I think I am uniquely qualified to write this post.
Reason being, I have websites in all 3 of these categories and I currently make money online with all of these different business models.
Each website has various advantages and disadvantages. Each also has different risks, scalability and costs associated with such.
In the following post i aim to compare all of the business models and then help YOU find out which one is best for your needs.
Below is my comparison of each model:
The Micro Site Business Model
Micro Niche Sites: These are small sites. They can be exact match or partial match domains. They can also be web 2.0 pages like a Blogspot.com blog, WordPress.com blog, Squidoo .com lens, a Hubpages.com page or even a Youtube video. Normally they are 1 page sites and are designed to rank in Google for one exact term or modifiers of that term.
The beauty of micro sites is that anyone can create one quickly. Within a day I can register an exact match domain name, set it up on my web hosting account, install WordPress, add a theme, SEO the theme and add content to the site.
Advantages: Micro Sites to me are short term sites. I create them to make money quickly (I try to rank these within 3 months) and expect to get a fast ROI. Typically I create Micro Sites for different products or services. I will then monetize with affiliate programs.
Normally I go for low to medium volume queries (1000-10000 exact searches per month), I will try to get an exact match domain, I will create one long high quality piece of content (800+ words ideally) and then I will build links to the site in order to rank it.
The beauty of micro sites is that I used them on a “churn and burn basis”. What I mean by this is that I am aggressive with my link building and SEO methods and try to rank these pages as quickly as possible. I will literally throw any kind of links at these sites sometimes; I do a lot of SEO experimentation on them, simply because they are so low risk and require so little investment.
Normally though I use private blog networks, article marketing links, other web 2.0 links, PAD links, Wiki Links and directory links. Basically I will throw all kinds of links at these sites without worrying too much about being aggressive and getting the site penalized.
I will also use micro sites as link shields to my authority sites and use them as a way of laundering link juice. So for example, instead of sending tons of spammy links to my money site, I will create a micro site, send the low quality links to the micro site and then link from the micro site to my authority site. In essence I am giving my authority site one very high powered relevant backlink instead of tons of low quality links. The biggest advantage of this is that I can build a link network to provide high quality links to my niche sites and authority sites without risking a penalty to my authority sites. Worst case scenario my micro site gets penalized.
Disadvantages: The biggest disadvantage of creating a micro site is that they do not last forever. Don’t get me wrong, it’s possible to create a micro site that will rank for 12 months+ but eventually if you create a site, build a ton of links to it and then leave it. It will start to drop in rank at some point.
Sometimes your micro sites will rank quickly and easily, sometimes they won’t rank easily at all. This approach is kind of like throwing a lot of things at a wall and seeing what sticks. SEO changes over time, links that are valuable now may go out of vogue or be devalued. Google might devalue exact match domains and cause your sites to drop. Lots of things can happen that will decrease your rankings over time. For example, three years ago it was easy to rank an exact match domain name with just Scrapebox comment spam and Xrumer profile link spam. Nowadays these links are greatly devalued (Although can still be useful in some situations. I use them for lower tiers in link pyramids. However that is another story…). Basically what I am getting at is things change and micro sites are not the most long term sustainable methods of SEO.
For this reason I like to turn micro sites into niche sites if they are making me money. So sometimes if a micro site is making me money I will build out 10 or so more pages on to the site, add pages that make it look more legitimate (Contact us, terms of service etc), scale down the aggressiveness of the link building, get more high quality links (Like guest posts) and just generally build out the site and make it better. I have found that doing this can greatly increase the lifespan of a site and turn some of the disadvantages of a micro site into advantages.
The Niche Site Business Model
Niche sites: Typically these are like groups of micro sites on one domain name. Let me give you an example of both in an industry I am familiar with, the health supplement industry.
A micro site could be a review site on an individual supplement, for example XYZ diet pill. A niche site could be a diet pills review site, featuring dozens of reviews and articles about diet pills and losing weight, perhaps comparisons, information on certain types of ingredients, side effects etc. Typically niche sites go after a larger volume keyword on the homepage (5000+ exact searches a month) and contain 10+ internal pages which can go for other low volume or long tail keywords.
Advantages: The main advantage of a niche site is that they are designed to be slightly more sustainable than a micro site. These are the kind of sites that you build a base number of pages for, build links for, and continuously add to slowly over time. The lifespan of a good niche site could be unlimited whereas a good micro site normally has a lifespan before it starts to lose rankings.
These sites are actually useful to visitors (Not that micro sites are all spam and are not useful); if you create a helpful niche site that solves a problem or provides the best information on a specific topic you will get bookmarkers, return visitors, natural links and natural social signals.
Good helpful niche sites will also likely avoid Google penalties like the Panda algorithm. Reason being, Google wants to reward sites that provide good, informative, useful and authoritative content. That is assuming you create a useful site.
As far as link building methods go, I am slightly less aggressive with these kinds of sites and anticipate a 6-12 month ROI. Domains take time to age and I generally build links to these sites slower. I tend to try and get higher quality links to these sites. For example high quality blog comments and guest posts on relevant sites, juiced up web 2.0 and article links also work well at this current time.
You can also use some risky practices like paid homepage backlinks or blog network links. These links carry a greater risk of getting you a penalty of some kind and I would advise against using these straight to your niche sites. However doing so can greatly increase the speed you rank at, however the risk obviously increases. It is up to evaluate the risk and reward of such links.
Generally I will shy away from using ultra low quality links like automated comments, profile links, low quality article directory links etc to my niche websites. I will however use these kinds of automated links to link to pages that link to my niche site. This effectively increases the link juice and power of the links that link to you and currently is a very effective linking strategy.
Disadvantages: I like to think of niche sites as the middle ground in terms of risk and return on investment. They are generally seen as more risky than authority sites, and less risky than “one page wonder” micro sites. That being said, a lot of the risk comes down to your link building practices.
Generally a niche site will take longer to get a return on investment; the keywords targeted tend to be more competitive that micro niche sites but often more valuable once you manage to rank for them. I would normally set out a 6-month time period in which I would like to see a return on investment, whereas with micro niche sites I would expect a return on investment within 3 months of creating the site.
Authority Site Business Model
Authority Sites: These are websites that cover a broad topic in an industry. For example in the health/fitness/supplement industry and authority site could be a complete supplement review website, or a weight loss information site or a bodybuilding information site.
Authority sites cover a topic in-depth and it really helps if you have a strong passion in the topic and/or are an expert on the topic. Typically authority sites contain 100+ pages of high quality content.
Advantages: Authority sites are the long term most sustainable method of building a web based income. Sure authority sites can get penalized just the same as micro sites and niche sites but instead of being neutral or negative in Google’s book, Google wants to reward authority sites because they tend to provide the best information for visitors. More advantages include:
- Get return visitors. Multiple opportunities to sell your products and services.
- Provide real value. Get users to promote your site by re-tweeting, Facebook liking and +1’ing your high quality content.
- Build trust. By creating something remarkable you will build trust within your industry. People are more likely to buy from those that they trust. People are much more likely to trust a professional looking authority site with hundreds of high quality posts, real subscribers, real blog commenter’s etc.
- Avoid penalties: High quality sites, with long in-depth content rarely get panda penalties. Users tend to browse these sites more, bookmark them and provide signals to Google that your site is of a high quality.
- Build a brand: By building a brand you are creating an entity that stands on its own two feet. People trust high quality authority sites, they will likely opt in to your email list more easily, sign-up to your product recommendations and just generally remember your site any time they think about your site topic.
- Get traffic other than from Google: Real authority sites get linked to from other blogs, from forums, through email, through Facebook, through twitter, through Stumbleupon and other methods. In short if you provide value that no one else provides.
- You can leverage your visitors: Do you have returning visitors coming back every day to see what you have written? Why not add a forum and get your users contributing content to your site. Authority sites can leverage user generated content, get your users to ask questions, create content, and write reviews. They will do all of this for free if they like your site enough and feel like they are a part of your community.
- Big sites can make big money: Generally I would say there is a cap on how much money you can make with a micro site or a niche site. With a real authority site the sky is the limit.
- Lots of content: Authority sites cover larger topics and provide you with greater opportunities to rank for more keywords and more long tails. You also get to leverage the authority of your domain name, so chances are you will rank for many long tail keywords without extra risk just by leeching off your brands authority (Assuming you interlink your site well).
- High Quality Natural links: If you become an authority in your industry you will be able to connect with the influences within it also. Getting guest posts on other authority sites will be a lot easier; people will also naturally link to your content because of the value you add to your industry.
Disadvantages: The biggest disadvantage of creating an authority site is that it takes a lot of work. As funny as that sounds, very few people will have the passion and determination to stick it out and most will give up somewhere along the road. Authority sites take longer to get a ROI, usually but not always. There are some ways of speeding up the process (For example connecting with the influences in your industry and getting traffic from other sources apart from Google); however the authority site model should not be seen as a get rich quick, high ROI model. It is not that.
This is obviously a double edged sword, because creating an authority site is so hard, the rewards for doing so will be many times greater. Very few mini sites and micro niche sites will earn in the 4 figures, let alone 5 figure a month range. With authority sites, the sky is the limit and its possible to build sites that earn 5 figures a month within a couple of years.
The reason it is difficult though is because the sheer effort needed is a lot. The type of person who should start an authority site is someone who is willing to sacrifice a year of their life doing things other people are not willing to do. This means becoming an expert in your industry, writing content for hours each day, spending time connecting with the influencers in your industry, contributing to forums and blogs, writing guest posts, building links, creating video content, creating a forum, creating a podcast, creating free and paid products to sell or giveaway in exchange for emails.
This type of stuff is what creates value and what will create a long term successful business.
So which business model is best?
This is going to sound like I am avoiding making a decision but I honestly believe that all of these business models are the best but for different reasons, what may be best for you may also not be best for me. Here is a quick summary of each model.
Micro Niche Sites
Good to make a quick buck. If you get it right these sites will give you a high return on your investment and cost very little money to set up. The risks however associated with these sites are larger and they are most likely to have the shortest lifespan.
Costs and ROI: Can be set up for less than $20 (Domain and hosting). Link building can be done for free or cheaply. Overall cost is likely to be less than $200 per site including link building. These sites can bring anywhere from $10-$1000 per month depending on the keyword you rank for and how well you monetize the traffic. Right now I have dozens of micro niche sites, most of them make in the region of $10-$300 per month.
Niche sites require a greater time and/or dollar investment. They carry much the same risks as micro niche sites (Depending on your link building methods), however these are sites that users are more likely to find useful, bookmark and generally look more authoritative. If reviewed by a human reviewer a good niche site will stand a higher chance of staying around than a micro niche site.
Costs and ROI: Can be set up for less than $20. Link building costs can be in the hundreds to thousands. Think link building software, link building services etc. However the sustainability compared to a micro niche site will be greater and will most likely have a longer lifespan. Monthly income from a good niche site will likely be $100-$XXXX per month.
Authority sites have the largest “dip”, IE the time it takes from starting one to having a successful and profitable one. You cant make an authority site in a week or a month. Creating a fantastic authority site is a serious life decision and will most likely take years of your life. However they do give you the opportunity to create something remarkable, a legacy of sort and an extremely profitable and long term business. Creating an authority site is also one of the only ways of reducing how much you rely on Google for your income (Sticking all of your eggs in the Google basket is a somewhat risky strategy).
Costs and ROI: An authority site can be made on the cheap. It’s all about hustle. However authority sites are a lot of work and should only be taken on if you are willing to make a commitment to doing it. 90%+ people who start on this path will fail. So you really must have a reason why you are going to make this happen and stick to it. Income potential is unlimited with an authority site.
A final Note
A smart businessman diversifies his risk. I like to think of all of my websites as either short or long term investments, risky or safe investments. In the same way it’s not wise to stick all of your net worth in any one particular stock when investing, you should not do the same with websites. I would advise you to pick a single industry that you are passionate about, one that you can become an expert in and then start making different types of websites.
I would personally start with niche sites and micro niche sites and then once you are making money I would move on to creating an authority site once you are making money and have learnt the ropes of site creation, keyword selection, monetization and SEO.