The internet market has evolved radically since the late 1990’s with the field of SEO or keyword optimization serving as one of the most difficult or abstruse areas for investors to get a handle on. However, I am very optimistic about the future of the industry and would suggest this area for investors that require a home based business.
My feeling is that one could liken or analogize the trends within the internet markets for the past two decades as being similar to any flight to value on the part of investors. Originally, much lower thresholds for competition existed. I believe there are still many strong opportunities for investors to experience economic gain. However, as with the western migration in the history of the United States, many preceding investors have already made the journey westward to experience their manifest destiny. They have staked their claims on key pieces of internet real estate.
The single most effective strategy for competing in a more mature internet landscape is to look for those web opportunities that are more niche based. This can often more granular industry key terms where larger existing internet players have not yet occupied the real estate or established a firm hold of the key term rankings. A good example may be the one of an investor looking to enter the kids bedding market. While this key term is already dominated by some major players, one could have success by focusing on a sub-segment of that market. This might mean developing a site for just “kids teddy bear bedding”. Interestingly, while these markets may sound minute or inconsequential, there is dynamism in these smaller spaces. I would recommend performing the key word research to determine what type of key term volume certain niche terms generate but what kind of variability exist for variations of the key term. This may include things like “kids twin teddy bear bedding”, “kids teddy bear bunk bed bedding”, etc.
There are many benefits to this approach. In particular, the more specialized the websites the more favorable the sites will be regarding in the search engines. Remember the goal of Google is to provide the most positive user experience for any given search term. Therefore, the objective of a site owner is to provide that specialized and meaningful search experience to conform with Googles objectives. This comes through a quality site but also it all you products are kids teddy bear bedding related, your content is kids tedding bear bedding related, your meta descriptions are all the same, you are providing your visitor with this specialized website experience and you also make it easy for Google to recognize your site as a focused player in this niche industry. The other advantages are also management related, with a site owner having the ability to be merchandise within a more specific market and also design and manage a site that is more concentrated that attempting to spread itself out among too many product catagories or sub catagories. This is just as important for the consumer who does not need to comb through a lot of clutter to find the product or types of products they are looking for. Ideally while these sites are limited in terms of the size of their growth, I suggest having investors look building up a small portfolio of these types of assets to achieve higher overall revenues and cash flows.
The benefits of this portfolio approach are significant. First, it allows buyers to deploy their capital as they work their way up the intellectual learning curve. It also allows buyers to develop a more diversified basket of assets. I think this can be one of the most effective strategies for risk mitigation. Moreover, as any one website hits its maturation point, that asset can be divested and new sites either built or divested. There are also advantages in terms of scale. As the portfolio is developed one can build one central customer service to manage all sales and also leverage other resources across the sites.
I think the upper limit with a more granular site is several hundred thousand dollars per year in sales. I would encourage the acquisition of several of these sites over time to be run in consolidated format sharing the same basic fixed cost.