three, the first page of Google will literally be littered with copycat sites and the original site — while still having a slight advantage of being older — will still need to compete not only with its original competition, but also with a zillion of copycats. Even if it manages to stay on position one, it’s value will be severely diluted by all the competitors. Chances are, too, that the competitors are going to be more successful, better linked and will knock the original site off the position #1 throne.
Along with the top position, the revenue will be gone, too. While the seller of the original site will have made money on the sale, the buyer will have paid for that and will have gotten something of a very questionable value in return.
Red microwaves are taking over
The following is an example illustrating all points above based on an actual site sale that happened on Flippa some 10 months ago, redmicrowave.net.
The seller claimed to have generated $400/month income and while I have my doubts whether that was the case, that’s beyond the topic of this article. Let’s assume that it indeed was for the purpose of this explanation.
According to the seller-provided illustrations — and I did verify those myself at the time — the site enjoyed an awesome position in Google with practically no micro-niche competition. Check out the screenshot below and see how Google’s page one only contained links to big stores, which generally aren’t serious competition. Click the image for a larger version.
So, what happened then? You already know, a million of copycat sites has sprouted probably before even the first comment was written about the site. Check it out for yourself:
Domain Name: RED-MICROWAVE.COM
Creation Date: 05-jan-2010
Domain Name: THEREDMICROWAVE.COM
Creation Date: 17-jan-2010
Domain Name:REDMICROWAVES.ORG
Created On:06-Jan-2010 03:29:26 UTC
Domain Name: REDMICROWAVEOVENS.COM
Creation Date: 03-mar-2010
Domain Name: REDMICROWAVE.BIZ
Domain Registration Date: Thu May 27 11:41:44 GMT 2010
Domain Name: REDMICROWAVEOVENS.NET
Creation Date: 05-jan-2010
It’s kind of curious why some of these appeared on Jan 5, when the Flippa auction says the sale was listed on Jan 6, 2010. I have two theories: the seller wanted to create a copy after having sold the original or — a simpler explanation and thus one that tends to be the correct one — Flippa’s Australian clock is simply a little ahead of the domain registrars’ American and European clocks.
What do we have in the end? The site sold for almost 10x the monthly income, as expected. Yes, someone has actually paid $4K for a site of a very questionable value and a very uncertain future. Not only that, there’s been a whopping 24 bids, so more than one person must have wanted the site.
Here is the screenshot from Flippa, click for a larger image:
So, it’s been 9 months since the sale. The new owner must have made their money back and is about to enjoy the free cash rolling in, right? Well, I don’t know — and I decided not to ask because I would have no way to verify anything. However, take a look at the first page of Google results for red microwave now, in late October of 2010, and see how many copies are out there. The nice keyword has been totally destroyed simply because it was published in the course of the sale.
The original site is still somewhere close to the top, so chances are the site is still making some money.
Honestly, however, it wasn’t the best way to spend $4K if you ask me. For the price, the buyer could have had at least 100 quality micro sites developed in the right niches and that would have included keyword research, articles, backlinking and all.
If at least one of those were as successful as redmicrowave.net before the sale — it would have been the same $400/month. There would have been no competitors, no keyword dilution and the future of such a site would have looked much brighter.
If you find this site useful or educational, I would appreciate you spreading the word. I am spending my time on providing what I think is useful information and a way for newbies to save some money. I also don’t get anything in return at this point: see how there is no advertising and I am not selling anything. So, mention this site on forums or click those Facebook like buttons, please.
