back in the old days?
Filed in archive Venture Capital on March 19, 2005
Reading this article I wonder if the learning curve after the bubble was so flat:
"Domain Name Development
17M monthly uniques
x
$9.64 per head
= $164M
17M monthly uniques
x
$9.64 per head
= $164M
Gawker Media
28.5M monthly uniques
x
$9.64 per head
= $274M
Data source: Gawker Media, although they don't provide data for their popular Fleshbot site.
About.com
21M monthly uniques
x
$19 per head
= $400M (Acquired by New York Times)
Marketwatch
7M monthly unique visitors
x
$74 per head
= $519M (acquired by Dow Jones)
Slate
5M monthly unique visitors
x
$2 per head
= $10M (acquired by Washington Post)"
Such valuations are surely interesting being a major investor into a blogging network like Creative Weblogging but they are non-sense. In normal (not irrational like 1999) investors are focused on two things revenue and profits. Even a site network with 30 million unique visitors is worth nothing as it can be hard to monetize a visitor if you are in the wrong industry.
Just take a look at very successful site in terms of traffic like defamer.com or Gawker.com itself. Though to find sponsors there or even sell that to any new advertiser - traffic means nothing as long as it does not enable advertisers to find exactly their target group.
So paying a multiple of 10 for yearly revenues (as NYT did) is an admirable investment but making valuations on unique visitors is just silly.
Thanks Mario for the hint.
Tags: online publishing days back entrepreneurship back+days venture+capital unique+visitors
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