My preferred online business model is developing niche websites. I develop a small site - usually with about 30 pages indexed in the search engines. I then use standard Search Engine Optimization techniques to get the site to rank in the search engine results. I then make money when people click on the advertising or buy an affiliate product.

Benefits of Developing Multiple Niche Websites

I prefer to diversify. The main risk of working at a job is that if you lose your job you lose your income. It can be the same in an online business if you rely on only one income stream or only one website. If the website suddenly falls out of favour with Google - your income is gone. If the affiliate program you have been using suddenly decides to drop you then suddenly you have no income.

Also, when you are beginning to learn how to make money online the niche website online business model allows you to learn and get it wrong without making a huge investment of time or money. Although there are ways of doing things online that will dramatically improve your odds of succeeding, there is no definitive list of task which guarantees that your site will rank #1 and therefore earn a zillion dollars for you (BTW if someone tries to sell you such a system run away - its a scam).

There is an element of art to getting websites to rank and you learn a lot from experience - diversification will give you that experience.

Key Steps in Developing Niche Websites

1. Find a buying keyword phrase
2. Determine your monetization.
3. Develop a mini-site or blog focused on your keyword
4. Build backlinks to your site which are anchored with your keyword phrase
5. Rinse and repeat.

What is a Buying Keyword Phrase?

All a buying keyword phrase is something that a potential shopper types into Google. For example if I type "honeymoon destination" - I am probably day dreaming or at the very early stages of deciding where to go on honeymoon. If however I type something like "Hawaii resort honeymooners package 5 star" - its more likely that I am getting closer to actually booking something.

My favourite keyword tools is Google's own free adwords tool . You may want to use these options: select "phrase match" rather than "broad" - you want searches which include "honeymoon destination Hawaii" not "honeymoon with my parents who thought their preferred destination was Florida though later then went to Hawaii". Also add the cost per click (CPC) column to see what advertisers are paying for Adword's adds. This is particularly relevant if you are going to monetize your site using Adsense - but its not a bad rule of thumb for other affiliates too. Remember that as a publisher you will not get the CPC that advertiser pays - expect around 20%.

Decide on Your Monetization Method.

Yes before you build your site decide how you are going to monetize. The main monetization methods are;
  • pay per click: Google Adsense is the premier program on this one.
  • affiliate programs physical product: eBay and Amazon are the biggest players in this area. They provide widgets and other links which can use on your sites;
  • affiliate programs for e-books: ClickBank is the biggest site for these products - typically the commission is a lot higher than you can get from eBay and similar - but the niches are specifically informational;
  • affiliate programs for leads; sites such as Commission Junction and clixgalore have hundreds of advertisers who will pay for leads, potential customers, which you introduce via your site. Products range from hotels and tours to beauty treatments and insurance products;
  • sell your own product: you can develop your own physical or informational e-book and sell it on your site;

In fact if you are struggling with finding keywords try doing it the other way around find a product on Amazon or Clickbank and look for keywords which people looking for the product might search with.

Developing a Mini-Site or Blog

Developing a niche website - often using WordPress - is probably the easiest way to develop a site. WordPress is easy to use and has a huge amount of support available on the software. Note that I am talking about using the software on your own domain not on the free to use wordpress.com (which doesn't allow advertising). Choose hosting which supports one click installs of WordPress - it should be no more difficult than that. You will want to customise WordPress with themes and plugins but usually I can now install a new blog from scratch in less than 10 minutes.

You also need to ensure that you are doing correct on-site SEO so that you keyword, or varations thereof are included in your site's title, meta tags and in post titles. Each page needs to include preferably original content which is useful to the reader - just repeating the keyword over and over will just get you banned forthwith from Google.

Build Anchored Backlinks

Although most beginners really focus on making a pretty site- the most important thing for ranking in Google and other search engines is the number of links pointing to the sites - its a popularity if you like, winner takes all!

Anchored backlinks can come from comments on blogs or forum signatures where you included your keywords anchored to your site. Article marketing still works as does submitting articles to sites such as InfoBarrel and HubPages . You can also get anchored backlinks from Social Media sites such as technocrati, FaceBook and Twitter.

Rinse and Repeat

I've included a lot information in this article but this is a fairly large topic. The main steps remain the same for most people but every entrepreneur brings their own particular skills and spin to their business.

I'm a member of the KeyWord Academy run by respected Internet Marketers Courtney Tuttle and Mark Mason. Its not an expensive program but it provides as great deal more information using the same approach I have outlined above. There is an helpful community and regular webinars. You can check it out and decide whether its for you for just $1 for the first month.