So, how do you find profitable niches to build a site around? There are many strategies for narrowing down your choice of niche markets from using the overture search results and bid tools to checking competition using site searches in google. But even with these techniques you won't know for sure how profitable a niche is until you put up a site.
But putting up a high quality, good content site takes time, so I have now been using blogs to test my niche ideas before I build a full-blown site. It is very easy to publish a blog on a topic, and by throwing my adsense code on the site I can get a feel for the average price per click. If the blog can get traffic and the price per click is high enough (I shoot for around $.50 a click), I will then develop a full-fledged site around the niche.
This method does take about a month to get enough data from the blog in order to determine if the niche is worth persuing, but you can easily start several of these test blogs very quickly over that month so that you can find the most profitable niches. During the testing period I just through a couple of posts up on the blog and add a post every other day or so. These keeps the amount of time I spend on each test blog to a minimum.
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