Hosting or Websites

[mini]

Hi Guys,

Just wanted to know your views,

What is worth more in value,

Websites earning through affiliate marketing/Adsense approx $3k/monthly

OR

A web hosting business making about $1.5k monthly (and growing)

And if you had one would you swap for the other.

Cheers

[Westech]

It depends on a few things:

Are the amounts you mentioned both net profit after all expenses?

Have both businesses made this amount consistently for a long period of time? What are the chances for each that they could start earning less? I'd be especially concerned about the website's earnings possibly changing due to changes in search engine placement or affiliate payout amounts.

What do you see as the potential for growth of each business? You mentioned that the hosting business is growing. Does the affiliate website also have the potential to continue to grow?

How much time do you personally have to put into each one? I own a hosting business and some content websites, and I know that the hosting business takes up far more of my time for the amount of money it brings in than the websites.

Ultimately, only you will know all of the details of your business needed to make this kind of decision.

[Cutter]

Sorry, that isn't enough information to make a decision. Here are the things I'd want to know:

Websites
-How many?
-Where is the traffic coming from? For example, is 90% of the traffic coming from MSN? (bad) Is the traffic split up between Google, Yahoo, MSN, with lots of keywords? (good)
-Are the websites updated regularly?

Hosting
-Is this 1.5k revenue?
-What are customer acquisition costs?
-At what point will more employees need to be hired?
-How much work does it require to maintain?

Personally, I'd rather own the websites. Of course the price would have to be right. If the traffic risk was high then it just might be worth one or two months revenues. If the sites were on type-in domains with high profit margin products then it could be worth 4 or 5 years of revenue.

[Cutter]

Heheh, looks like we we typing replies at the same time ;)

[mini]

Hi all,

Thanks for your initial posts.

All numbers are profit. The sites have been earning the $3k for well over 2 years and is amongst 5 sites.

As for the hosting, although it may be earning less, I see heaps of potential. You can get into domains, web design, SEO services, etc etc. Yes it definelty does take more time but at the moment its about 2 hours work a day.

Which one will you take and why? At the moment Im leaning towards the sites, however hosting has tonnes of potential.

hmmmm, any more pros and cons?

[Todd W]

Keep both, and get some help for the hosting if you can't do it yourself anymore.

If your hosting grows like you think it will you may be able to sell for a lot in the future. If you don't want to sell in the future you could always get more help to keep both running.

[mini]

Keeping both is not an option

[Chris]

The content websites are far superior.

Running a hosting company requires far more work than running most content websites. You are are exposed to far greater liability when running a hosting company. Hosting really only makes sense if you're simply reselling and thus not responsible for support, or in situations with economies of scale where you have thousands of clients.

Doubling the earnings of the websites will require work on your part, but it shouldn't increase your day to day maintenance requirements. Doubling the earnings of the hosting company will basically require you doubling the number of customers, which should also double the number of support requests, etc. Basically doubling your workload.

[thebillionaire]

Hosting is alot harder, you gotta manage servers promote sell, look after your cooling, plus if a server breaks you gotta buy a new one. I would take the website as well, I have just started making sites a few months ago and its very hard the results you get at first are very discouraging but it hopefully increase

[MarkB]

The way I see it is, look at how it will affect your life.

If you want to go on holiday, that will be a lot harder with the hosting company (who'll look after things while you're gone? Can you trust them?) that with the websites (let them sit there and make you money while you're away!).

Go with the website :)