For Sale: An Incredible Money-Printing Crossword Business
Niche websites are unreal profitable (sometimes)
I was on my couch.
Kicked back for another day of doom-scrolling TikTok.
Wondering why U of Alabama sorority rush videos are so popular.
When this business for sale listing hit my inbox:
It had to be a typo!
87% EBITDA profit margin?!
Incredible because many companies operate at more like 8.7% EBITDA.
But, $4.8mm in profits from… a collection of online puzzle games?!
Crazy stuff.
As usual, when I smell money, I dig in to understand what’s happening here.
It’s fascinating.
The Numbers
· $5.5mm in 2021 top-line revenue
· $4.8 million EBITDA
· 78 million monthly pageviews
· A 75% customer retention rate
· ~10 employees (that’s $480k PROFIT per employee!)
· Founded 1999
· Email database of 300,000 subscribers
· 100% organic traffic
The Power of Google Placement
100% of visitors are organic.
This means you’re not paying Facebook or Google for visitors.
That’s great – get in a top 5 spot on Google results for a popular keyword like “play scrabble online.”
Watch the pageviews (and profits) roll in.
Given crossword/scrabble/boggle players are upscale, advertisers will love you.
Many of these sites had BestBuy or State Farm running display ads on them.
The Double-Edged Sword
Live by Google, you can also die by Google.
Our family learned this the hard way a decade ago.
Early to selling sparklers online, we took our eye off the ball for nine months.
We lost the SEO ranking for our keywords.
And it was impossible ever to get back.
Businesses like this usually start early (1999 in this case).
Grab their corner of Google results.
And hold on for dear life!
Beware the Broker
As I’ve spoken about this deal with my friends, three themes came up:
1) This broker doesn’t have the best reputation.
They said to be sure to double-check everything they’re claiming. There may be some dirt under the covers. Or numbers that just aren’t true.
2) Display ads are fragile, so you’re betting the ad rates stay healthy.
They crashed when the economy slowed in past recessions. “There are easier ways to make money than paying top dollar for this,” one said.
3) The Google-dependent nature of this business makes it unsellable.
The seller will likely want 4-7x EBITDA because they’re making $4.8mm a year owning it.
All from a <$10k investment!
But a buyer can only afford that price if the future is predictable.
So, we have a business that likely won’t ever sell.
But I wish I owned!
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I’d love to hear your thoughts.
Thanks, Michael
PS - Would you do me a favor? Consider sending this to a few friends and suggest they subscribe:
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PS – here is the listing FYI.
