Sam Gustin slaps
down Henry Blodget today after Blodget suggested
that TechCrunch might be worth $100 million. That’s ridiculous, says Gustin:
"I know CNET, and TechCrunch is no CNET."
The whole conversation was sparked by Doug
McIntyre at 24/7 Wall St. The math is relatively simple: CNet is valued
at $1.2 billion; maybe TechCrunch is worth a twelfth of that?
Certainly, by blog standards, TechCrunch’s traffic
numbers are impressive: at least 1.5 million unique visitors per month,
over 4 million pageviews per month, along with some 575,000 RSS and email subscribers.
More to the point, if you want to reach the most influential individuals in
the technology community, those subscribers and uniques are exactly
the people you’re looking for.
TechCrunch seems to be doing pretty well in terms of selling ad inventory,
but I’m sure it could do much better with a large and dedicated corporate ad-sales
team dedicated to it. Meanwhile, CNet seems to be going absolutely
nowhere, and needs a shot in the arm.
But CNet’s numbers – it measures monthly pageviews in the billions,
not millions – dwarf TechCrunch’s. There’s a good chance that a CNetted
TechCrunch would go the way of a Googled Dodgeball: lost and forgotten as part
of a much larger company. Frankly, I doubt that CNet has the structure or ability
to get anything like $100 million of strategic value out of TechCrunch. And
in any case, CNet is a consumer site: there aren’t actually all that many synergies
with TechCrunch in the first place, either on the reader side or on the advertiser
TechCrunch is a bit like Italian Vogue: hugely important and influential,
but not necessarily the kind of property where you want to see much more growth.
TechCrunch already reaches nearly everybody who matters, and the marginal extra
unique visitor is not going to be particularly valuable to advertisers, compared
with the readers who have been reading TechCrunch for ages.
But let’s generously say that TechCrunch can achieve 100 million pageviews
per year, from important and influential readers. And let’s say that on each
of those pages CNet would be able to sell on average four ad units at a $7 CPM.
That would mean revenue of just under $3 million a year. By the time you’ve
paid the writers and the salespeople and all the other expenses associated with
the site, there’s no way you can get a revenue stream which remotely justifies
a $100 million valuation.
So I’m with Sam on this one. Blogs can be very valuable, and a blog network
like Gawker Media, which got
162 million pageviews in August, would be worth a very large amount of money
if there were anybody rich and foolhardy enough to want to buy it. But the idea
that a single blog, even one of TechCrunch’s standing, might be worth $100 million?
That’s pushing it.
Update: Doug McIntyre defends
the $100 million valuation, saying that "Most analysis of the value
of TechCrunch is based on what a financial model says it is worth. But, that
is not an accurate way to make the evaluation. The real question is what someone
would pay." Basically, he’s saying that TechCrunch is a strategic
asset, rather than a financial asset. But my point is that, really, it isn’t,
or at least that it isn’t qua blog. It might however have much more
value as a conference company than as a blog.