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

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.