Investing in Information
How Organizing Information Can Pay Off

Disclaimer: This article is not intended as investment advice. Rather, it is an attempt to reconceptualize information as a commodity in which one can invest. All calculations are hypothetical and in no way represent actual or expected results.

Putting Your Money To Work

A professor once asked me what computers and humans have in common. He said, “They’re both informavores. They both consume information.”

Indeed, the internet has made information a commodity more sought after than gold. And because of this a person can make a great deal of money by developing, creating and organizing information.

There are two ways to do this: do the work yourself or pay someone else to do it. In either case, you are investing (either your time or your money) in the development and organization of information.

There’s an old adage that says you can only make money by spending money. While its not completely true, it does hit an important point: that in the world of investing, there isn’t much of a free lunch. Someone or something has to do work.

In the stock market, you put your money to work. Theoretically, you are giving your money to a company in the hopes that they use it to make more money. All investment vehicles employ the principle of putting money to work.

So the big question is: can you put your money to work in a successful way on the internet? Can you invest in the commodity that the internet exploits?

The answer to this question is a resounding yes and there are several ways to do it. In every case, you will be either creating new information or organizing old information.

Creating useful and unique information (or content) is tough work. It takes planning, research and a bit of creativity. Putting a new spin on old ideas can be a useful approach. The key to creating information is to be systematic and disciplined. Brainstorm about topics that are interesting to you and about which you have interesting ideas. Write several articles about a similar topic. Write slight derivations of the same article from different perspectives.

If you find creating new information is difficult, and feel like it is a waste of time and effort, then you can consider paying someone else to write content for you. You’ll need to make sure the person is trustworthy and a good writer. Don’t be afraid to pay a little more for a good content developer. Think of it as an investment in quality.

To make the investment payoff, you’ll want to have several hundred pages of unique, useful information that meets the needs of a particular niche interest. Expect to pay at least $1200 for each batch of 100 pages of standard 400 word articles. That’s about $12/article. You should at least be involved in the selection of the topic for each article.

Ok. So let’s say you’ve spent $3600 to have 300 pages of content developed. Where does the “investment” part come in? Well, in a very unsatisfying way, you’ve already invested in the bettering of the information space on the web, by organizing information in a particular way that you think will be helpful to people. But that’s not what I’m after in an investment. I want to make money.

So how do you make money off of web content (information)? To do so, you’ll need to look into Ad Publishing systems like YPN (Yahoo) or AdSense (Google). These systems let the individual web-publisher place advertisements on each web-page and they share the revenues with the web-publisher.

Let’s say you have 300 pages of high-quality content developed for the web and you’ve paid $3600 for it. Now its time for you to do some work. You need to make your website known. Submit your website to search engines. Solicit links from other websites. Get your website listed in various online directories.

For the first couple of months, your website may not do very well. But, if you’ve taken the steps outlined above (especially the part about putting together useful information) your bound to get a nice flow of visitors after a while. An sooner or later, those visitors will bring you advertising money.

Let’s say that each of your 300 pages makes .05 cents per day. That turns out to be $15/day. $15/day turns out to be $450/month. $450/month turns out to be $5,400. Even if you don’t make any money the first year, in the second year you will have earned close to double your initial investment. Not bad. Even if you were doubling your money every five years, the investment would do better than most of the stock market indexes.

So I’ve outlined one way to organize information: create and develop it. But there’s another way: by organizing old information. This is the strategy used by websites like the DrudgeReport. The DrudgeReport is successful because Matt Drudge selects headlines and images that he thinks people will be interested in. He also receives information from high-level sources in the media and politics. He rarely creates new content.

By organizing old content, you introduce new information into the equation: your perception of what’s important. People value recommendations and suggestions. People want to be able to separate out the wheat from the chaff. If you do a good job of this then you’ll be viewed as an authority in your niche, and people will comeback looking for advice. How do you make money off this method of organizing information? Same idea: place advertisements on your website.

See Also: Investing in AdSense Content