State of the Spam Site

As long as there is money to be made from putting content on the Internet there will be blackhat spammers. Blackhat spammers of the past are the ones that tossed up that site of jibberish, full of ads. They're the scourge of Google, hated by Matt and Jeremy. Of course, I've never done this... haven't even tried... ok, there was that once, but

A couple of the more notorious black hats these days are Dave Naylor (Dave N) and SEO Blackhat. These guys make a living on understanding search engine algorithms and manipulating them to gain traffic across their sites. They do not value a domain, or web host as much as most webmasters because they're always trying new things, getting booted, and moving on to the next. When they hit - they hit big, make a few bucks for a few months, get banned, and move on.

Blackhat spammers are the reason that it takes most sites a long time to get decent rankings with their sites these days. Recent algorithm changes in Google, and to a lesser extent, Yahoo, have made the tenure of a site on the web an important factor. The longer that your site has been around, without being flagged as spam, the more likely that the new content you put up will rank well.

Because of this fact, a growing trend is to purchase existing sites, and site valuation is becoming more of a science than the art that it was in the past. Black hats are the first to catch onto this trend, and snapping up old sites because they're at the forefront of the algorithms. SEO blackhat put up a very interesting post about his current strategy of buying Google's trust.

If you could come up with hard and fast rules about how much to pay for a site based upon longevity, alexa rank, pr, and size, you could have a very nice little long term business. I firmly believe that domains are the new real estate, and the internet is a solid investment vehicle that's currently under-valued. Like all good investment strategies this will only last as long as it's relatively under-the-radar. Once it gets on the average Joe webmaster's screen, the bubble inflates and pops. Or at least, evens out.

Watch the black hats - much like the porn industry, they're always at the edge. Bleeding first, so the rest of us can learn what works, and what doesn't.

TG

Preparing for the Oscars

Hollywood Blvd is a ghost town. Very strange... where are the sirens? where are the honking horns? I'll tell ya - they're all a few blocks over on Sunset and Santa Monica, because Hollywood Blvd. is already pretty much shut down to set up for the Oscars. I'll try to get a couple of pics of the setup later today.

You know you have too much money when...

You know you have too much money when you offer $1,000,000 to have Donald Trump put a rubber glove over his head and blow it up on national television...

 

Welcome to Mr. Cuban's world: http://www.blogmaverick.com/entry/1234000097073558/

 

Big Love movie premier

Movie premiere of the movie Big Love at the Mann Chinese. I had never heard of this movie until just today...

The Mann side of Hollywood Blvd is shut down to passers by because of this premiere... just two days before they shut it down for a week to set up for the Oscars.

I'll try to get some good pics of the Oscar setup - it's usually pretty interesting to see what goes on behind the scenes of this award show.

Putting a Value on a Website

Thinking about selling your website?  How do you put a value on it?

Thinking about buying a web site?  What is it worth?

 

This is an excellent question, a tough one to answer.  I've been a student of this question for quite some time, since I've always had dreams of selling my web sites for way more than they were worth.  There are all kinds of wildly ranging thoughts on the subject of web site valuation, because it's such a new and complicated idea.  Traditional business valuation doesn't cut it because there are a lot more factors...

 

Stuntdubl does a thorough job of explaining the ins and outs of web site valuation.  He goes over different types of websites, how they generate their money, and what questions you should ask yourself about their operation.  He also goes over the various generally accepted methods of valuation.  There are some links to online tools that will help you uncover the value of the site.

 

I thought this post was very helpful.  I immediately tagged it in del.ici.ous so as to be able to find it easily later on... and I don't dole out bookmarks lightly!  If you're interested in how much to buy or sell a web site for, this post deserves a read.

 

 http://www.stuntdubl.com/2006/02/20/website-valuation/trackback/

 

TG

Sailing on Lake Pacific

This is a picture from about a mile out at sea, looking back at Santa Monica. Some days the Pacific Ocean looks like a lake. It's very strange being on an enormous body of water with no wave action at all... It was a gorgeous day.

Lambo in Marina del Rey

Torture at Hollywood & Highland

It's not every day that you see public humiliation by a dominatrix being filmed on the side of the street. Oh... wait... this is Hollywood. I guess you do see that everday...

Cool Internet Business Model: LendingTree.com

Overview

LendingTree.com is a souped-up, glorified affiliate site. Ironically, they did not start by lending money (although they do currently offer this). I'm not sure what the "tree" is about, either. But, when you've got as big of a marketing budget as LendingTree, you pretty much name your company whatever you want, and people will accept it… Traditionally, their main business was making money for every qualified lead they referred a to a partner lending company. For our purposes, I'm going to focus on this "affiliate model" of collecting leads and receiving a referral fee.

According to their latest press release "LendingTree has facilitated more than 16 million loan requests." The revenue generated by LendingTree is amazing – $101 million in Q4 2005 (versus $45 million in Q4 2004). We'll talk more about the math in a minute – but my calculator may melt!

When someone comes to LendingTree, they fill out a series of web forms for the type of loan they desire, and are presented with a couple of offers from qualified lenders. You choose one you want, and LT gets paid! And how… From their terms of use: "For its services, LendingTree receives a real estate brokerage referral fee of up to 35% of the local broker's commission. Your use of this Web site constitutes your agreement with this compensation arrangement."

Where's the beef?

The numbers speak for themselves. This is a highly lucrative business, in the "my yacht should be more than 200 feet long, with a helicopter pad" sense of the word.

Working backwards here since I have the numbers of a public company:

• $101 million revenue in Q4 2005 = $1,122,222/day
• Approx 30,000 visitors per day = $37.40 per site visitor!
• $37.40 / ~5% loan closing rate (Total guess – I'm being generous because of the nature of the service) = $748 per loan closed

Reasons for success

• Big market, free service – They've found a way to offer a free service, which is of value, to a very large market, and get paid for it. This is a no-brainer.
• Aggressive advertising – national commercial campaigns ensure plenty of site visitors.
• Customer Service – they offer their 800 number for live customer support very clearly on every page. They want you to call because their call center reps are trained to close close close.

How to steal this idea

This one seems pretty obvious to me. Find a large market looking for an expensive product (see Legalzoom), service related industry, and offer them a free service, which you in turn get paid for. Duh! There aren't too many of these types of markets to start with, and there's probably very few left that aren't already exploited. But, one of the best ways to make dinero on the net seems to be to find something someone has already done, and figure out a way to do it a little different/better. Be creative!

Some possibilities might be:

• Autos – I've looked into this model for motorcycles (scheduling test rides in exchange for a referral fee), but the dealers are very resistant to change their current offline mode of operations.
• Landscaping/Home Improvement – Big market, big ticket item, contractors willing to pay.
• Accountants – in the spirit of tax season!
• Computer services – how many people do you think have problems with their home computers? How many private consultants are out there looking for a little extra work?

Standard disclaimer

The data and analysis in this blog are complete guesses, researched very little, and should not be taken seriously. This is meant only to show the basic business model of the site, and why I think it rocks. If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

 

Judge Judy gets a star

Judge Judy on the podium, speaking to the reporters, tourists, and Jon Voight (yes, he was standing right behind her), and Florence Henderson (brady bunch mom), and ME (blogger extaordinaire) about her new star on the Hollywood Walk of Fame.

samuel

NEW! This is a picture of the hand and footprints Samuel L. Jackson just left at the famed Mann's Chinese Theatre on the Hollywood Walk of Fame.

The foot that you see in the lower right part of the picture is actually a representative of Mann's Chinese on a microphone telling all tourists about the footprints. There wasn't anyone standing within 15 feet of him, but everyone was looking. I walked right up next to him, kinda nudged him out of the way and snapped a photo with my phone, then kept right on walking! He must have been thinking "damn rude tourists..."

Cool Internet Business Model: LegalZoom.com

Overview

Legalzoom.com – online legal documents, reviewed by lawyers, without lawyer prices.   When you need an incorporation, last will, copyright, even a divorce, LegalZoom has you covered!

 

The basic idea is that a lawyer (a famous one – Robert Shapiro) had an illegitimate child with a brilliant nerd programmer, and LegalZoom was born.   You go online and fill out a bunch of easy questions on web forms and wait for your documents to arrive in the mail (or come back from the state, if LZ sends them for you).   They charge a healthy fee for these documents, but much less than a lawyer would charge you for the same thing.

 

Love it!  No product fulfillment (except legal document packages), endless room for expansion (there are more legal documents in this world than there are numbers to count that high), minimal man-power required (all the work is done up-front when creating the document template).

 

The company isn't positioned in so much of a niche as it is a first mover in an enormous industry – with no major competitors.   In fact, if you think about it, there are no big names in the legal space at all! Online, or off.  Perhaps pre-paid legal comes to mind – but that's a totally different type of service.   Seriously, is there any huge legal company that springs to the average Joe's mind when you mention the industry?

 

They're positioned to service legal needs worldwide.  I don't know anything about the legal industry in America, much less the rest of the world, but it seems to me that if you can do it here… you can do it there!

 

Where's the beef?

It's a beef-steak!  Lots of people – an Alexa rating of 10,387 mean an approximate 20,000 visitors a day.  At the average 2.5% conversion rate (total guess, it's probably higher), and a high average package price of more than $100 (educated guess, but again, probably higher), they're making mucho mooola!   That's Spanish for "I'm looking at several Carribean islands that are for sale right now… but they must have a private airstrip because I don't do the helicopter thing anymore."

 

Reasons for success

• First mover in enormous industry.  There's just not really anyone to compete directly with them.   There are plenty of other places that will form an incorporation for you.  There are plenty of places to get your will.   They have a direct competitor in CompleteCase that will help you to get a divorce.  But, there is absolutely nobody that does all of this stuff under one roof like LegalZoom.
• Celebrity connection with Robert Shapiro (of OJ Simpson fame) brings credibility and exposure (just see the list of news outlets they've been featured on).  For my money, when he goes on TV he's one of the best interviewees in the world…
• Big brains, and big connections.  Have a look at their 'about us' page.  Not a big deal (…yawn…), but they've got one celebrity, one former member of the Supreme Court of California, 2 Harvard MBA's, a Yale grad, couple UCLA Law grads, blah blah blah.   I think some of these guys' pets might have prestigious degrees…
• Easy process.  It's a no-brainer to fill out one of their questionnaires.   I've done it a few times, so it must be easy!
• Customer service.  They really push their customer service from their site, which makes sense when you're selling a complicated product like they are.
• Smart marketing

 

What kind of marketing do they do?

• PPC – they're pretty much at the top of the pile for any search relating to the products they sell.
• Traditional press – Robert Shapiro is a draw for television interviews.
• Radio – They're sponsored by morning drive programs.
• SEO – The google query "site:legalzoom.com" shows 27,400 pages returned.   They've obviously got a robust content publishing system in place.

 

How to steal this idea

I think the keys to this type of business are:

1. Big market
2. Complicated service, made easy
3. Undercut traditional service model pricing
4. No real need to be face-to-face

 

Some of the traditional service industries that might be right for this type of business are:

• Insurance – being done by individual companies… but is there an insurance aggregator out there?
• Real estate – Zillow.com just rolled out… I'm very excited to see how these guys plan to cut out real estate agents for good.   This site looks very cool, but due to the demand on their servers today, I've been unable to check it out!
• Employment – Why is there not a company that runs a prospective employee through a questionnaire and standardizes the results for the prospective employers???   Every time I hire someone, I spend hours and hours of time trying to evaluate the resumes.
• Advertising – It seems to me that a company could fill out a questionnaire about their products/services, and get published in multiple offline sources for one low package price.
• Transportation booking – see my company RideOnTime.com .  The process of getting a limo or taxi in a new town WAS very complicated and hit-or-miss.  Not anymore!

 

Standard disclaimer

The data and analysis in this blog are complete guesses, not remotely researched, and should not be taken seriously.   This is meant only to show the basic business model of the site, and why I think it rocks.  If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

LA Natural History Museum

My daughter Soleil, kicking it with T-Rex at the la natural history museum.