This website discusses domaining and the prediction of valuable domain names as well as discussing domain development opportunities.

Finding value in purchasing existing websites

by Barry on February 12, 2008

Existing websites can be a source of domain names with traffic or a website with greater potential and there are bargains out there.

Here is one idea:

  1. Start with a directory such as DMOZ or Yahoo directory so you know the website has at least one good inbound link and has been around for a while. DMOZ in particular is slow to give listings to websites so a DMOZ link can be a sign of age.
  2. Set a cut-off at no more than 5 pages on the website. This number is arbitrary but a website that has not had much care and attention should fall in this category.
  3. Group into one word, two word etc domains
  4. Start hand-checking the one word domains, then two word etc

It might even be possible to write a script to do this.

The goal is to buy under-utilized websites and either park the name or develop the website.

Handchecking

Here are some of the things you should do to check up on any potential websites:

  1. Check the WayBack Machine for the history of the website. Older is better usually.
  2. Check for back-links. You can use Yahoo Site Explorer to do this as it usually gives better results than using Google.
  3. Check the web-site’s ranking for the term in its domain name e.g. muffles.com, search for muffles. Check each of the major search engines.
  4. Check for outgoing links especially a links page. You can do this manually or spider the site.
  5. Check who owns the website. Use a public WHOIS utility.

Checking Links

Notice that I have said nothing about PageRank (PR). These days PR should not be taken into consideration as this is usually toolbar PR and is always out of date.

Quality in-bound links are what counts. These should be:

  • from relevant related sites
  • from a relevant related page
  • have relevant anchor text
  • should refer traffic to the site
  • have some deep-linking (links to pages other than the homepage)

These are the ideal criteria but many websites in this category will fall down on one or more of these.

Outbound links are less important because these can be changed if you buy the website.

Hidden ownership

If you do a WHOIS and do not find a name and email address but instead find that the owner has chosen to hide that information, you can still contact them. For example if they are using DomainsByProxy, look for the following:

Administrative Contact:
Private, Registration WebsiteName.COM@domainsbyproxy.com

You can always contact the registrar and they can forward your email to the owner.

Choosing between website and domain

Once you feel that the website is of interest, your next question is whether to develop the website or to scrap it and park the domain. There is a third option which is to point it to another website or domain you already have.

Developing as a website

You have to determine the potential increase in traffic you can reasonably expect. Factors include:

  • Competition
  • Number of searches done for the domain name term
  • Number of searches done for closely related terms
  • Ad inventory for terms
  • Conversion rate for these terms

If you do not want to build the site yourself, then you have to factor in the price of paying a website developer. The four factors that are most important as the “cost” of a website are:

  • purchase price
  • development price
  • maintenance (possibly your time)
  • advertising

You should weight that against expected traffic, growth in traffic and conversion rate to determine when it will become profitable. A draft business plan should be in place before you even purchase the site.

Keeping as a parked domain

Purchasing a website and parking the domain name is another option. The parked domain can benefit from its history as a website. If the website had inbound links, then some traffic may continue to flow to the parked page and you may find the page even ranks for some terms.

However you cannot count on those inbound links because they may disappear at any time as webmasters update their links. The main attraction should be the amount of type-in traffic expected. This may be artificially high as the website may have been bookmarked or visited by regulars. Upon finding a parked page, they may not return and so traffic may decrease quickly. This rapid decrease in traffic is especially true if the website depended on advertising for traffic.

Again the purchase price should be compared against the potential income and increase in value of the domain name over time.

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