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Old 09-28-2009, 04:29 PM   #21
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Originally Posted by Arif View Post
One "investment" that looks interesting is buying websites that produce monthly income from advertising. Anyone have experience buying websites/forums? I'm primarily interested in the consistency of the monthly income from advertisers and typical expenses.
I don't know anything about this industry, but the revenue stream that you are contemplating purchasing strikes me as somewhat ephemeral.

Presumably you would be buying a website that has been up and running for some time, generates so many 'hits' a month, and has one or more advertising contracts in place. But what happens if the vendor simply starts up a competing site? I guess you could always insist on a non-compete agreement, but it might well be difficult to police; and aside from the vendor, there are countless other people who can easily compete with you by setting up rival sites.

“In business, I look for economic castles protected by unbreachable ‘moats’” -Warren Buffett. With a few rare exceptions, a small website is unlikely to meet that test.
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tax deductible as business expense?
Old 09-28-2009, 09:10 PM   #22
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tax deductible as business expense?

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what kind of site generates 500-100-$1500/month in ad revenues? Or is the money made by having 300 sites each generating $20 a month?
Without a ton of experience here, I can make some suggestions where you might look to find the answer: SitePoint.com, DigitalPoint.com, and WebmasterWorld.com.

You could try shopping around as if you were going to buy a website, and if you ask enough of the sellers, I'd guess that you'd be able to get a ballpark figure of what types of sites generate that revenue.

I'm not sure whether 300+ sites is the answer, but consider that you'll probably spend more on hosting and managing 300 sites than carefully building a smaller set.

I'm curious to find out if it's worth declaring oneself as an LLC and declaring the costs of website operation as tax deductible. Would anyone know off-hand?
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Old 09-29-2009, 09:30 AM   #23
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I'm curious to find out if it's worth declaring oneself as an LLC and declaring the costs of website operation as tax deductible. Would anyone know off-hand?
If you run your site like a real business, then the costs are deductible anyway. The LLC just gives your business limited liability and protects your personal assets in case of a business lawsuit. Otherwise, if you your business is sued and you are operating as a sole proprietorship, you could lose some of your personal assets, like the equity in your home.

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I'm not sure whether 300+ sites is the answer, but consider that you'll probably spend more on hosting and managing 300 sites than carefully building a smaller set.
It is often a good idea to have a mix of different sized sites, because sometimes the Google algo favors niche sites and sometimes larger sites get more of a boost.
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Old 10-05-2009, 09:41 PM   #24
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If smaller means niche, it seems like it would be easier to start by breaking into more numerous smaller markets before going after a large one with a big site.
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Old 10-05-2009, 09:48 PM   #25
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Here is an article I really like about the Mega Niche.
Wired 14.11: Tiny Slice, Big Market
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