Building niche sites is all the rage these days.
The basic strategy is very simple. Find a niche market that is not oversaturated. Develop a list of related keywords people are searching on. Then write an article optimized for each one of your keywords. Once you have your articles, upload them to your site. Monitize your site with affiliate links and Adsense.
For this kind of niche site to be effective and make money, it is imperative that you get free traffic, and a lot of it.