Things to Watch for when buying an online directory.
April 19th 2007 Posted at Internet
Comments Off on Things to Watch for when buying an online directory. 
Sorry for the delay in posting. I had taxes and another ongoing dispute with another provider consumed my last two days. One of the things I have done in the past is build a web site (like thinkingmonkey.com) and then sell it. This is sometimes a tricky proposition. This post though is how to value the other end of the transaction, namely how to buy and make money with a small directory
Perhaps the easiest way to experiment with buying a web site is buy a small directory. There’s quite a market of developers who develop directories on top of either eSyndiCat or PHP Link Directory. The only problem with many of these sites is that the directories are that specific. Most of these developers just develop standard sites that are very broad directories without a specific focus. In my case I went ahead and purchased a general business directory called Online Business Directory. The directory ran me $175. This ultimately was the reason I decided to experiment with the directory. I was able to purchase a directory, fully developed for less than the amount of time I would have spent building one from scratch.
There are a number of places where you can regularly check to find a directory to buy. I would recommend the following sites to check out.
If a developer is actively selling the site, you will see the listing at more than one site. Look at the feedback the seller is getting on the site.
The Alexa Ranking is going to completely inaccurate.
Most of these developers are familiar with the various tricks to increase your Alexa ranking and are going to juice their sites accordingly. Even if the developer doesn’t juice his Alexa ranking, you can expect that any directory is going to skew toward webmasters (who are trying to build up the popularity of their sites) who also skew your Alexa Ranking. Just take any and all Alexa claims with a grain of salt. Look more at the site listing in Google/MSN/Yahoo.
Check to make sure the Page Rank isn’t faked.
Some developers will redirect the domain to a high Page Rank domain. A known loophole in the Google algorithm is that a web page that redirects to another web page will get the PageRank number of the redirected web page. A web page that redirects to Google.com will get a PageRank of 10 because web surfers that go to the redirection page will actually land on Google.com which has a PageRank of 10. Please note that this technique doesn’t actually change the Page Rank of the site, just what is displayed on the Google Toolbar. The owners of these sites are often in a hurry to make a deal since an “emergency” has come up. The age of a site and it’s Pagerank are going related so if you see a Page Rank that seems too good to be true for the age of the site, it probably is.
Use an escrow service or at least look at the iTrader rating of the seller.
No one likes to be taken advantage of in this situation so it would seem logical to make sure the seller has some track record. If not, then escrow the transaction. Most payment services such Paypal offer an escrow service so this shouldn’t be a problem.
Look for a Vertical.
Vertical directories provide the most value to users since they can be stronger on a particular topic than a general directory and can add real value to a user’s experience.
Check the history of the site.
Does it have cached pages? Is it indexed in MSN? Are there backlinks? How many sites link to the directory? A well indexed site is usually a quality sign.
Make sure to ask questions
What script was used? Is installation included? What are the current revenue figures like? (Be sure to ask for screen shots) and stats on traffic.
After buying my directory, I made a number of improvements on it to help monetize the site further. I will cover that in another post but any reasonable directory (PR 3 or higher) is going to have a number of sponsored links per month. While a small directory isn’t going to make you richer than Croesus, it should provide a steady income and assist in your link building efforts and get more than enough paid submissions to generate a steady income. You will need to promote and build links for the site like you would anything else but that’s all part of building a steady internet income.
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