Making $470m with a Bunch of Comments

yelp-googleBack in 2004 Yelp started a web site that listed local businesses, and encouraged people to contribute ratings and comments. Take a look at Pandora’s Jewelry store for an example of a page that is content-rich thanks to the crowd contribution. I have a ratings plug-in on some of my web sites, but what you need to make these things work is the critical mass because people need to see comments before they make comments. Reaching this tipping point is the secret sauce that converts a simple idea into a valuable web property.

Yelp had the benefit of $31m in venture funding to invest in developing a great interface and generating traffic, and now TechCruch is reporting that they may cash in to Google for $500m.  It’s not a bad return for the founders, who are former PayPal execs.

In an earliet post I reported how Google has started suffocating organic search results by pushing them down below the fold. A big part of this is the interactive local maps with ads popping out of them. If the Yelp acquisition goes ahead we can expect more of this. If you are an internet marketer targeting the long tail, then it might be time to start thinking about investing in an authority domain, or raising $31m for that great idea you have.

Right now you can make a few thousand bucks a month from information and affiliate sites, but my sense is that this is going to get harder and harder. With people accusing Demand Media and its eHow site of polluting the internet, then mini sites of lower quality will get taken down with it if there is a clean up.

I welcome your comments below – it’s my $470m strategy.

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  • Yep, you don't want to have all your eggs in one basket and then get Google slapped, or worse still lose you domain in a dodgy UDRP decision.

    If you define an authority domain as one with 300 articles and a top three SERP I don't have one myself yet.

  • Having an authority website it's still a good choice, but what happen if you lose it? Mini sites makes less money but at least if you lose one of them you have all the others.

    My personal choice is to have both ;)

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