The first step to determine if a website is worth the investment is by the number of income streams it has. Most websites have more than one income channel such as Pay-Per-Click advertisement (Google Adsense etc), Pay-Per-Action programs (AzoogleAds, ClickBank etc) or selling of own products. Basically, this step is to analyze the current profitable channels and see if you can expand or add in other sources of income. Never rely only on one income source for a website.



The second step is to find out where are the traffic coming from. Most websites should have a healthy amount of constant traffic from the search engines followed by social bookmarking sites or regular visitors. If the majority of the traffic is coming from the search engines, proceed to ask the owner what are the keywords that brought in the traffic. Try out the keywords in the search engines and check out the search engine rankings of the site.

You should also check with the owner what are the top search engines that direct the traffic to the site. With these information, check the on-page optimization effort of the site and you may have more ideas for improvements after you have bought it.

The next step is to highlight the areas of possible improvements of the site. If you can come out with at least two quick fixes to the site that can increase the value created to the visitors, the traffic to the site will increase to the next higher level eventually. For example, if you can include an online tool to calculate the financial networth of a person in a financial blog, that would most likely benefit all your readers in a long run.

The fourth step is to check for back links to the site that you are interested to purchase. It is highly recommended to use Yahoo backlink analyzer to check for backlinks since it displays almost all the pages that linked to the site. You may want to use the Yahoo powered analyzer at USESEO.com.

With the above four steps, you should have no problems choosing a profitable website that can generate a stable income for some time. You are advised to check on the seller's history as well to know more about the seller's background before confirming the transaction.