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How does one value a blog? (Hint: It’s really about Revenue)

How does one value a blog? (Hint: It’s really about Revenue)

How does one value a weblog?

One method, conceived mostly in jest, used the acquistion price of Weblogs, Inc. along with some Technorati links to develop their own valuation scheme. I, of course, like this valuation scheme because it values The Blog Herald at nearly $900,000. I can assure you that this is far more than we paid for it back in February.

Over at Bloggasm, Simon has developed a new valuation system that’s somewhat more refined than these simple ones:

Because of this, I set out to statistically find a formula for predicting a blog’€™s worth, so somebody that is thinking about buying a blog can use it to estimate how much money he or she should spend buying out the blog. Please note that this only predicts the worth of the blog itself, not the blogger as well if you’€™re planning on bringing him/her on board.

His system values The Blog Herald at around $55,000, which is alot closer to what we paid than the nearly $900,000 using the method above.

This is a good step forward, I believe, but it’s still somewhat off the mark.

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In the end, I still believe that some of the old ways of valuing a business still apply in this odd online world that we live in. A multiple of monthly income somewhere between six and eighteen months still make sense to me.

Maybe I’m old school…

Darren has more

View Comments (7)
  • Matt,

    Nothing wrong with the old ways of valuing a business, that’s for sure – just gotta let everyone know that business comes down to revenue and not numbers of visitors, links etc., and some blue sky guesstimates.

    I have tended to find that buying on a multiple of 15x usually works better than under 10 – because such a higher mulitle usually means more solid growth with less risk has been taken into account, which is what you’re paying for at the end of the day.

    But blogging is a different beast in many ways. Many blogs are personality-based and it’s hard to find a tangible for that.

    That’s why, unless the blog has heavy numbers (not revenue) such as The Blog Herald did when you purchased it, I would find it hard to buy a blog that’s not totally content-related and can change hands without too much of a fuss.

    just my 2 cents worth :-)

    hey … why am I writing such a long comment – it surely deserves its own column here (which by the way, I have in my “to do” list to do some day).

  • I still can’t get some pricetags that are out there as Matt knows. However, it sure is good fun to read about (and try out) all these price calculators out there. If nothing else it can always be a nice ego boost.

  • First, your blog is worth what someone is willing to pay for it. Most blogs are worth nothing since no one would ever pay for them for obvious reasons (i.e. they are not a business).

    If your blog is a business and you get to some level of decent revenue and traffic you can just use the metrics people pay for newsletters and content website. People who buy sites tend to pay 3-10x top-line revenue, and maybe 10-30x your earnings.

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