Last Wednesday I posted about a mystery blog for sale. It turns out the site is The Blog Herald, and it’s going to sell in the 60-72K range (36 times monthly revenues).
There’s a lot of talk over this: Was the site overpriced? Or is it really worth what it’s selling for?
The general rule of course is that a blog is worth what someone is willing to pay for it. I might also add that when there are three bidders in the price range, it obviously isn’t just a fluke.
But back to the numbers: the site is bringing in 2K a month of revenue. But what is it’s monthly profit? Let’s make an assumption: that you could replace Duncan Riley’s posts with comparable quantity and quality posts for $1k a month. This leaves us at $1k/month profit. And at our magic number 12, we can value the blog at $12K before adjusting the valuation for “bonus factors”.
Which, of course, this blog has many ‘bonus’ factors which would increase its value above just a 12x profit multiple.
- Diversity of revenue streams – the Blog Herald runs several types of advertising. This isn’t 2K a month solely from Adsense.
- Uber Google juice – If you had, say, a network of blogs, you could use the Blog Herald to link to them all and feed LOTS of Google juice into them.
- Profile – This is a ‘big’ site in the blogosphere, and having profile and readership can benefit you if you have other projects going. For instance, would anyone give a damn about Squidoo if you or I started it? Not a chance. But Seth Godin leveraged his profile to give it a lot of buzz, and in the process, gave it a much more likely path to success.
It’ll be interesting to see who the buyer is, and how exactly they leverage the site. For the record I do think the price is high (as in, it is more than I would pay), but I also think it’s silly to judge the valuation until we can see how the buyer leverages it.
@lcarley256: You have the right of it: stick it out. The increases will eventually be exponential. As you have more new content, provided you link to older posts, you will end up with more pages indexed, which in turn leads to more traffic, which in turn leads to more revenue.
I think Google Adsense is great program for little guys like me who have posted a LOT of content online but have yet to see a big return in revenue for my efforts. My topic is auto repair related info (over 150 articles!). The subject may not be as interesting as video blogs of people eating bugs and doing weird things to themsselves and others, but it is of interest to anyone who owns a vehicle and has a repair problem.
I began posting Google ads on my website this spring after reading numerous stories about all the money some people are making off Google. My experience hasn’t been anything to gloat about, and I’m not about to quit my day job. But the Google ads are generating some much-needed income and giving me incentive to keep the website going and growing. The Google revenues are slowly building (about 10% a month), and I hope to see bigger numbers as time goes on. It all seems to hinge on how many visitors a websites gets, and how many visitors click on ads. I’ve noticed my click through rate has slowly improved each month, too, going from 2 to 3 percent, up to about 6 percent. Apparently the Google ads become more relavant as time goes on.