How much is your blog worth? In acquiring Weblogs Inc., AOL has provided some concrete metrics to future valuation of blogs. How much will traditional media be willing to pay for a blog? Conversely, how much would you sell your blog for?
AOL-Weblogs Inc. Deal – Benchmark for Future Blog Valuation
Weblogs Inc was established by Jason Calacanis and Brian Alvey in 2003. It is a network of blogs which includes under its wings successful blogs such as Engadget and Autoblog. Jason Calacanis pointed out that Weblogs Inc. earns in excess of $1 million yearly in Google Adsense revenues alone.
AOL purchased Weblogs Inc. for a confidential sum assessed at somewhere between $25 - $40 million. After said purchase, Tristan Louis came up with a blog valuation scheme based on the deal. He created a chart of blog value using the value of each inbound link to Weblogs Inc. as the basis. It is common knowledge that blog readers follow links. Search engines also act as users and primarily determine blog quality rankings based on linkage data thus direct and indirect value links are a great proxy for value measurement. In the blogosphere, conversations that nurture connectivity represented by links and indexes like Technorati give a vantage view of the value of a blog.
Tristan Louis itemized the publicly available data (list of blogs indexed) at Weblogs Inc. network including the number of inbound links (Technorati blog numbers) per blog divided by the purchase price to determine the value of an inbound link to a blog. At the rumored price of $25 million, the estimated value is $ 564 per link. At $30 million, it is $677.57 per link and $903.42 at an acquisition price of $40 million. Interestingly, the consumer segment chalks up the biggest percentage of linkage. Engadget represents over a third of the overall network traffic.
Applying Tristan Louis’s Weblogs Inc, sale, Dave Winer has also sold http://Weblogs.com to Verisign for a rumored price of around $2 million. Blog entrepreneur Nick Denton, founder of Gawker Media has signed a deal with VNU Media to publish Gizmodo (gadget blog) across Europe in six languages. VNU Media is a leading worldwide information and media company which owns ACNielsen, Billboard, The Hollywood Reporter, among others. With this deal, blog publishing has hit big time.
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