Bid-for-position web directories, or simply “bid directories”, are an exciting new way to buy text links. As the name suggests these directories allow site owners and visitors to bid for a higher position in the listings. Traditional web directories, by contrast, list links by some predetermined criterion, such as alphabetical order, Google PageRank, listing date, and so on. Bid directories allow people not only to bid for a top position but also to increase their bids as needed to maintain the position.

Why buy text links? A site without links is like a business in the middle of nowhere. Links are the electronic roads that connects your site with the rest of the world. If “location, location, location” is the mantra for a building a successful brick-and-mortar business, then “links, links, links” should be one for a successful website. Besides being a source for direct traffic, text links help drive traffic to a site indirectly by increasing a site’s rankings in search engine results.

Although natural links, i.e. links placed voluntarily by other webmasters to your site, are preferable to purchased ones, it may not be practical to rely on natural links alone, especially for commercial sites competing countless others offering similar products and services. Unless your site is truly unique and useful to people, a category to which most sites do not belong, buying links may be your best option to increase your link popularity.

The rules for buying text links on bid directories are similar to those on other sites. Simply put, you should buy links in a way that simulates natural linking. Your link profile looks more natural when your inbound links come from directories with a range of Google PageRanks (PR). Although there is natural tendency to target only high-PR directories, a link on a promising new bid directory, which may or may not have a PageRank, can be a good investment down the line. Besides, PR means nothing to other search engines, including Yahoo!, MSN, and AOL.

Perhaps the most important factor for deciding whether or not to buy a link on a certain bid directory is how aggressively it is marketed. The first question to ask is, how many other sites link to the directory in question? But marketing goes beyond the sheer number of inbound links. The next question to ask is, where are the links are coming from? You can get an idea of a site’s link profile by querying “link:www.domainofinterest.com” (without the quotes) on Yahoo!. While inbound links from competing bid directories is certainly one way to build links to the directory, it should not be the only way. The directory’s links look more natural when they come from diverse sources, including article directories, social bookmarking sites, blogs, and forums.

The Google PageRank of a directory is often a good indicator of how aggressively it is marketed, but PR could also be one of deception. For instance, an unscrupulous webmaster might replace the content of an existing PR-7 site with a potentially more lucrative bid directory and market it as a “PR-7 bid directory”. A tell-tale sign that this has occured is when the domain name of the directory has nothing to do with web directories or search engines. Another good sign is when its category subpages are PR-0 or do not have PRs at all. That is not even to mention the many ways bogus PRs might be obtained.

Most bid directories are made from commercially available scripts customized to the siteowners’ tastes. The level of customization is indicative of the directory owner’s effort to stand out from the crowd and often their commitment to do whatever it takes to make their site succeed. So, all else being equal, it’s better to go with a bid directory with a highly customized design than one that looks like a hundred others.

Many bid directories categorize links alphabetically by the first letters of their titles, as a telephone book lists people’s names. These directories are not particularly useful to visitors looking for sites on a particular topic, say gardening. Visitors should not have to click on every letter from A through Z to find sites pertaining to gardening. Considerable time would be saved if the sites were categorized by topic, e.g. “Home and Garden”, rather than the first letter of their titles. More importantly, links that are grouped with others of similar content are viewed as more relevant by the search engines than those grouped with unrelated sites. As an advertiser, you’ll get more for your money from a directory that sifts sites into topical categories than one that uses alphabetical categories– all else being equal.

Let me end this article with a word of caution. While bid directories should be a part of your link building campaign, don’t put all your eggs in one basket by relying too heavily on them. There is a bit of a novelty factor in bid directories, and no one knows whether they will set a new trend in advertising or eventually die down as another fad.

About the Author:
Oudam is the webmaster of www.Top15Links.com, a bid-for-position web directory that allow site owners and visitors to bid for one of the top 15 position in each category. The top 15 links of all categories are prominently displayed on the home page. Top15Links.com employs a winning marketing strategy whereby 80% of all revenues generated from the site is put back into promoting it.

If you don’t want to develop a site from scratch, buying an existing site may be the way to go. Here are some things to consider when buying an established web site.

Domain name

Domain names can have a great influence on the valuation of a site. A domain name alone could be worth thousands, or even millions, of dollars. Make sure that the site comes with a domain name, since many sellers sell sites without domain names. Consider the name’s length, catchiness, memorability, extension, and so on. Ideally a domain name should be a .com (for commercial sites), relatively short, keyword-rich, contain only generic terms, and does not infringe on other companies’ trademarks.

The age of the domain name is very important for SEO purposes. It is much easier to attain higher rankings through link building for older sites than it is for newer ones. New sites are “sandboxed” by Google and will not rank well on the important keywords no matter how SEO is done to it. Older sites are viewed by search engines as more established and are therefore favored in the rankings.

PageRank

Generally, the higher the Google PageRank (PR) of a site, the more valuable it is. PR is a reflection of the site’s link popularity. An important question to ask is: Is the PR of the site in question natural or artificial? The PR of a site can be temporarily artificially inflated by buying links on other sites and by linking to the site from the seller’s network of sites. Once the site is sold, the seller may decide to remove links to it from his/her other sites. Always check the site’s inbound backlinks (IBLs) to ensure that they are natural and do not come from a network of sites belonging to the same person or company. Natural IBLs come from pages with a wide range of PRs. They have varying anchor texts (link titles) and may appear on various places on a site. Some come from the homepage; others come from subpages. Most come from a individual pages, whereas others are sitewide.

Traffic

Traffic can be bought easily through pay-per-click (PPC) campaigns like Adwords or Yahoo Search Marketing. In the worse case scenario, the seller inflates traffic to his/her site by buying pop-up and expired domain traffic. This is junk traffic. The site’s reported traffic should be evaluated against the site’s link popularity and search rankings. Ask the seller for a detailed site statistics to get an idea of where the traffic is coming from. If some of the traffic is gained through a PPC campaign, find out how many visitors come through the campaign and how much is being spent each month.

Revenues

This may be the most important consideration but should be used solely to decide on a prospective site. Ask the seller how much is spent on advertising each month. It’s really the profit, not the revenue, that counts.

Revenue Potential

How much money the site make each month? Perhaps the better question to ask is: How much money could it make a month? Does the current owner make the best use of the site’s advertising space? A webmaster might be able to make more by spending some time to find advertisers rather than lazily fill up valuable space with contextually targeted ads.

The “Fad” Factor

“Million Dollar Homepages” were all the rage at one point because a kid from England was able to make a million dollars selling ad pixels for for $1/pixel. These useless sites are now history. Granted, the internet is constantly evolving and there is significant volatility associated with the medium. Some online businesses are simply fads with such short life spans that you just avoid them.

How much maintenance is involved?

Fresh content is essential to maintaining a site’s traffic. Unlike physical real estate, which tends to appreciate with time, virtual ones must be tended to to ensure that the content stays fresh. Unlike domain names, developed sites require regular maintenance to ensure that it continue to make money. After all, content is king. Before you buy a site, find out how much time must be devoted to maintain it each week.

Cost of hosting

Some sites require a huge amount of bandwidth and storage space and generate very little revenue. Here the cost of hosting the site must be considered. Who does the site cater to? Does it cater to business professionals or teenagers who want to download free games and MP3s?

That’s about it for now. I’ll add more to this post as I think of other factors.

Since there is no industry standard for pricing a website, a site is only worth as much as someone is willing to pay for it. This isn’t helpful if you’re considering selling your site and don’t know where to begin. In my opinion, a website should be priced as one would a brick-and-mortar business.

One might price a site by taking its annual profit and multiplying by some factor, say 2.5, to arrive at a “fair” value. Unlike brick-and-mortar businesses, the internet business is volatile and everchanging, so a profit one year may not translate to one in the next.

Other considerations for valuing a site include the site’s niche, market reach, traffic, search engine rankings, age of domain name, number of inbound links, number of paying sponsors, Google PageRank, Alexa rankings, number of competing sites, and so on.

dnScoop has an interesting site valuation tool that attempts to value a site based on various factors. However, one should be forwarned that the results, while useful and interesting, should be regarded for its entertainment value rather than taken seriously for valuing a site.

Perhaps a better way to get an idea of how much your site is worth is to hang out in forums like the Digitalpoint and Sitepoint marketplaces and see how much sites comparable to yours are selling for. Ebay is another place to search for past sales of websites.