What's A Web Magazine Really Worth?

January 5, 2009 2:44 PM

What if The Huffington Post isn't worth $200 million, but say $2 million?There's a lot to love in this article, including key Nick Denton quotes on the Huffington Post's valuation.
posted by Stephen Elliott (41 comments total)

NickyDen and HuffPo in Foofaraw!
posted by Damn That Television at 2:53 PM on January 5

Thank god this is getting talked about. HuffPo's one of the worst things about the 'net right now; its business model has always been absurd. The *way* in which it repurposes other folks' content is consistently sleazy and insulting.

Why on earth anyone bothers with that site is beyond me.
posted by mediareport at 2:56 PM on January 5 [2 favorites]

Why on earth anyone bothers with that site is beyond me.

because every once in a while you get the distinct impression that George Clooney blogs for it, but you're not totally sure, so you keep coming back hoping to see him post something else.
posted by shmegegge at 3:02 PM on January 5 [3 favorites]

Web-based media business given questionable valuation; film at 11 - 11 MILLION PM!
posted by GuyZero at 3:05 PM on January 5 [6 favorites]

I read HuffPo daily (among dozens of other sites). Why shouldn't I? I'm not being argumentative, I'd like to know what makes it worse than other news sites.
posted by ColdChef at 3:07 PM on January 5

Whoa I haven't been to Huffington Post since the elections, I guess I see why. A good 1/3 of the screen is made up of this horrific AT&T Bold ad, and I see AT&T ads within the content themselves. Between this and the wholesale stealing of content, is this what a blog looks like going under? Or more to the point is this what a blog looks like when a bunch of VCs invest $25million and suddenly realize that the revenue generated is never going to recoup that in any kind of VC timeframe and thus want to plunder it as fast as possible?

I feel sorry most for the junior level employees who were probably enticed to slave wages, terrible hours, no benefits and the idea that if they stick it out until their MBA/grad school stint they'll have a New Yorker like credentials on their resume, oh and they're working for the Internet! Which means fun!
posted by geoff. at 3:15 PM on January 5 [2 favorites]

That Ad Age piece really is great, if folks haven't read it, with great stuff about Digg's "frightful" finances, too. I loved this bit:

The media are slowly beginning to realize that just because some VC shelled out $1 million for a 1% stake of a start-up, that doesn't mean that the start-up is worth $100 million. Suddenly we're remembering what we realized back when the Web 1.0 bubble burst: A lot of VCs are idiots who are simply flushing money down the drain.

Thanks, Stephen Elliott, for bringing that here.

ColdChef: I'd like to know what makes it worse than other news sites.

RTFAs, hon. Seriously, ColdChef, the vampiric hustling of other folks' content while whoring out for venture capital and painting yourself as the future of the journalism business is pretty damn close to despicable.
posted by mediareport at 3:20 PM on January 5 [1 favorite]

So traffic aside, why give HuffPo a higher valuation? Two reasons:

1. Because master self-promoter Arianna Huffington inspired a "Simpsons" character last year; that's gotta be worth something. (If Salon Editor in Chief Joan Walsh were to inspire, say, a "Family Guy" character, then I'd insist Salon would be worth at least double its current $700K.)

/me chuckles.
posted by furtive at 3:27 PM on January 5

A lot of VCs are idiots who are simply flushing money down the drain.

For those who do not follow the world of high-tech venture capital, let me repeat this and state that it is true. If VCs were baseball players they would be Jose Canseco, swinging wildly at everything in the hopes of a home run but mostly striking out. I would speculate that at least one VC gave Huffington money just to get her to stop calling.

$1 million for a 1% stake of a start-up

If a start-up has something worthwhile, the VC will want a lot more than 1% and has the money to pay for it. A $1M investment is the equivalent of buying an airplane-sized bottle of liquor to see if you like it.

The real question is what her cash flow is which I'm sure is very confidential information.
posted by GuyZero at 3:27 PM on January 5

Seriously, ColdChef, the vampiric hustling of other folks' content while whoring out for venture capital and painting yourself as the future of the journalism business is pretty damn close to despicable.

I read the article and I understand the concerns. Fair enough, but perhaps my question should have been "Why should this bother me if I don't work for venture capital groups or the media?" I mean...I'm savvy enough to tell the articles from the ads and I usually see a story there that I wouldn't have seen somewhere else. So, why should I as a casual reader give a shit how they pay their bills? (Or don't pay their bills.) Again, I'm not trying to start a fight...I'm just wondering if maybe all the hate is a tad bit of sour grapes that someone is gaming the system.
posted by ColdChef at 3:37 PM on January 5 [3 favorites]

Does this mean we can look forward to Balthus: Painter and Pervert?
posted by Joe Beese at 3:50 PM on January 5

why should I as a casual reader give a shit how they pay their bills?

Well, support the sites you like, sure. Me, I like sites that don't insult my intelligence with obnoxious clutter and sleazy, misleading click-through strategies. Believe me, I love and need good aggregators as much as the next internet news junkie (it's why I miss Cursor.org so much), but the "click here for more! but oops it's not really more just another few sentences we grabbed from someone else in our business who actually pays their employees sorry!" is truly pathetic, and drives me away as fast as anything I see online. If it doesn't bother you, fine. Enjoy.
posted by mediareport at 3:51 PM on January 5 [2 favorites]

Me, I like sites that don't insult my intelligence with obnoxious clutter and sleazy, misleading click-through strategies.

Ah, I see. Fair enough. That makes perfect sense. Thank you.
posted by ColdChef at 3:53 PM on January 5

Dude, if I had $200 million? I'd totally give it all to Huffpo if they guaranteed Arianna Huffington would never show her face or speak in public again. Then it would be worth $200 mil.

Somewhat regular reader/I've met her/I'm personally involved in something featured there just about daily
posted by nevercalm at 3:53 PM on January 5

Can we stop saying "HuffPo," please? It makes me picture a Teletubbie with asthma.
posted by jonmc at 4:10 PM on January 5 [15 favorites]

HuffingtonPost: The Smartest Guys on the Web.
posted by fire&wings at 4:11 PM on January 5

Does this mean we can look forward to Balthus: Painter and Pervert?

I'm eagerly awaiting Bernard Levin: Not too cool for tutus
posted by PeterMcDermott at 4:12 PM on January 5 [1 favorite]

But if Huffpo flounders who will counter all that hard hitting content at Pajamas Media?
posted by Max Power at 4:18 PM on January 5 [5 favorites]

How I miss the days of the MeFi front page basically being the Huffington Post RSS feed. Oh wait, something other than miss...
posted by Artw at 4:28 PM on January 5

a Teletubbie with asthma.

Ow, ow, ow, the bleu cheese dressing through my nose: it burns!
posted by scody at 4:46 PM on January 5

Give me my Metafilter over the Post any day...
posted by Alexandra Kitty at 4:51 PM on January 5

I would also like to add that I too enjoy the website Metafilter.com.
posted by parallax7d at 5:04 PM on January 5 [3 favorites]

Speaking as someone who went there many times a day during the election and just recently checked back in, holy shit, those Blackberry Bold ads are obscene! I can't handle it. It's like letterboxing from hell!
posted by saul wright at 5:24 PM on January 5

What does that make MeFi worth, 750 billion?
posted by fixedgear at 5:34 PM on January 5

There are hell of a lot better news sources out there, most notably, Talking Points Memo.
posted by delmoi at 5:34 PM on January 5

WEBSITES THAT SIMPLY REPURPOSE OTHER'S CONTENT AREN'T WORTH MUCH... DEVELOPING...
posted by ALongDecember at 5:53 PM on January 5 [2 favorites]

So let' see:

1. controversy ..check
2. big money numbers ..check
3. celebrity ..check
4. sex allure .. milf qualifies, check
5. exploitation ..check

Missing among others are moralizing, , it's everybody else fault, promise of a better tomorrow with a worse today, top10 list and schadenfreude.

That surely upped Arianna celeb a bit.
posted by elpapacito at 6:36 PM on January 5

For true valuation, Arianna should offer HuffPo on eBay.
posted by terranova at 7:48 PM on January 5

Arianna Huffington is a very very annoying person. Admittedly, there are an awful lot of annoying people out there. Most of them are, when you come right down to it. But most annoying people don't get The goddamned Daily Show et al fawning all over them and goddamned Metafilter linking to them for unknown goddamned reasons, and as a consequence, aren't pushed in my face all the goddamned time.

Screw the Huffington Post. I'm waiting for a time when the world is Post-Huffington.
posted by stavrosthewonderchicken at 8:14 PM on January 5

Just to be clear on this: it was the Chicago Reader's Whet Moser who broke this story in a big way, not Gawker. Stealing other people's content is the HuffPo's business model (and Gawker, at least, attributes). But despite all this, the HuffPo continues to be granted a strange credibility by the New York scene: witness not one, but two events at the 92nd Street Y. When you combine this with the HuffPo's failure to pay bloggers, this is the intellectual equivalent of slave labor. Employ people for nothing, steal the content (or resources) of others without paying, and then prop up your editorial staff as seers who can see the future. Because, after all, Arianna's highest responsibility is "to the truth." But where's the promised money for investigative reporting?

What nobody told Arianna is that the truth, properly deployed, can not only hurt, but take this amateurish operation down.

If someone can investigate whether or not the Huffington Post actually pays for its AP stories, and (if the HuffPo ain't paying) alert the AP's rather sensitive staff about whether HuffPo lives up to its guidelines, you could see a consummate implosion.
posted by ed at 10:12 PM on January 5 [1 favorite]

What does that make MeFi worth, 750 billion?

Well, if you put stock into Quantcast's estimates of monthly traffic (as the article seems to) and you base valuation entirely on traffic then Metafilter ought to be worth a little less than half of Huffington Post.

And why not put stock into Quantcast? After all, they predict that Metafilter's audience also likes discussion/chat... and that seems right on the money. Not sure about "Audience also searches for fall festival games" though.
posted by twoleftfeet at 1:13 AM on January 6

But you can't put a price on love.
posted by twoleftfeet at 1:19 AM on January 6

What does that make MeFi worth, 750 billion?

Click-through those Suicide Girls ads and you might just save the global economy.
posted by Blazecock Pileon at 1:20 AM on January 6

I read the Post during the election cycle, usually as a vein-slapping politics junkie looking for just one more hit. Now that the election cycle is over, I can't think of a reason to visit the site.

There are some sites I read because I like to stay informed about certain topics, but really hate the site itself. Most Gawker sites, especially since they jettisoned The Consumerist, for example. I might have stuck with io9, but there's just something about that site that gives me the screaming heebie snarks.
posted by robocop is bleeding at 4:42 AM on January 6

I'm sure the HuffPo pays for its AP stories.
posted by Stephen Elliott at 7:04 AM on January 6

I might have stuck with io9, but there's just something about that site that gives me the screaming heebie snarks.

Oh god yes. Occassionaly it throws up the odd good thing, but the relentless obsession with TV and "spoilers" is a little wearing, as is the emphasis on lists - nothing wrong with listy articles per-se, but you feel a little cheated of your time when they're thrown together cracked.com style as filler, and most of them consist of [x] number of Sci-Fi [somethings], with greater than two thirds of x is either not sci-fi or not [something] by anything but the most lax definitions.

Tor.com is better.
posted by Artw at 8:31 AM on January 6 [1 favorite]

Also the Sc-Fi channel just span off it's blog as Sci fi Wire, which somehow manages to be less breathless and unfocused than io9 despite being from the Sci Fi channel.
posted by Artw at 8:34 AM on January 6

And as it has always been, annual revenue * 5 = value. In this case, "from January through August of last year... 'the site collected just $302,000 in ad revenue, according to an estimate from TNS Media Intelligence.'" So $302,000 / 8 months = $37,750 / mo * 12 = $453,000 / year * 5 = $2,265,000.

I'd discount that by a quarter million for tough times and a very questionable business model, and say $2 million is about right.
posted by rusty at 9:58 AM on January 6

I'd discount that by a quarter million for tough times and a very questionable business model, and say $2 million is about right.

From a guy who knows a thing or two about monetizing a site that doesn't pay it's writers...
posted by garlic at 11:35 AM on January 6

And as it has always been, annual revenue * 5 = value

The proper revenue multiplier is hardly a constant "5". 5 isn't a bad estimate, but companies sell/have market caps for anywhere between .1 and 100 times revenue.
posted by GuyZero at 5:04 PM on January 6

garlic: From a guy who knows a thing or two about monetizing a site that doesn't not pay[ing] it's writers...

FTFY. Unfortunately I never got around to the "monetizing" part all that much. But hey, informed insiders say K5 could be worth $200 million! Someone call Nick Denton and let him know so he can piss on it. :-)

Also, GuyZero: Yeah "companies" in general could be anything. It would depend on the industry. I think for web media companies in particular, 5 is a pretty good bet. I have absolutely fuck-all theory to back this up, other than just that it has come up with a number that I think is pretty reasonable every time I've used it. Presumably it has something to do with the faddish track record of web media properties, that five years is about (or a little shorter than) the growth period of any given site. But it's truly a very rough rule of thumb, one half-shuffle step away from "wild-ass guess."

That said, seriously, $2 million for HuffPo would be fair to generous. Justify it however you will.
posted by rusty at 6:02 PM on January 6