Abritrage

What are your thoughts on arbitrage?

I have never done this since I'm afraid google would boot me out in one fell swoop, but obviously alot of people think this isn't likely to happen.

I also think that with the new adsense rules alot of people are going to be surprised since google now clearly says no to copyrighted content in their TOS (a good thing!) and I see that alot of these arbitrage guys simply steal content and/or rewrite it.

I'd like to know if anyone here does it and is successful at it. Do you think it's ethical to do?

I think it's ethical in some respects, although it's cluttering the internet up as well. Of course it's giving advertisers more targeted traffic, but at the same time a lot of crap is being made as well.

It's a short term thing though and it's not something I'd be keen on. I'd always be thinking when's it all going to stop, and all the income associated with it going to dry up. I'd rather spend time working on long term projects.

I wouldn't do it myself, as that's not what I'm good at.

I met a guy who runs a pretty popular website (PR6 now; PR7 last year) from his house here in San Francisco. He told me about regular get-togethers that he and some WMW members had at various bars here in the City. He told me that there were a couple of people he knew who were making $30K/month doing it. When they got caught, they just got new accounts.

I did a little PPC arbitrage last year with YPN and a few third-tier search engines (for driving traffic), made a couple dollars a day. I think you would have to be bidding on 100,000+ keywords to make anything significant. Also, everything would need to be automated, no building sites by hand.

I'm not really interested in playing cat and mouse games in terms of banned accounts. However, in principle I think arbitrage is a good discipline in that it forces you to seriously evaluate how a site makes money. If you can buy traffic and profitably send it to a website -- PPC, affiliate, membership, banner ads, whatever -- you have a very, very valuable skill.

Also, I think that the people using Adsense for arbitrage aren't the "massive" earnings. The really big earners are the guys that somehow are syndicating overture's results or are in domain parking programs.

I arbitrage - but not in the sense you are talking (I don't think).

I am not in the position of holding any great amounts of traffic (yet) - so when I launch a new site, I don't have the benefits of being able to send traffic to kick start it... so I buy traffic from the smaller PPC engines - its works great (and also gives me a chance to evaluate the potential and layout) :yawnb:

Also, when dealing with this topic try to get data on gross or net income. Any business that relies heavily on PPC advertising will usually end up with high gross income, but the net could be a tiny fraction of that amount (like spend 20k to make 1k).

Well, when I was doing it, it was roughly spend $1, make $2. Other people I've talked to were doing about the same, the best was spend $1 make $10. Of course the market forces can close these gaps quite rapidly. I haven't talked to anyone about it for months so I don't know what the current state of the game is.

I do it with some new sites I launch, and get the same results Cutter is talking of - a $2 or $3 return for each $1 spent.

The hard part is finding enough sustainable traffic. I find that cheap traffic will last for a short while then dry up, so unlexx you can launch lots of individual sites or pages to which you are driving traffic, the returns are small.

If you can automate the process, and produce 10s or 100's of pages regularly, and add a similar number of ppc keywords then no doubt the returns could be good. But the only way of doing that on a long term basis is through creating spam pages / scraping,