AdSense Arbitrage Website (+ X00% ROI) - what is the right price for it?

Just wondering.
Daily invest in AdWords: $200 (did not test with larger sums)
Daily output in AdSense: from $650 to $900

Avg. monthly clear profit = $17 250

Only one arbitrage competitor.

Providing:
1. Unique AdWords campaign (result of months of hard testing)
2. Ad Copies
3. Website (6 pages, plain html)

I'm interested about the value if:

1. I sell this and leave this market;
2. I sell this and remain in the market.

Don't post things like "It's amoral" etc. Post your suggestions only.
I'm not going to sell this site now, it's a well-established source of income and very fair ROI. But, who knows...

 

Do you do private lessons?

 

Yeah, but they're too expensive

 

Setup and forget websites can trade for anywhere up to 18 months worth of net revenue. But that's a very, very generalised statement. Some sell for a lot less, some for a lot more. Some of the factors that affect multiple are the stability of the income stream and the risks associated with the business. In your case I would suspect it's highly risky as Google is often believed to be actively clamping down on arbitrage models. Further, there is the issue of not being able to transfer either an Adwords accounts or an Adsense one. Setting up a new Adwords account could turn out to be a lot more expensive as it doesn't have a bidding history on the current keywords.

I would say 3-6 months worth of net income. I'm sorry but that's probably not what you wanted to hear.

 

Thanks Foggy. A few weeks ago I've got 2 offers for 65K and 80K respectively, and declined them. Perhaps it would be wisier to keep it.

 

So you got offered about 4-5 months earnings? Not far from my estimate

If I were in your shoes I'd hold on to it unless you needed cash urgently now. And, if you do need cash urgently - and would trade your business for it - PM me

 

Its worth next to zero (well a few hundreds if the content is unique) for a simple reason, you can easily setup same business after selling it.
Also, you can't offer any guarantee to a potential buyer. If the seller made no money, you'd tell him "sorry you knew the risk".

I suggest you take the $80K and run, if this offer was serious. An offer remains only an offer, until its been accepted and payment sent.

..... or you can trade it for a solid $80K website with SE traffic.

Cheers

 

homeloans1, a non-compete is generally par for the course when selling a business.

Hmm. SE traffic can disappear before you can say Google Algorithm. Free SE traffic is not a reliable basis for a business and is not sufficient grounds to pay someone $80K.

 

In my opinion the actual value is immaterial.
What does matter is that they are offering you only 4 months revenue and the questions are, can you wait 4 or 5 months and save the money or do you need cash right away?

If you need cash now, go to the bank with a solid business plan and ask for a short term loan, (maybe a year to be realistic).
If you have a good history, (the bank can see for themselves that Google has been giving you 17K for a few months), they will lend you the money like they do with any other buisness.
If that fails then you can always try and borrow from a friend/family, (you can show them that your business is stable).

Assuming that the site does offer such a good return you should be more than able to pay-back any loans you need.

Any site is worth at least 10/12 months, simply because there are other ways of raising funds. This is why I always apply the 12 x rev. rule.

FFMG

 

I'm sorry but I can't see any bank accepting that arbitrage model as a "solid business plan". Nor can I see them advancing a year's profits. If Google changes Adsense terms to ban Adwords arbitrage - which can quite easily happen - then whom does the bank recover its money from? In fact, that Adsense account could be banned even now as Google could argue it's an MFA site.

There's a reason why it's only 4 months rev... and a high risk even at that price.

 

I agree with you, but this is probably not the first risky business loans that banks get involved with.
The fact that the site is 4 months old will certainly be a factor, the rest will probably only mean a higher rate.

Banks loans to all kind of businesses, not all of them are 'sure things'.

FFMG

 

Nope. But every single one of them is made to strict lending criteria. If he visits his bank he'll likely find that this "business" doesn't qualify.

 

Arbitrage sites are not worth the same as an established site that get natural rankings or traffic. The model is much more easily duplicated and is profit is entirely subject to advertising costs - which can vary greatly. All it takes is a one or two sites to make the model lose money when ad costs are bid up by the competition. There is also a cash outlay required, which can be tens of thousands of dollars and there is a lag caused by the delay in payments. Trying to increase revenue can mean higher advertising costs which results in a lower percentage of profit. An established keyword list does give value, as well as the age of the model, but as Foggy stated, when the new owner takes over, he's not going to have the adwords history resulting in increased advertising costs until their history is established.

I have a friend who was generating over $10K profit mo from a similar size site up until a few months ago when ad costs increased and ate up most of that profit. It is currently making about 10% of the historical net income and the ROI has decreased substaintially (similar cash outlay for advertising, much smaller gross).

Non-competes are almost impossible to enforce which this type of business - the old owner could start a similar site with a private domain registration or under a company name (which the poster is also contemplating).

 

i am in then

 

I agree with homeloans1. 80k for this? Take it and run, Forrest... run

Adsense already wiped out 90% of the arbitrage sites out there. All it takes is a tiny algo tune up to get rid of the last 10%. Already rare to find someone willing to risk 80k on something like this... just want to see the look on your face when the algo updates again and you end up spending more than you earn and have to stop doing this.

 

I agree, take that 80k and apply what you learned in a new area, this type of thing ain't going to get a last and an offer like that is great!

 

Sorry to bump this, but why the hell would Adsense not allow arbitrage sites? You pay them, plus it generates more money for them when users click on ads at their sites....

 

quality is what matters to google

 

well I have an even dumber question here!

What the heck is an a Arbitrage site?

Ive just never heard the term

 

I think you paid PPC then hope visitor click on your adsense ad and you make the difference...like you find traffic for $.05 per visit and avg click for your ads are $.20 then you make $.15 profit..something like this..correct me if this is wrong..