For over a decade, investing in content websites felt like striking digital gold.
This is the world I come from, and one I know well. Before starting Alts, I was the Head of Product at Flippa — the first marketplace dedicated to website investing.
So let me tell you — content websites were the wild west of alternative investing. Savvy entrepreneurs and investors could create very lucrative passive income streams with what were ultimately some pretty simple strategies.
But those days are rapidly coming to an end. In this issue I'll tell you why.
It includes quotes and interviews with some of my favorite people in the media space: Dom Wells, Brian Morrissey, and Richard Patey.
Let’s go 👇
The Golden Age of content sites
Let's start with a quick primer: Content site is a bucket term for any website focused on providing information and resources.
Instead of selling products or services directly, the goal of a content website is to identify profitable keywords, use low-cost labor to churn out articles that rank highly in Google, invest in SEO optimization, get tons of traffic, and monetize it all through ads.
That's it. Then you can just sit back, collect checks, and enjoy that sweet passive income. Err, at least for a while.
The “golden era” thrived roughly from 2010 to 2020, when a confluence of factors let savvy investors and entrepreneurs build, buy, and flip content sites.
“There was a period in the 2010s where the arbitrage was just so unbelievably high.” – Brian Morrissey, The Rebooting
It was a giant game of traffic arbitrage, but it created a lucrative opportunity for those who knew how to play the game.
Here's how the game was played:
Step 1) Get sites to rank in Google
It all started with SEO. The primary goal was to rank high in Google search results through extensive keyword research, on-page optimization, and link building. Success meant a never-ending stream of organic traffic, the lifeblood of these sites.
A whole industry of SEO specialists were dedicated to gaming Google's algorithms. These specialists employed various tactics; some ethical (“white hat”) and some unethical (“black hat”):
Keyword stuffing: Overloading content with target keywords to manipulate search engine rankings. (This stopped working pretty quickly)
Link farming: Creating or buying links from low-quality websites to artificially inflate a site's authority (This took a long time for Google to fight back against)
Content spinning: Repurposing existing content to create “new” articles, often with the same dubious quality.
Step 2) Stuff the site with ads
Nearly all of these sites were absolutely stuffed to the brim with ads, using Google AdSense or upmarket services like Mediavine to earn revenue based on clicks & impressions.
Affiliates took more work, but could be even more lucrative. By embedding affiliate links within their articles, website owners earned a commission on every sale generated through their site.
Step 3) Stay one step ahead of Google updates
As part of their massive effort to keep SEO slop away from the top of search results, Google would constantly change its algorithm, with at least one or two “core updates” each year that can cause a site's traffic to literally plummet overnight.
A big part of website investing is understanding these never-ending updates, and trying to read the tea leaves on stuff Google is doing behind the scenes (but not saying publicly.)
Actual footage of a professional SEO staying ahead of Google updates
To Google’s credit, this was the right approach to take. Handing out olive branches is too risky. Playing hardball with the SEO industry is the only way to maintain integrity of search results.
But to counteract this, website operators were forced to create content which was truly valuable (what a concept!) OR resort to tactics that keep traffic engaged on the page for as long as possible.
This explains the rise and fall of listicles, and why recipe bloggers started writing ten minute preambles before telling you their recipe for Nonna's meatballs.
Overall, the strategy was not inspiring, but the scheme worked if you knew what you were doing:
“This strategy has worked for a long time. It’s not an inspiring strategy, but if you manage your costs accordingly and really know what game you’re playing, the arbitrage scheme works.” – Jacob Donnelly, from A Media Operator
The website investing boom
The relative ease of building and monetizing content websites led to a boom in website investing. Marketplaces like Empire Flippers, FE International, and Flippa considered content websites their bread & butter.
And for good reason. According to the Empire Flippers 2023 State of the Industry Report, content sites focused on display advertising were the most highly sought-after assets. In 2022, display ad content sites outsold every other business category.
