Why I Paid $190,000 For The Domain Name websitehosting.com

A few days ago I closed on the biggest domain name purchase I’ve ever made. At the time of the transaction I ran the gauntlet of emotions: excitement, fear, pride, nervousness, vulnerability, happiness, and the list goes on… That’s because the purchase price, at $190,000, is enough to buy a nice house with. According to Domain Name Journal, this is the largest domain name purchase of the year. It doesn’t show up on their chart yet since it was a private domain name purchase, but I suspect it will after making this blog post. So, anyway you look at this, it was a major purchase!

Why Purchase This Domain?

Keyword Domain

websitehosting.com is a keyword domain for the search terms “Website Hosting” and “Web Site Hosting”. Additionally, it can capture several long tail search terms such as “Business Website Hosting” or “Dedicated Website Hosting”.

Search Volume

Of the two main keywords I’m trying to target with this site, “Website Hosting” gets searched 246,000 times per month and “Web Site Hosting” gets searched about 301,000 times per month. This means I have an audience of 547,000 searchers per month. At position 1 in google that will capture about 235,000 visitors per month to my site. At position 10 it would bring in about 16,410.

Web Hosting Pays High Commissions

Since I purchased the site last week I signed up for over 50 web hosting affiliate programs, all of which pay at least a $100 CPA. This means that each time someone signs up for a web hosting account via my site, I will make at least $100. These are some of the highest commissions in the entire affiliate industry. As my site starts to gain popularity I can also look forward to higher commissions as partners compete for my traffic.

High PPC Bids

According to Google’s keyword tool, the average bid for “website hosting”, or other variations, is $11. This means people are paying $11 for every click Google delivers. PPC (Pay Per Click) ad rates for web hosting are among the highest on the Internet. This coincides with the high CPAs web hosting companies are paying affiliates.

Survivability

Unlike fad search terms, web hosting is going to be around for a long time to come. The Internet continues to grow and so does the number of people searching for web hosting. There will always be high competition to get customers and therefore I expect the CPAs to remain high for a long time to come.

Bringing It All Together

When taking into account the high CPAs in this market along with the high search volume, there is a big business opportunity here. If you use my Traffic And Revenue Estimator Tool you can get a good idea of the economics of this niche. By plugging in 547,000 searches, along with $125 CPA, and a conversion rate of .5%, you can get a sense of the true earnings potential here. I would obviously love to get to the number one position, but anything on the first page makes this a wise investment.

Why Post About It On This Blog?

In general, I’m a pretty private person and don’t like sharing a lot about my life, not to mention trade secrets. However, I’ve been taking a different approach with that lately via this blog and other media. I feel lucky to be one of the fortunate ones who managed to become successful at what they do. While there are some obvious risks to posting my insights, strategies, and results – I believe in giving back to the industry that helped me become who I am today. I hope to “pay it forward” by helping others become successful via this blog. I know the affiliate business is insanely competitive, but the reality is there is plenty to go around.

I estimate that it will be a 12-18 month journey to take websitehosting.com from a barebones domain name to a site that ranks in the top 10 for the search term “website hosting”. I plan on documenting my strategy and progress via this blog (every single step of the way). Hopefully, it will help my readers start affiliate sites of their own and realize the wonders of online affiliate marketing.

When I purchased websitehosting.com, it was just the domain name with no content. I’ve already been posting news articles and working on a great design. I’ll make a separate blog post later this week documenting exactly what I plan on doing with the site in the first 60 days.

27 Comments

  1. Very exciting investment! Looking forward to seeing your strategy on pushing ahead on this project.

    Reply
  2. will you go drupal? :D just joking, I know this is a wordpress job

    I think you can get some extra revenue by filtering the best customers to special services instead of 3rd parties.

    I know, its easier just to refer and cash, but there are some clients which can prove to be an excellent asset. Why to sell it for $100?

    Also, with such a HUGE market you can offer side products, like templates o web development. Hostgator does it by “refering” to “external” companies, godaddy does as godaddy itself… so maybe it’s a good path.

    Last but not least, this domain can become an authority by publishing comparisons between services and having useful tools/tutorials. It is the developers who finally decide where to go with the projects, so if they know the site there’s where the cash will flow.

    Well, maybe nothing new for you… we all know Tony can be quiet.

    Best Regards

    Reply
  3. Congrats on the purchase!

    – TBC

    Reply
  4. Average Monthly Searches: 113,125
    Average Cost Per Click: $12.14 USD

    Fantastic Domain. I will follow this closely.

    And 80% of estibot retail value.

    I recently left my job as SEO director and am starting up on my own. I always have a hard time convincing people/clients the importance of exact monthly searches. Unlike most domain sales, this is the 1st to peek my SEO interest. I imagine you will get a lot of twitter followers and RRS feed subscribers today, myself excluded.

    Cheers,

    Mark

    Reply
    • Hi Mark, thanks for stopping by.

      Best of luck with your new venture. Please feel free to contact me if there is anything I can do to help. I know leaving the comforts of a reliable job can be uneasy, but it’s worth it in the end!

      Reply
    • Thank you, but that isn’t a name I would be interested in.

      Reply
  5. Awesome domain Mike, and worth every penny. I’m looking forward to reading your updates on the development of this A+ domain name. Best of luck.

    Reply
    • Thanks Mike. I see you own website-hosting-reviews.net. If there is anything you think we can help each other with feel free to contact me.

      Reply
  6. Congrats on the purchase Mike and it will be fun to follow your progress. It is nice to hear “the buyers” side of a domain name purchase, being a domain seller myself.

    Reply
    • Thanks for stopping by Jamie and thanks for your interest. I read your blog, so it’s nice seeing you here.

      Reply
  7. Congrats Mike and thanks for the detailed post. I’m dipping my feet into these waters and am excited to follow along as you build up your new domain name. Best of luck!

    Reply
    • Thanks Matt. I should have my next post up about the site in a day or two.

      Reply
  8. The paragraph I like the best is why you’ve posted about your trade :). Thanks, your thoughts are very much appreciated ;)

    Reply
  9. Great domain Mike, looking forward to following it and reading updates on it. With a price tag like that I don’t think you’ll ever need any more motivation :)

    Reply
    • “With a price tag like that I don’t think you’ll ever need any more motivation.” – That’s about right :)

      Thanks for stopping by.

      Reply
  10. nice purchase :) wish you all the best with the domain name with your affiliates

    Reply
  11. congrats on the purchase! awesome domain! i own a very similar domain and this is motivation for me to build it right away.

    Reply
    • Excellent. I love a little friendly competition. As I said, I think there is room for everyone. If there is anything you think we can do to collaborate let me know.

      Reply
  12. Hi Michael,

    From my perspective it is nice buy however you will need at least a top 1 or 2 Google position to get even 15% of the traffic you expect. I base everything from some private sites I own and for 1,500+ uniques a day on just front page #5 this is out of 135,000 Exact searches a month. So I get (45,000 searches a mo.). So, looking at the “exact” searches for the 2 terms “website hosting” and “web site hosting” I see only 31,400 total monthly searches. Am I missing someting?

    Reply
  13. Hi Michael, I would love to become a webhosting.com affiliate using my .co.uk tld site which is WebsiteTonight and it is currently parked on Sedo.
    Regards,
    Alex

    Reply
  14. Hi Michael, great post. Appreciate you sharing this info in a public forum and I wish you the best. It’s scary to invest that much in a single domain and I actually sort of understand how you feel (fear, nervousness, excitement). I paid a lot, though not nearly as much for my domain back in 2005.

    I just Googled “website hosting” and didn’t see you in the top 10 or 20 (yet). How long do you envision the process taking, breaking into the top 10? Have you made it into the top 10 for any of the long-tail keywords yet? Your competition looks tough so I’m really looking forward to seeing the results. Best of luck, and I’ll stay tuned.

    Reply
    • Aric,

      Thanks for stopping by. My time horizon is 12-18 months to reach a top result for my main term within Google. I just purchased the site 12 weeks ago and it’s simply not possible within Google to be anywhere near the first page for a competitive term like this in that time frame. I’m making great progress with long tail searches and that is the bulk of the traffic to the site so far. If you search Bing and Yahoo, you will find that I’m on the 1st page there already. Of course, the real prize is Google, not Yahoo or Bing.

      Mike

      Reply
  15. Just catching up on your last few months blogs now Michael. Awesome purchase and hope it goes well for you. Loving your posts about the WordPress sites as well. Great inspiration and motivation for all of us :)

    Enjoy the road trip!

    Reply

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