You've got Weblogs!

October 6, 2005 4:53 AM

AOL is buying Weblogs, Inc! Reuters and Paidcontent.org say it's for at least $25 million.
posted by braun_richard (27 comments total)

Crazy. It makes no sense when they only have about $2mil in annual revenue, and that's only from paying 200+ people a pittance to create content.
posted by mathowie at 5:10 AM on October 6, 2005

perhaps we are seeing another dot bomb forming...
posted by stilgar at 5:15 AM on October 6, 2005

Does this mean they'll be paying more than $4 a post?
posted by Remy at 5:18 AM on October 6, 2005

Those two belong together -- and I loathe 'em both. I was a little sketchy about Yahoo buying Flickr and now Upcoming, but I'm starting to think Yahoo gets it, that whoever is behind these acquisitions it's been making gets whatever 'it' a lot better than even Google does.

But I hate Weblogs Inc with a passion for helping to drive the monetarization and concomitant beshittification of weblogging, and TimeWarnerLOL can suck my balls. May they circle the digital bowl together before following pets.com forever down the pipes.
posted by stavrosthewonderchicken at 5:22 AM on October 6, 2005

They're not buying revenue Matt, AOL seems to be buying "content." Sort of like Ted Turner buying the Atlanta Braves to fill CNN's broadcast schedule. You of all people should know that weblogs are the new Desperate Housewives - and way better since on the web the actors and writers pay YOU.
posted by three blind mice at 5:22 AM on October 6, 2005

I like engadget and autoblog.

Although I really like musicthing and Arts and Letters daily.
posted by The Jesse Helms at 5:42 AM on October 6, 2005

Well, $2M in Revenue and a price of $25M, gives them a Revenue per Share ratio of 12.5 and Time Warner has 9.2. Considering that Weblogs should grow a lot faster than TWX, I don't see this as a high price, quite the opposite. Maybe I am missing something...
posted by costas at 5:57 AM on October 6, 2005

Er, doh, I should have said P/E of 12.5... never mind.
posted by costas at 6:00 AM on October 6, 2005

Watch the market for new Weblog Network "Empires" suddenly go glut. It's already started.
posted by brownpau at 6:32 AM on October 6, 2005

Fascinating and yet disturbing at the same time. It definitely seems like a new bubble is forming. Should prove interesting in the next year or so...
posted by shoepal at 6:39 AM on October 6, 2005

stavros and three blind mice have it. AOL/TimeWarner have always seen themselves more as a content than technology company. As I mentioned to a friend the other day, I have no idea what AOL is selling these days. Their main products in the online service days were content and the means to access it. Once they were opened up to the internet at large, they suddenly had to contend with the content freely provided by a multitude of others, then broadband took away their technology offering.

AOL should just think of better ways to do what's left: shill for TimeWarner media properties.
posted by mikeh at 6:44 AM on October 6, 2005

Oooh, Denton's gotta be annoyed at that one?
posted by mandeville at 6:52 AM on October 6, 2005

Denton isn't that annoyed.
posted by chunking express at 7:31 AM on October 6, 2005

I'm sure AOL won't fuck it up, just like they didn't fuck up Netscape.
posted by SweetJesus at 7:43 AM on October 6, 2005

The only Weblogs Inc. site I read daily or at all is Engadget. Gizmodo was great under Peter Rojas, Lev carried the torch well but Peter is well *the* gadget guy.
posted by riffola at 7:55 AM on October 6, 2005

I note that this thread reveals some of the handwringing that inevitably occurs when publicly traded companies come up. Be it Google or Yahoo! or Microsoft or Apple or anybody with a ticker symbol; publicly traded companies are not your friends. Their purpose is making money. Period. If they please you, great, but if you aren't their core market you might well get boned. Google does not love you, gmail is not a gift from God. Yahoo! might "get it" in that they can make money but Flickr isn't your friend either, it might be a useful tool or a fun community but it will last for you until the winds of revenue shift away from whatever bit you like. Microsoft is no more evil than Apple. Jeez, people, these are businesses and you are their victims...er...customers.
posted by shagoth at 8:26 AM on October 6, 2005

Just out of curiousity, does Denton pay better? Why do the cool kids like and write for Denton and not Weblogs Inc? I assume it's some A-List Cabal / circlejerk.
posted by keswick at 8:40 AM on October 6, 2005

What costas said -- this is a reasonable valuation. Business values aren't based on current earnings, they're based on future earnings potential. This page shows average price/earnings ratios by industry. Note especially the averages for Internet Information Providers (52.2) and Publishing - Newspapers (17.5).

There's been a flurry of blog-related purchases lately (Flickr, Upcoming) so it's not that surprising to hear that a blog company that actually makes money is getting snapped up.
posted by me3dia at 8:42 AM on October 6, 2005

who does the best sports blogs?
posted by specialk420 at 8:56 AM on October 6, 2005

Gizmodo is way better written than Engadget. Peter Rojas is a douchebag.
posted by cillit bang at 9:26 AM on October 6, 2005

Maybe, but Weblogs Inc. sites have comments. Oh wait, the cool kids don't like comments anymore.
posted by keswick at 9:32 AM on October 6, 2005

Well, $2M in Revenue and a price of $25M, gives them a Revenue per Share ratio of 12.5 and Time Warner has 9.2.
...
Er, doh, I should have said P/E of 12.5... never mind.

Revenue isn't earnings. Revenue is (approximately) sales, while earnings is revenue less expenses. It's a price to sales of 12.5 - they are paying $12.50 for every $1 of top-line revenue, not bottom-line earnings (TWX has a P/S of 2.0, the S&P 500 as a whole has a P/S of 1.5 but I'd imagine they they probably trotted out comps for this like GOOG at 17, YHOO at 10ish, and EBAY at 14).
posted by milkrate at 10:01 AM on October 6, 2005

Maybe, but Weblogs Inc. sites have comments. Oh wait, the cool kids don't like comments anymore.

Actually, the GawkerMedia sites have begun adding comments recently. I don't think it's universal yet, but it's happening, for some reason. Really, the quality of comments a lot of these high-traffic blogs get makes it virtually useless in most cases.
posted by kyleg at 12:06 PM on October 6, 2005

Do any large companies actually create anything anymore? Or do they just buy up smaller ones because they don't have people who can come up with good ideas?
posted by Todd Lokken at 12:08 PM on October 6, 2005

Much easier to let someone else take the risk and just buy it once it's proven.
posted by me3dia at 12:28 PM on October 6, 2005

Todd: Are you talking about AOL buying Weblogs or Denton pimping "blogs?" Just so we're clear.
posted by keswick at 2:45 PM on October 6, 2005

Great post analysing value per blog in the network. (via waxy)
posted by shoepal at 11:43 AM on October 7, 2005