Someone posted a very interesting question in Yahoo Answers: when you start a website, should you build a broad authority site, or a smaller niche site? The asker wants to know the impact of the size of the website in terms of search engine optimization as well as potential revenues.

Personally, I would go for a broad authority site, as it has the best potential for huge traffic as well as higher revenues. But there are a number of pros and cons for each approach, and here are some of them:

BUILD AN UMBRELLA SITE

• can grow to become an authority site, which means great search engine rankings for a wide variety of keywords
• can be a one-stop destination of target audience where everything they need is on one site
• if you lose some keywords, the site still has hundreds of other keywords
• huge traffic potential
• faster to get links as other sites are more likely to link to this big site
• depending on the business model, a broad authority site would be easier to monetize and can give potentially higher revenues

Cons:

• requires more resources to create, develop, and grow
• when you get hit with a search engine penalty, your entire business falls

NICHE SITE

Pros:

• easier to create, develop as it has a smaller scope
• allows you to dominate a segment, especially if the field is hard to crack with lots of authority sites

Cons:

• limited traffic
• hard to grow and get traffic
• to earn more, you need to have more of these smaller sites

For years, we’ve followed the broad authority website approach, and it works great for our business model (advertising). It is easier to attract advertisers to the site, and even using third party ad programs such as Adsense yields extremely good results because it is harder to be smartpriced, it has more diverse keywords, and traffic is better.

BUT — we got hit by a Google penalty 3 year ago, and lost 80% of Google traffic. That hurt big time, so we are adding other smaller niche sites to at least provide some backups for the main site. So while it is good to have a broad authority site, never put all your eggs in one basket!