1 Man blog gets sold for $15 million: Case Study

Bankaholic, was a pretty interesting blog, with a catchy name, design and sticky content and like most other blogs all its content came from its sole writer and owner Johns Wu, but today the blog gets millions of hits, has got more than 20 full time writers and its 23 year old founder considered himself retired.
Ofcourse he just had to retire now, as he got an extremely sweet deal from Bankrate which offered him $12.5 million upfront and $2.5 million over two years, and he went on to make history as the owner of the most highly valued blog on the internet. In 2006 Johns Wu started a stock market and personal finance blog and according to our analysis he got most of his traffic from SEO.
While he started this blog he was still in college and like most teenagers had been struck by the idea of internet business, though science was his strength he decided to go with a stock market blog, which I bet made all the difference. This is a case study on the factors which contributed to the high valuation of this blog,

Content : the key asset

The value of any blog can be judged by the quality of its content, and if it succeeds in providing sticky and catchy content it would surely have a good sale price as quality information has always got its own price tag, even if a particular site fails to get in traffic.
John’s site provides great quality content from the beginning, and at the time of sale it had over 600 posts of the same, which is actually one of the key reasons. Seeing his first few posts I feel he combined quality content, with entertaining articles with a few posts that actually sell.
I also feel that their was heavy keyword research taking place behind all of his first few posts, for example take a look at this post, he has stuffed keywords such as APY, CD rates etc and he has dominated search results for that particular keyword, many blogs which do this will look extremely spammy, but he has made it look creative and of great quality.

Traffic : SEO & SEM

Johns already knew a lot about the internet and internet marketing, although this is just my simple assumption as till now his influence in social media is extremely low for an internet celebrity. I’ve also mentioned in a few of my previous posts that blogs which started off during the period of 2006 to 2008 experienced high growth rates due to heavy growth in internet usage and low search competition, that also was the time when Google’s search results got pretty mature.
As I’ve mentioned above, most of his earlier posts were highly keyword researched and during those times Google provided high search rankings for all quality posts all of which surely got him high traffic.
In an interview with SeoBook he has also claimed to have launched many Adwords campaigns in the beginning, which I think was a great idea. You can grow your blog heavily if you target the right keywords, the Adwords competition was extremely low back then, but still he has done what people were extremely skeptical about.
Very soon he ranked pretty high for high traffic keywords which was again a reason for such high valuations. Bankrate knew that it was next to impossible to rank for such keywords in today’s search market, so they decided to go as far as possible to get this blog.

Monetization : earnings potential

Bankrate surely expects good returns for such a huge investment, as expected they had expected more than just returns and profit by this investment. Bankaholic’s high rankings in search results is surely a great asset, and its content too was no less. But something tough to find out about the site was their initial monetization strategy.
The site got upto 200,000 visitors, so a combination of CPM, CPC and performance based advertisements would have resulted in great income. I’m sure Johns earned a solid passive income even during his first few days of blogging, but Bankrate cannot wait for years to reap back their earnings, as these monetization methods will hardly earn a six figure yearly income.
So far Bankrate has been using the same methods, and I also think they are selling sponsored reviews and promoting various finance related affiliate programs which are surely high paying. I wouldn’t be surprised if their revenues have tripled than the time when Johns used to run the site. But Bankrate already has a lot of financial sites which earn them heap loads of advertising and affiliate revenue, so I have a feeling that they are on the verge of launching a digital product to thoroughly monetize Bankaholic.

Finance niches are meant for success

A few niches on the internet are just made for success, even if my blog got 3 times the traffic Bankaholic did I surely wouldn’t even sell for even half that price. I few niches like finance, stock market, healthcare and education are extremely profitable, your adsense earnings will be comparatively higher, affiliate programs have high payouts and in the end the valuation of ones blog is always high.
This is infact an ugly truth about the internet, I am a strong advocate for the wealth and potential of the internet, but I must agree that all this isn’t divided equally as even today the geography, locality and niche of a blog have a lot of influence.
So in 2006 at the time when the competition for all niches remained low, Johns was lucky enough to chose the lucrative personal finance niche, soon the CPC rates for this niche was sky high resulting in a huge valuation for his site, so his success was partially due to luck.

On to our readers

This is surely one great example of what dedicated blogging can bring in, though Johns Wu had partial luck he had worked pretty hard on his site in the beginning. This case study is purely based on research and assumptions and cannot be back with any proof, but I bet all of you can use the above methods to build a successful internet business.