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Originally Posted by buldozerceto
So my question is: Is it worth running a new directory now?
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I have been in the directory industry for near 7 years now, five of which running my own. Directories don't make money in the first couple of years... pretty much zip. If you want to make money quickly, slowly, anyway really, its not through directories. Let me be perfectly honest here; yes you can earn six figures from directories as my input has achieved that in the directory market already. Saying that though, you can make $100k a month other ways, ie. getting into the higher end market of affiliate marketing.
If you do a lot of A/B testing over a month on lets say.... ringtones; when tested correctly you can spend $30 - $40k a month on PPC ads to your landing pages and turn that into over $100k per month. Its not that hard, you just have to test your pages, test your approach, and really know the in's and out's of partner advertising platforms, ie. Google, Yahoo and MSN paid systems. You need to take the professional tests, which require little income really... Googles is only $1000 in advertising in which to test, learn and achieve certification.... not sure if it still is, but used to be when I did mine.
A directory is a hobby, its not for making serious money online. Most directory owners don't own them for making money, usually more other purposes whilst making a little money, ie. using them as platforms to build other sites that are making them even more money again.
You can get a small directory to turn over $50k a year without that much work or money invested.... though that is not much compared to what you can earn through something like affiliate marketing.
Whilst Google may be on a penalizing run at present, they are not the only search engine, and directories still hold much weight for Yahoo and MSN listings. Google will either eventually punish every directory as they want the monopoly on selling links through their own paid systems by removing as much influence as they possibly can from the web to influence their free rankings, instead they want paid advertisers, not free rankings. Yahoo and MSN are the same, they just aren't as smart as Google just yet to achieve this.
The problem though is that the webmaster community has hyped PageRank larger than it ever was, now those customers of directories submit based on PageRank, not on page rankings or traffic. I used to do the old 301 redirect to a high PR domain, wait for it to get the PageRank, then point it at my own site and create high directory throughput for these reasons, though now that doesn't work either. Basically, webmasters have undone themselves with link buying because people do so based on PageRank and not on throughput.
I wouldn't recommend going into the directory market now as a new entry.... you will fail before you begin unless you want to risk throwing $10k at your site for huge boosting on the premise that Google won't further punish directories. Big risk IMHO. Atleast existing directories can publish traffic throughput if required, new directories will have little to use as leverage.
All mine just got punished by a drop in 2-3 PR per site, yet my traffic has still increased. Unless you have that leverage, your in strife coming into the market IMO.
It is speculated that Google have punished sites that network, sites that sell sitewide advertising, sites that sell links in general.... and at the end of the day Google can do whatever the hell they like because they are that powerful nowadays. I did all those things.... oooopppppsssssss; though I didn't get punished as hard as some sites. Why? Nobody knows really and can only assume what they have done. Google may simply be tweaking a new algorithm again... all PR may return in another update.
At present I would say run as usual, though just beware if your going into a new directory to limit the funding you put into it until you know more on what Google are doing because funding comes from users at the end of the day, and those users want PageRank. If directories don't get much of that here on out, then you have nothing to sell really....
My honest opinion: tread carefully in the market at present and wait for Googles next roll of the dice. It would just be nice if they removed PageRank all together as that would solve many problems for directory owners then.