Is it worth buying a GREAT domain with rank?

[love-seo-goodness]

Hey Guys,

I am in communication with the owner of a domain with very good domain rank - that ranks well for keywords important to me.  Strangely enough the website it terrible?!  (I though Google valued "content" these days?!).  Anyhow, it's link profile is tidy including sites such as DMOZ.

His asking price for the domain is SUBSTANTIAL, however where it ranks for some keywords would be valuable for our organisation if we could leverage its authority.

My questions are:

1)  Is it worth buys a GREAT domain with a crappy website that ranks for keywords that are important to us?

2)  (if the answer to 1 is YES) How should one go about leveraging the rank to benefit our site/business?

3)  What would be the best way to utilise the site - redirects?  Build out some kind of content and link to main site?

Anyhow, hopefully some of you have great experience in this domain in the current Google Panda/Penguin white hat world?

Would REALLY appreciate your thoughts!!

[EGOL]

OK... you say that you have....

-- GREAT domain

-- Great rankings

-- Valuable keywords

-- Tidy link profile

-- horrible website

That gets my blood pumping...  I would be sniffing this site to see if I can do these...

-- improve the SEO and triple the traffic

-- redesign the site and make it twice as easy to use and double the conversion rate

-- create new content to make it more credible and go after new keyword that will double the traffic

-- reformat the product pages and double the income

-- so, after you triple the traffic from SEO, double conversion rate, double the traffic with new keywords and double again with better product pages.... this site will be making a fantastic amount of money

This, to me sounds like a candidate for a flip.  A 301 redirect might be selling a champion racehorse for horse meat.

If this site was under my nose I might be grabbing it and taking away the sales from everyone else in that niche.

(No guarantees on the above... depends upon the attributes of the site you are starting with, your skill set and how hard you are willing to work)

[TomRayner]

Hey Brent

To me, this doesn't look like a wise investment.  Regardless of its link profile, I'd be much more inclined to try and rank your current website rather than buying this domain and 301 redirecting it.

In any case, we can try and look at it from a financial standpoint and see if it is worthwhile.

To estimate the worth of ranking for those keywords, let's do some very rough estimations:

Take the local exact match search volume - example, 6,100.

Take the average click through rate for rank 1 - example 40%

Take the average conversion rate - example 3% (your mileage may vary greatly)

Take the average value of a conversion for that keyword - example £20.

So, 6,100 x 40% = 2440.  2440 x 3% = 73.2.  73.2 x £20 = £1464 - this is your average value for that keyword.

How much more than that amount is the asking price?  What would be a comfortable investment for you?  3 months worth, 6 months?  You may be able to find a comfortable price you'd want to buy at.

If you did buy the domain, 301ing the old domain to your site will pass on all of the value of their link profile, which in turn might help you rank in its place.  The important thing to remember, however, is that this is all theory.  The 301 redirect may not work that way and the site in question might not rank for that keyword for much longer, in which case the purchase would be pointless.

It's for those reasons why I would concentrate on trying to rank your current website.  If you're thinking about investing, turn it around and think what you could do with that budget instead, or even half of it.  You could create rich content, infographics, tools or plugins to try and rank higher in organic search, you could invest it in PPC adwords, you could look at display advertising and retargeting networks and so on.

You may find you'd make your money go further investing the money elsewhere.