Here comes the forum consolidation!

By DChapman · Sep 15, 2006 ·
  1. DChapman
    If you own a reasonably large forum, it won't be long before someone offers to buy it. At the very least, someone will feel you out and see if you know what you have. I wouldn't be surprised to find that many of you already have been contacted. I've been contacted by three different groups in a short time frame. And I know of more on their way. And I have zero doubt whatsoever that a few of the buyers are angry to be reading this article. Ladies and gentlemen, i'm going to tell it like it is. Big money is starting to get a clue.

    Congratulations, the housing boom is over, and you're sitting on the hottest real estate around! What's going to happen? People with a whole heck of a lot of money are going to start contacting you and offering to not only buy your forum, but some will keep you on as admin and pay you to keep doing what you're doing! Most of you reading this article have NOT monetized your site to its full potential. Many of you are sitting on goldmines and not mining it.
    aimg3.zoints.com_forums_gold_mine.gif

    This may be due to not caring about the money, but more often than not, you don't know how (no, i'm not claiming I know every trick in the book, i'm learning something new each day). Heck, a forum recently joined Zoints that is pretty big. One of our Team members suggested a small tweak of the forum's archive ad placement (while still remaining conservative like the owner desired). Let's just say we're now on his Christmas card list. Because when you have millions of page views per day, even a small increase in CTR turns into substantial money.

    And that's what these big players are going to do. They're going to consolidate the forum industry and realize the cost savings via volume. If you have volume, you make more money, it's that simple. Have you ever noticed that some big sites are able to change the look of their Google Adsense ads? That's because there is a not so secret little club (no secret handshake though, though that would be kind of cool) where when you pass a special number of impressions, you're REALLY cared about. And in the world of advertising, when you can be a little bit different, you benefit.

    The really smart buyers are snatching up forums in bulk and then starting their own advertising services. These are highly sophisticated businessmen with sales and marketing staff who go out and find advertisers for their properties at high CPM rates due to the highly targeted nature of forums. No middle-man like Google for them, they pocket every cent.

    Yes, the money is coming. Are you interested in selling? There's nothing to be ashamed of if you are. If that forum is no longer your "baby" that you look forward to logging onto each day, that's ok. But don't jump on the first offer that comes around. Negotiate. YOU are sitting on property that a LOT of people want. But be careful, what you own might be worth much more than you realize. 10-12x earnings like many people think is just plain stupid (why that ever became norm is beyond me). That means the buyer gets their investment fully realized in 10 months (or far less if they know how to monetize the property). SIGN ME UP!

    aimg3.zoints.com_forums_stupid.jpg


    Am I going to provide in-depth analysis of how much your site is worth? No. I'm not for two reasons:

    1. You can have 10 forums with the exact same statistics but different demographics and subject matter. Each will be worth wildly different amounts of money.

    2. Math makes my brain go on strike.

    aimg3.zoints.com_forums_brain.jpg

    I have no idea why it has taken "smart money" so long to realize the power of forums, but it IS now starting. Educate yourself, prepare yourself, and then hold on and enjoy the ride. Unless of course you don't want to sell. In that case, be prepared to face serious competition as these guys play for keeps. Here comes the great forum consolidation.

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