Every internet marketer knows the importance of discovering good and profitable niches. Many internet marketing gurus have a very simplistic way of teaching about niche discovery. The sum total of some gurus' teaching on this can be summarized as:

1. Choose a topic that you like, have experience or are interested in.

2. Take the main keyword from this topic and plug it into a keyword research tool.

3. Look at the search count. If it is about 30,000 per month, it's a good niche. If it is below 30,000 searches, there is very little market and therefore it is not a good niche. If it is way above 30,000 searches, there is probably too much competition and therefore it is risky to enter this niche market.

That's it. Based on those three steps, you are supposed to find a niche. What's wrong with such a teaching?

Firstly, there is no research into the competition. No step is taken to discover how strong a competition you face in that niche.

Secondly, there is no research into long-tail keywords. Long-tail keywords are defined as keyword phrases of at least 4 words (the more words, the better). Every marketer knows the importance of long-tail keywords. Long-tail keywords can lead you to lucrative sub-niches.

Thirdly, there is no research into the tendency of the searchers to buy. It's not only a matter of whether the searchers have money or not. Some people in a particular niche market may have money but are not intending to buy anything.

So here's how the gurus really do their niche and keyword research:

1. Examine your own interests, abilities, knowledge, experiences. Anything from these may be a potentially good niche to market to.

2. Identify what's hot in the market i.e. what is currently the most talked-about thing, what's buzzing or new in town. Is this a potential niche?

3. From the above two steps, identify potential niches. Then run these potential niches through these 'filters':

a. Are people in this niche ready to buy and not merely information seekers or looking for freebies? For example, 'how to score an 'A' in your SAT examination' would probably not be a very lucrative niche because it would interest only students who may not have the money to buy anything much.

b. Is there a problem that the people in this niche cannot solve themselves? Any niche involving technical expertise would nicely fit into this criteria. For example, 'how to solve Windows Vista registry problems' would likely be a good niche because very few people are technologically competent enough to deal with these problems.

c. Do the people in this niche have an urgent crisis that needs to be overcome? The more urgent the better. For example, 'how to stop your teenager's drug habit' is an extremely urgent crisis that begs for answers.

d. Is there an 'evergreen' need in this niche that is not a just a fad? 'How to improve your golf swing' is an evergreen need compared to 'strategies for World of Warcraft' (World of Warcraft is a PC game). Once the fad for World of Warcraft is over, the market in this niche disappears.

Obviously, the more 'yes' answers you get to the above questions the more potentially profitable a niche is.

4. Once you have identified a potentially profitable niche based on the steps above, it is time to look for some long-tail keywords. These long-tail keywords will reveal some sub-niches which you can further profit from. For example, if you type in 'golf swing' into Wordtracker, you would get a whole list of related searches. Look for keyword phrases with four words or more. Some of them are 'stack and tilt golf swing', 'biomechanics of golf swing', 'what is the proper weight distribution during the golf swing' etc.

5. To find out how much competition there is in this niche, simply type in all the keywords you have into Google's free keyword analysis tool. This tool will give you the estimated advertiser competition (which is the same as marketer competition), average search volume for the previous month and average monthly search volume. The great thing is that this tool also gives you synonyms for the keywords which means you get more keyword suggestions. You identify keywords with as little competition but as many searches as possible.

The steps above represent a much more complete way of niche discovery. You will not only find profitable niches but also the relevant keywords that go with these niches. By doing this you make a solid start in your niche marketing.