$12.4 MM for Your Site? 9 Factors for the Major Bankaholic payday.

Major blog payday:  A solo entrepreneur named Johns Wu has reportedly sold his one-man web site for $12.4 million.  Wow! 

Wu's Bankaholic.com provides rate information for financial products.  These include quotes on savings products like certificates of deposit, savings accounts, and money market accounts, as well as insurance quotes and credit card offers. The site also allows users to comment and rate banks and their promotions through social networking features.

With just one employee (himself), Johns built Bankaholic.com into a profit powerhouse that publicly-traded Bankrate, Inc. (RATE) has recently acquired.  On top of the $12.4 million up-front, Wu may earn an additional $2.4 million over the next 12 months if the site reaches certain performance thresholds.  That adds up to almost $15MM.

How can you turn your web site into a cash cow? 

Here's my analysis of 9 factors that make Bankaholic such a successful online business:

1. Clear Value Proposition:  Bankaholic's focus on publishing the best savings products deals clearly answers the "what's in it for me?" question that every site visitor arrives with.
2. Target Niche:  Financial information is a huge marketplace.  Bankaholic has succeeded by picking a well-defined niche (competitive and comparison info on consumer savings products) within that huge marketplace to establish a brand and attract repeat visits.
3. Lucrative Advertising:  Financial services is a marketplace full of lucrative pay-per-click, sponsorship, and affiliate ads.   It's a competitive space but even minor success can be profitable because the ad clicks, affiliate bounties, and sponsorship dollars are larger than in most sectors.
4. Solves Problems:  Bankaholic's information is a "must have", not just a "nice to have".  Using the site well can literally put more money in users' pockets.  The site's slogan is "Bringing You the Best in Banking" - it helps consumers plagued by too many complex offers that they don't have time to decipher.  The site helps to filter that info and present it in useful bite-sized pieces.
5. Low Overhead:  Apparently Johns Wu runs this site by himself!  Sites based on redistribution of public information can be very inexpensive to operate.  Text-based content costs only the time of the person writing it, and when most of that info is publicly available for free, production can be incredibly cost-effective. 
6. Viral Need:  Bankaholic helps its users save money.  This leads to positive word-of-mouth as satisfied users tell their friends.  Very inexpensive marketing.
7. Recurring Need:  Savings products, insurance policies and credit card offers change constantly.  Their users need to monitor their performance and renew or change their investments constantly, too.  This creates a recurring need for users to return to Bankaholic.
8. Wide Geographical Focus:  Bankaholic's niche is not limited to one town or state - it reaches the entire US with lots of relevant content.  Aggregating widely-dispersed information is a great use of web site publishing.
9. Strong SEO:  The site does very well in search engine rankings.  This attracts a lot of organic (fr-ee) search engine traffic from customers already interested in certificates of deposit, bank savings rates, credit card offers, etc. 

A one man web site selling for almost $15 million once again shows the incredible reach of the Internet.  So, I'm filing this story under "motivation", too.   

Congratulations, Johns!

What other factors contributed to this big sale? 

Are your e-commerce efforts reflecting most (if not all) of these principles? 

How jealous are you??

Comments

[Barbara Bailey]

What's incredible is the simplicity of the website. It's built on WordPress, a free blog software program, and even incorporates Google Adwords, a very easy way to monetize a site. Kudos to John Wu for his success. He is definitely someone to learn from and emulate.

[Himanshu Sheth]

Hi Scott,
This is quite interesting.Remember PaidContent getting acquired and it made all the news.And now Bankoholic is much bigger news given that IT WAS A ONE MAN WEBSITE !!!!

You pointed a very interesting point : Wide Geographical Focus - And IMHO, both for PaidContent and Bankoholic are blogs, which provide very different information but had a WIDE geographical focus.

As Barbara has pointed out, site built on WP which makes things simple...

I wonder, if John could have also put some Ads of Banks(and I am sure they have sponsored him).....

Scott, you thoughts on these:
How do you feel that such a stage(like PaidContent and Bankoholic) reach in India...

There are so many Blogs that are quite famous but India-Business centric, what would make them reach this stage?

A very interesting and great news ..... Thumbs up to JOHN !!!

-Himanshu Sheth

[Johns Wu]

Hi Scott,
Nice article! (my ears are burning) haha

[BestCred]

Wow, very nice article. You know, I totally agree with the 9 factors that made bankaholic sold for that amount of money. I will take note, thank you.