Website Shares - Investing In Websites

There are various strategies in building an online income, and one such method is to acquire an existing website and improve it. Websites exchange hands every day, from small sites that cost a few hundred dollars to full blown e-commerce shops that can go for hundreds of thousands of dollars. Naturally the more expensive websites tend to have more traffic, generate more revenue, have more stability and more potential. However most of us aren't in a position to acquire sites of this caliber.

This is where the concept of pooling together funds or syndicating websites becomes interesting. $100 wouldn't get you very much alone, but with 1000 other people, all of a sudden it becomes possible to acquire a well established website and have a share in it. The beauty of investing in websites is that with a manager with the right skills and experience in online marketing, you can improve the traffic & revenue whilst at the same time increasing the resale value of the website.

The cost of an established website can be affected by multiple factors, but you can typically expect to pay a year's worth of profit. That means, if you invest in an established website and the earnings don't increase at all, it would take a year to break even and then anything from that point onwards is profit and you still own your share. I think that last part is really important because it essentially means you own a part of the website.

Here's another way to think of it. If you put $100 into a 1 year fixed term deposit at 6% pa, then at the end of the term you get $100 back, an extra $6 from interest and there's nothing left in the account. Investing in a website however, after 1 year you get your $100 back, but there's still $100 (your share) left in the account! This is a scenario where there is zero growth in the website which is obviously not the goal of the manager.

I personally believe that for small and medium investors, this is the only way to go. It represents minimal outlay but an opportunity for tremendous growth. Large investors could probably buy an established site outright and wouldn't need shares - it's really just a straight up acquisition like when Google bought YouTube.

I want to trial this concept and build a case study with a view to expand into something bigger. So I'm offering 1000 shares in a $10,000 acquisition - 1 share per member for the first 1000 that sign up. Once 1000 members have signed up, I will start looking for potential targets and you can follow me as I work on the site, just like the other sites you will see here. You can probably help too if you want to have a hands-on role and be a part of the growth!

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