Its fairly typical of the sites that are sold through Sitepoint and the like. The business peaked in 2006 and revenues fell for two years running - so it started declining before the owner fell ill.
It looks like it is recovering in the first two months of 2009, but it could also be a spike.
It also looks like it needs a fair amount of work to make that much money. So you pay somewhere between $120,000 and $160,000, give up your current job, take the risks entailed, work hard and you might make $100,000+ a year in revenues (not profits!). That does not sound like such a good deal.
In general, the difficulty of verifying the profitability of small sites means that no one will risk paying a high multiple for them. No one with a decent site will sell it at a low multiple, so if it is for sale, expect it to have poor prospects.
I think I'm going to try something like this. I've always felt dirty when entertaining ideas of information marketing 'businesses', but if it works, it works. I'll see if I can do it all with outsourcing (minus the actual site), so, outsource the marketing copy, the product design, the customer service, the order fulfillment (or automate it), the marketing/selling.
It looks like the only trick is to A: automate it, B: get a targeted, under served niche, and C: get a good marketing copy made and an affiliate system. It will be an interesting experiment.
I'll report back after I'm making > $10k/month and living in Fiji.
(This isn't entirely directed at you, but is more for general consumption. Just picking up on a feeling I got from your post, though.)
You seem, to me, to feel that this is primarily a dirty sort of business. It's not (even though there are dirty players) and it's becoming a lot less dirty all the time, since people are becoming smarter at what to buy and not.
If you have specialized knowledge and can help people solve a problem or learn something they really want to learn, you can honestly and sincerely produce a product, an e-book, a real book, a video course - whatever - and sell it for a profit. Nothing dirty about that, and the more sincere you are nowadays, the better you'll do.
The "information" business is no more dirty than any other business. Do the majority of sysadmins do it other than for the money? (No) Do the majority of journalists write pro bono on the side? (Nah) Selling information is no dirtier than selling your time and, heck, I've seen just as many passionate and decent people in the info game than elsewhere.
Oh, and don't outsource the "marketing copy." It's your personal voice and the personal connection your potential customers will feel for you that will "sell" your product. You don't want to be wasting time "convincing" people to buy - you want to seem authoritative enough and so trustworthy that people are begging to see more of what you have.
P.S. You might enjoy looking into something called the "underachiever method." It'll provide one of the best ways to establish what it is you should be producing. It was a course once upon a time but you can get all the core ideas for free with a bit of Googling :)
I Googled a bit and the "underachiever method" seems to be
1.) Pick niche
2.) Put up survey finding out what questions people most want answered in niche.
3.) Use Adwords to bring people to survey.
4.) After you've collected results, write eBook that answers questions most asked.
5.) Sell eBook
6.) Profit!!! :)
Do you have experience with this method, Peter? Does this actually work? It seems that the recommended sample size of the survey I saw (50-100 responses) would be too small.
Also, how could you be sure that just because people say they want answers to these problems that they'd be willing to pay to get them?
I'm fascinated by this whole info-marketing thing in that I can't believe it actually works yet a lot of folks seem to be doing it profitably. I'd be interested in any insight you have on this.
I was surprised once, but I think that's a natural reaction for geeks. It's hard to really get a feel for the general economy and what the average Joe wants.
Just because I don't buy anything from spam, would never buy food from a roadside stall, click on banner ads all day, or go do drugs or whatever.. doesn't mean the majority of the world isn't doing all that stuff each day :) Once realized, it's a pretty powerful thing.. yes, you can produce some really odd stuff and it will still sell!
The underachiever method is really just a market research technique that someone gave a name and made money from. As a market research technique, though, it works. It's just a variation of asking people what they like and then providing that.
It's better, though, because you've actually picked up people from Google who, in the main, were ready to buy! (Or at least read what you had to say about a product.) The opinions of these people are far more important than just general opinions from the market. These are folks with problems who are ready to put down cash to read stuff that will help them out.
The number of responses is small in a classical market research sense, but that's why it's usually done in a very small niche. 50-100 responses to, say, "Why do you want to learn French?" are going to provide enough of an indication of the general market groups.. expats living in France who want jobs, kids at home doing homework, rich guys wanting to pick up chicks in Monaco, etc. These answers can then significantly direct your product.
The alternative is to just build a product then hope the people clicking on your ad want to buy it. Doing even basic market research with something like the underachiever method will put you streets ahead of that point by at least giving you an indicator of what even a small group is definitely going to want to buy.
Thanks for taking the time to respond. I really appreciate your insight on this. I've found a copy of "The Underachiever Method" online and plan on checking it out.
Thanks a lot for bringing that up. I suppose it's not the information marketing sector I feel is dirty, but the subset of that sector I've seen that sells courses on how to sell courses, promising to make you rich if you only "follow the 7 easy steps outlined in this course!"
Of course the rest of the sector is essentially ebooks and supplemental material. That's not too far removed from regular books. As long as I don't have to use fake testimonials or spam email lists then I'll be alright.
The 'trick' is not automation, the niche, good copy, a good affiliate system or a kick ass site design. It's traffic, and the 'trick' to traffic is incoming links. All these sites for sale rely on a webmaster who can understand and temporarily exploit Google's ranking algorithm. Without that you'll have a great site that no one goes to (and makes almost no money as a result)
I might chose something I have a little experience in, or just something so targeted that it has to work. I'll probably end up where experience and focus meet.
Or... I could turn to the wonderful HN community for ideas. Any takers?
Actually, understanding statistics is something I might be good at teaching. Maybe we could focus it even more than that. Maybe it should be "how to pass college statistics," or "statistics for scorekeepers."
I'm slightly competent in statistics but I've always wanted a deep, intuitive understanding of it. So I can just hear a problem and say something like "oh, just do a t-test".
So I figured as long as I spent all that time gaining that level of knowledge I might as well write an ebook :-)
Passing college statistics might not be catchy enough. It has to be "sleazier" like how statistics can help you in every area of your life ... somehow.
Parrots and Oil Painting... niche markets that couldn't be further from web 2.0. The majority of the population with high levels of disposable income, and the will to spend it (soccer moms, retirees, busy non-geek professionals etc) are not catered for. It is a massive, untapped market.
In the right sidebar there are screenshots of traffic stats, accurate sales figures. Found this very interesting after wondering if a parrot book site could really make that much.
I think people would search for 'help' when their parrot is misbehaving, but 'techniques' when they want to learn how to paint.
Also, beginning/intermediate painters may very well be interested in becoming good enough to sell their work. As such, they might invest in lessons/ebooks, which could garner better conversion rate.
LIMITED OFFER: Buy snake oil instructions for growing your own snake oil business.