Huffington Post and TechCrunch both have high valuations ($100m+). Yes, Virginia, social media and blogs CAN make money. Will 2010 see the further rise of social media proprietors?
Something that continually gets asked of me at conferences and workshops is “Where’s the Money?”. It’s usually said in a tone that implies that social media is so gosh- darn “social” and “friendly” that everyone gives everything away for free. Which of course is just rubbish. Currency itself has no inherent value except what we, the community/nation, put on it.
We value what we value – here’s the some of the revenue information and the valuation of two uber-blogs:
Estimated Value: $150 million
Business: An online newspaper/news aggregator and group blog.
Location: New York, NY
More Info: About The Huffington Post
CEO: Eric Hippeau
Investors: Greycroft Partners, Softbank Capital, Ken Lerer, Bob Pittman, Oak Investment Partners
Analysis: Many naysayers thought Huffington Post’s moment in the spotlight would fade away after the presidential election, but one year later the political/news blog has nearly doubled its audience to around 7 million monthly US unique visitors. The company has proven to be more than adept at balancing reporting the news with growing visitors and pageviews.
We estimate about $10 million in 2009 revenue and apply a 15-times multiple (higher than other blogs given growth and brand strength) to arrive at a $150 million valuation. (from Silicon Alley Insider)
Compare with TechCrunch valuation:
TechCrunch Revenue and Valuation
In 2006, The Wall Street Journal wrote that TechCrunch has revenue of $120,000 a month. And “TechCrunch had about a million global page views in September, compared with 13 million for CNET News, according to comScore Networks Inc.”
TechCrunch is now building a conference business and expanding its network of blogs. It probably fair to guess that it has grown to a revenue run rate of $5 million. To believe that the figure could double to $10 million in 2008 is not unreasonable. (24/7WallSt)
Two things: A 10x multiplier puts TechCrunch at $100m, and TechCrunch as expanded into a jobs classifieds board, merchandising store and so on. By the way, TechCrunch seems to have remained steady at $100m for a few years. I just picked the most articulate (but older) blog post showing TechCrunch revenue. 😛 Rumour has it that Michael Arrington who runs TechCrunch (still from his spare bedroom?) has turned down offers of $20m to $30m.
A while ago I put together an argument detailing the rise of Social Media Proprietors and I have more examples of social media monetization and a podcast on social media revenue called Social Media Business.