What Does $14 Million Worth of PageRank Look Like?

Jun 11th

From Hitwise:

CircuitCity.com is back after Systemax purchased the brand and domain at bankruptcy auction for $14 million. Systemax also owns TigerDirect.com and acquired CompUSA last year. CircuitCity.com was quickly relaunched last week to capitalize on the remaining brand strength and traffic to the website.

Not to mention the link equity, eh?

Not a bad strategy there Systemax. That traffic is cheaper than AdWords, will pay for itself in less than a year, and since they are a corporation the Google rankings + traffic will stick. This is probably even a better buy than CompUSA was.

If you are ever worried about creating a second site focused on a high margin portion of your business, just remember that this company owns at least 3 electronics retail brands targeting the exact same keywords. And Google loves it.

This sort of domain name + brands + links transaction highlights multiple fallacies in Google's broken view of the web...

  • Google tries to scare you about buying a link or two in the dark corners of the web (and even takes away your ability to funnel the link equity you earned), and here are these brands being bought and sold (with link collections) like true commodities.
  • If they don't like unnecessary duplication then should 1 company run 3 parallel competing websites with the exact same business model in the exact same niche targeting the exact same keywords? It is viewed as legitimate because they are a corporation, but since when have corporations been on a higher moral ground than individuals?
  • Brands don't make the web less of a cesspool. They often create the cesspool. They simply find something that works, wrap it in brand, and look for ways to scale it. They love.com to scale and automate. Any intelligent SEO that has many Fortune 500 clients will tell you that some of their clients are far spammier than they could be on their own websites, largely because of brand.
  • As corporations grow more web savvy, they will create more of the same "nasty" no-value-add duplication that Google complains about when passing judgement against the affiliate industry.

Which reminds me...I really should create a fake perceived large corporation (founded by lawyers, perhaps) to buy assets, which would mitigate Google engineer interference and profiling as we try to grow our humble web business.

Published: June 11, 2009

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Comments

June 11, 2009 - 5:12pm

I'd bet you'd love to get your hands dirty on this site :.)

June 11, 2009 - 5:26pm

Aaron, fantastic link to that video "The Corporation". I'm buying it now. Great stuff.

Also, nice spot for the CircuitCity.com domain. :)

June 11, 2009 - 6:15pm

I've got to confess Aaron that these types of strategies are some of my favorite aspects of SEO. Private equity firms like Blackstone should have SEO divisions that look for these kinds of opportunities.

June 11, 2009 - 6:15pm

It is the same history of the history of the capitalism... big fish even eats small fish. Anyway, Internet is still a "place" with a lot of advantages for the small fish.

June 11, 2009 - 7:28pm

@Aaron: you've never bought a domain in a niche strictly for its link value?

June 11, 2009 - 7:57pm

@Garrett I think he's pointing out the double standard.

If google knew that Aaron bought a domain for it's PR, then the site would be banned from the index.

If large corporation buys a domain like circuitcity.com for it's PR, then they are not banned from the index.

Corporations don't let corporations not do whatever they want.

June 11, 2009 - 8:42pm

@Evan: yeah, I figured as much. I'm sure Aaron is also smart enough to get creative w/ his whois info, ip addresses, and other footprints to avoid this double-standard. ;)

June 11, 2009 - 9:01pm

So many nights without a post on my favorite blog and now one of my favorite topics made it on the blog ;).

@Garrett: I think Evan is right..as in that Aaron probably didnt mean to say buying sites for link equity (or whatever else) is wrong. I think he has mentioned having bought a site before in order to get around the sandbox if I remember correctly. However, he has more than once criticized the double standards (when it c omes to brands) and hypocrisy that Google sometimes displays...talking about fairness and justice so much that it's starting to sound a little silly when they couldn't care less whether a charity organization's site loses all it's traffic or a mom&pop shop gets wiped out of the rankings, b/c of an algorithm update that after all is only designed to make them more money (I dont have to remind anyone of how much money they already got, right?)...

Aaron, I'd like to ask you something on this topic. I've been wondering why I often hear about the business models of 1)in-house SEO 2)SEO consultant 3)SEO running his/her own sites (from scratch) so much, but how come I've never heard of anybody flipping sites for a living (buying, tweaking, selling). Are you aware of any SEOs who are doing that as their main business model (just wondering if they exist) or are profit margins for that kidn of business model too slim / opportunities of buying great sites too scarce?

I think you've mentioned having bought, tweaked and sold a site before and that it was rather profitable (hope Im not confusing something, if so I apologize). How come you're not doing it as a large part of your business model? Are good opportunities too scarce?

PS: This reminds me of another site that was sold a while back and what it has (not) become lol: www searchguild com

June 11, 2009 - 10:19pm

I don't really sell many sites. Some people make money flipping them, but most the people I know that make sites profitable don't keep flipping them, but keep building them out until they have enough momentum to sell them for a nice multiple.

There was an article in the NYT about 6 months ago about people who flip websites for a living. I think Lee Dodd has done a good bit of site flipping, but he is about the only 1 I know who has.

June 12, 2009 - 12:55am

Ah I see, maybe "flipping" sites was the wrong expression (only picked that one up recently). I assume flipping a site means buying, tweaking & selling it after a relatively short period of time? (I didnt mean to imply that the period of time has to be short)

However you do know of people who buy sites, make them more profitable (by tweaking them & adding content), and then sell them after say a year or more? Or did you not mean that they actually buy sites to build them out/make them more profitable, but simply start their own sites from scratch (as most SEOs)?

anyway, thanks for the quick reply, once again.

EDIT:

http://www.sparkplugging.com/sparkplug-ceo/blogging-elite-retreat-lee-dodd/

"The bad news? Monetizing blog communities is not nearly effective as with forum communities. And moving a blog community into a forum environment really hasn’t been successfully done on a large scale as of yet."

I guess there's a first time for everything ;-).

June 12, 2009 - 11:48am

For most people I think it is easier to monetize blogs than forums. The only way forums are better is if you sell premium accounts.

June 12, 2009 - 11:41pm

That would have been my guess, too to be honest..I used to like the idea of creating a forum until I noticed how much work and trouble it would be and that most sites that have forums, Ive never spent a single cent there...or havent been to their actual homepage in over a year as I just go right to the forum address..seems like a bad investment most of the time (though this guy seems to kind of prove it wrong)

June 12, 2009 - 7:02pm

Nice post as usual. I've been wandering through my RSS feeds these days without finding anything interesting to read. I must admit i miss your posts.

June 12, 2009 - 7:24pm

If blog posts were more profitable I would do it more. But the sad thing is that when we made no blog posts over the past couple weeks our new paying subscriber rate did not drop off at all, so the blogging is basically charity work that loses money most days.

June 12, 2009 - 11:51pm

But then again, that was just a 2 week period. Actually, I wouldnt be surprised if the # of subscribers actually went up if there were less blog posts (in the short term).

In the long-term however I thnk it would be a pretty bad strategy, because you need to be posting (or have somebody else post) enough to keep your traffic levels (and thus the number of potential customers) to this site high enough, right? Maybe you could get away with less, but if you stopped posting to this blog altogether, traffic and number of subscribers would probably go down a ton (unless of course most people who sign up come through WOM anyway)..Sorry for the brabbling LOL ;)

PS: It reminds me of some web analytics blogger (not sure who it was) observing that the number of his subscribers went up, when he posted less.

EDIT: I hope you dont misunderstand this comment - I do appreciate your posts just as much as the other guy who c ommented - so please keep some blog posts coming every now and then, even if my guess is totally off and its really just charity work with no ROI for you ;)

June 15, 2009 - 10:58pm

has anyone noticed that compusa.com and circuitcity.com are clones of each other? I'm wondering if Goog will still list both domains or snap one of them with a duplicate content penalty.

look at:
http://www.compusa.com/applications/category/category_tlc.asp?CatId=2814...

&

http://www.circuitcity.com/applications/category/category_tlc.asp?CatId=...

nice...

June 16, 2009 - 2:43pm

Google will allow both of them to rank. And just remember that next time you hear a search engineer talk about no value add duplication and talk down the affiliate & SEO industries.

If I would have scrounged together $14M, bought that domain name, put an affiliate feed up, and put my name on it, then it is almost 100% certain that Google would burn it to the ground. They basically did the exact same thing and it is considered legitimate. THAT is the advantage of brand, scale, & AdWords ad spend.

July 10, 2009 - 4:01pm

Traffic has tripled since the acquisition. From the most recent Compete.com marketing email...

Systemax, behemoth multi-channel computer and consumer electronics retailer and owner of popular online properties like Tigerdirect.com and CompUSA.com, purchased Circuit City’s remaining assets after it declared bankruptcy in November of last year. On May 23, Systemax brought CircuitCity.com back to life and June’s data shows that the site is off to a good start. While the 1.4 million UVs may only be around 13% of the traffic the site experienced when it had national brick and mortar presence (close to 8 million people per month), it represents almost 50% of TigerDirect.com’s traffic (3.3 million UVs) and 40% more than CompUSA.com received in June (997,000 UVs).

With 12.4 million total combined visits in June to their three big Electronics properties, Systemax managed to attract 5% of all visits to the Electronics Shopping Sites category, more traffic than newegg.com and up in the ranks with bestbuy.com (3rd), apple.com (2nd), and dell.com (1st).

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