After 2000, Blogs are emerged as a New Asset Class – Blogging Business. Owning a Blog is exactly like owning a Business. A Blog is a Company and its owner is a CEO. In fact, behind many popular Blogs not a single person works but a team of people work.
But unfortunately we don’t have any proper Blog Valuation System. Blogs are Intellectual Properties means mind work. Another thing is that, for valuation of any Asset, we need to know its Cashflow & Revenue. But right now all the Blog Companies are fully privately owned. None of the Blogging Company is publically held.
Google & Yahoo are publically owned Internet Companies and that’s why we have their Quarterly Financial Statements publically available and that’s why we can know the proper Valuation of these Businesses. Right now none of the Blog is publically owned and that’s why it is really difficult to do the proper valuation of popular Blogs. So unless the Blog owners tell us about the Financials of the Blog, we can’t know the Valuation of any Blog.
In short, the task of valuing the largest blogs is impossible. Here are the Valuations of some popular Blogs according to their probable earnings according to the web traffic they receive and eCPM.
1. The Gawker Properties: $150 million. Gawker, ValleyWag, Gizmodo, Wonkette, and a number of smaller websites. The company claims 30 million monthly unique visitors. According to audience measurement service Quancast, that number is fairly close. Compete shows that traffic to most of the large sites in the group more than doubled from a year ago. If the sites generate one-and a-half page views per unique visitor and the total CPM value of the multiple advertisers on each page is $20, Gawker is an $11 million business which is still growing quickly. The company does not appear to be staff-heavy, so it is imaginable that the margins on the business are 50%. Would the business be worth 15x revenue or 30x operating profits? Could be.
2.MacRumors: $85 million.Blog knows more about Apple than Apple management does. It ranks No. 2,700 in Alexa. Compete shows 544,000 visitors and moving up quickly. Quantcast puts global unique visitors at 5.3 million. Page views at 33 million, which seems a bit high. Advertising looks high-end and solid, probably at least $30 per page CPM. Business should do at least $12 million and have a high margin, estimated at 60%. At a 12x multiple.
3.Huffington Post: $70 million. Several websites commented that HuffPo might be worth $100 million when it raised $5 million late last year. Arianna Huffington said to Portfolio that the business was in the process of becoming profitable. In late 2007 management claimed that the website had 4 million unique visitors per month and would bring in $7.5 million for the year. The website is now in the top 1,000 according to Alexa and its ranking has been climbing, probably due to the election. Compete shows a similar trend with the website reaching over 1.8 million people in February, up 245% from the same month last year. The problem with the business now is that its value has probably peaked. The huge increase in visitors is likely to fall-off once the election is over. HuffPo has tried to building out other content sections, but it is likely that they cannot replace the visits from the core audience which visits the site for political comment. That means that the company will have all of the costs (40 or 50 people) and a falling number of visitors. Revenue should actually begin to fall in 2009. With a business which is likely to shrink next year, it is hard to believe that the company is worth more than 10x revenue.
4.PerezHilton: $48 million. Is No 755 in Alexa. Compete show 1.3 million visitors a month. Quantcast, probably the most reliable of the measurement tools when the sites use its code shows 10.1 million uniques. Quantcast puts month page views at 191 million. That seems high. It would put revenue at $900,000 million a month with a $5 CPM. The site is as much a personality cult as it is a destination. But, it probably runs with margins over 50%. That would put operating profit at $11 million. Founder is central to business. CPMs are low. Give it 8x operating profits
5.TechCrunch: $36 million. The TechCrunch network claims almost 3.2 million unique visitors and 14.6 million page views. The page view number sounds very high. It would be an unusually high PV to unique ratio. The company also has a conference business. Alexa rates TechCruch at the 951st most visited site in the world, but also shows that the company’s audience is not growing. Compete shows the site’s audience as growing but having a modest 900,000 visitors in February. Based on the advertisers running at TechCruch and the high value of its concentrated audience, the CPM yield on each page could certainly be $30. That would put revenue from advertising at $438,000 a month or $5.3 million a year. Ad another $600,000 for conferences based on 500 attendees at $1,250 per person. TechCruch is a $6 million business. With people and conference costs, the firm’s margins are probably about 40%. The firm does have a fairly large staff and relies on founder Michael Arrington for a lot of its best content. That is a risk. Fifteen times operating profit in case the founder is hit by a bus.
Read More on 247Wallst.com about the Valuation of other Famous Blogs……!!!!
But unfortunately we don’t have any proper Blog Valuation System. Blogs are Intellectual Properties means mind work. Another thing is that, for valuation of any Asset, we need to know its Cashflow & Revenue. But right now all the Blog Companies are fully privately owned. None of the Blogging Company is publically held.
Google & Yahoo are publically owned Internet Companies and that’s why we have their Quarterly Financial Statements publically available and that’s why we can know the proper Valuation of these Businesses. Right now none of the Blog is publically owned and that’s why it is really difficult to do the proper valuation of popular Blogs. So unless the Blog owners tell us about the Financials of the Blog, we can’t know the Valuation of any Blog.
In short, the task of valuing the largest blogs is impossible. Here are the Valuations of some popular Blogs according to their probable earnings according to the web traffic they receive and eCPM.
1. The Gawker Properties: $150 million. Gawker, ValleyWag, Gizmodo, Wonkette, and a number of smaller websites. The company claims 30 million monthly unique visitors. According to audience measurement service Quancast, that number is fairly close. Compete shows that traffic to most of the large sites in the group more than doubled from a year ago. If the sites generate one-and a-half page views per unique visitor and the total CPM value of the multiple advertisers on each page is $20, Gawker is an $11 million business which is still growing quickly. The company does not appear to be staff-heavy, so it is imaginable that the margins on the business are 50%. Would the business be worth 15x revenue or 30x operating profits? Could be.
2.MacRumors: $85 million.Blog knows more about Apple than Apple management does. It ranks No. 2,700 in Alexa. Compete shows 544,000 visitors and moving up quickly. Quantcast puts global unique visitors at 5.3 million. Page views at 33 million, which seems a bit high. Advertising looks high-end and solid, probably at least $30 per page CPM. Business should do at least $12 million and have a high margin, estimated at 60%. At a 12x multiple.
3.Huffington Post: $70 million. Several websites commented that HuffPo might be worth $100 million when it raised $5 million late last year. Arianna Huffington said to Portfolio that the business was in the process of becoming profitable. In late 2007 management claimed that the website had 4 million unique visitors per month and would bring in $7.5 million for the year. The website is now in the top 1,000 according to Alexa and its ranking has been climbing, probably due to the election. Compete shows a similar trend with the website reaching over 1.8 million people in February, up 245% from the same month last year. The problem with the business now is that its value has probably peaked. The huge increase in visitors is likely to fall-off once the election is over. HuffPo has tried to building out other content sections, but it is likely that they cannot replace the visits from the core audience which visits the site for political comment. That means that the company will have all of the costs (40 or 50 people) and a falling number of visitors. Revenue should actually begin to fall in 2009. With a business which is likely to shrink next year, it is hard to believe that the company is worth more than 10x revenue.
4.PerezHilton: $48 million. Is No 755 in Alexa. Compete show 1.3 million visitors a month. Quantcast, probably the most reliable of the measurement tools when the sites use its code shows 10.1 million uniques. Quantcast puts month page views at 191 million. That seems high. It would put revenue at $900,000 million a month with a $5 CPM. The site is as much a personality cult as it is a destination. But, it probably runs with margins over 50%. That would put operating profit at $11 million. Founder is central to business. CPMs are low. Give it 8x operating profits
5.TechCrunch: $36 million. The TechCrunch network claims almost 3.2 million unique visitors and 14.6 million page views. The page view number sounds very high. It would be an unusually high PV to unique ratio. The company also has a conference business. Alexa rates TechCruch at the 951st most visited site in the world, but also shows that the company’s audience is not growing. Compete shows the site’s audience as growing but having a modest 900,000 visitors in February. Based on the advertisers running at TechCruch and the high value of its concentrated audience, the CPM yield on each page could certainly be $30. That would put revenue from advertising at $438,000 a month or $5.3 million a year. Ad another $600,000 for conferences based on 500 attendees at $1,250 per person. TechCruch is a $6 million business. With people and conference costs, the firm’s margins are probably about 40%. The firm does have a fairly large staff and relies on founder Michael Arrington for a lot of its best content. That is a risk. Fifteen times operating profit in case the founder is hit by a bus.
Read More on 247Wallst.com about the Valuation of other Famous Blogs……!!!!
