Update 2:Rafat has a comment to this post pointing out that by just looking at paidcontent.org I am doing the valuation of ContentNext a disservice. Of course he is quite right. ContentNext has other sites and also events. It is also true to say – although Rafat doesn’t – that valuation has many variables, including the quality of the people etc. Rafat is very good at what he does and he has a great team. So … fair point Rafat.
In my own defense, this post is not intended to be a scientific analysis of valuation. I did a “back of the envelope” comparison. I didn’t take into account any of the other sites that GigaOm has, or TechCrunch, or ReadWriteWeb. I also didn’t take into account TechCrunch events. All I was saying is, there are probably (by relative comparison of the web sites) some pretty valuable businesses out there right now. Hope you agree with that Rafat.
The news that Rafat Ali’s ContentNext, owner of PaidContent.org, has been acquired by the UK’s Guardian Media Group got me to thinking. What does this mean for the valuations of other Tech blogs?
I did a quick back of the envelope calculation based on the numbers published and the Compete.com stats for June 2008.
By this math PaidContent.org got something like $139 per unique reader or $56 per visit as an acquisition price. Of course the Compete stats will not be wholly accurate (although Quantcast has Paidcontent.org at only 40,000 unique visitors, so Compete could be high)
Using Compete.com for 4 other significant technology Blog services we get some interesting numbers. TechCrunch should be valued at between $200 and $450m; GigaOm at between $46 and $55m; ReadWriteWeb at between $63 and $65m and Venturebeat between $50 and $53m. I’d say a merger between these 4 would bring them collectively up to about $350-500m even without the synergies and growth prospects of being one. I also looked at the search analytics data from Compete.com. 4,563 keywords for TechCrunch, 585 for GigaOm, 913 for ReadWriteWeb, 581 for Venturebeat and 363 for PaidContent.org Interesting indeed.
I am adding some graphics from Compete.com (all from this URL).
Disclosure: I am a shareholder in TechCrunch – along with Mike Arrington.
I have to own up to the fact that it was my suggestion that the guys go and wake Mike up (they had missed seeing him the previous evening). The latte and croissant was my idea too. But I was not foolish enough to accompany them. Waking Mike up before his body naturally rises is not my idea of a good thing to do.
It seems like a long time ago that Jason Calcannis and Mike Arrington announced their intention to host a conference for startups in the fall. It was at the DEMO conference at the start of the year. Well ….. TechCrunch20 is now real and today the web site went live with more details of the event.
“The format is simple: Twenty of the hottest new startups from around the world will announce and demo their products over a two day period at TechCrunch20. And they donâ€™t pay a cent to do this. They will be selected to participate based on merit alone.”
The venue is the prestigious Palace Hotel on New Montgomery Street in San Francisco.
Although free to companies the event is not free for attendees. 2-day ticket prices, based on availability, are $1,995 through July 15, 2007 and $2,495 through September 10, 2007. There will be a limit on the numbers attending so get yours now.
Another deal I have had to keep under wraps….. Techcrunch and F***edCompany are set to release news of a merger tonight at around 9pm Pacific Time. Mike has blogged it early due to rumors circulating on the web. Techmeme has it here.
Om Malik has the scoop but this is something I have been keeping under my hat for several weeks. Heather Harde, former Fox Interactive Media executive, responsible for Mergers and Acquisitions, is to be the new CEO of TechCrunch.
Heather was a key figure in Fox’s strategy to acquire the key assets needed to turn itself into a major Internet presence. She is accomplished, charming and as sharp as a razor. It’s a major coup for Mike and TechCrunch to recruit her. I believe it augurs well for TechCrunch that Mike has decided that the continued growth of his amazing venture requires the services of a hands on senior operational executive.
Until now I was the only other shareholder in TechCrunch besides Mike (a fact that dates back to our 2005 collaboration in Archimedes Ventures and edgeio). I can’t say how thrilled I am to welcome Heather into the company. I got to know her in my role at edgeio and have found her to be a straightforward, highly observant, passionate and focused person. I don’t know anybody with a bad word to say about her. The potential of TechCrunch is being realised every day. RSS subscribers, unique visitors, advertising revenues, job listings (edgeio hosts CrunchBoard) and every other measure shows this. But the potential is far greater still. Heather and Mike will be the team to realize the vision and take it to a new level. Congratulations to both.
Fred Wilson has an awesome post covering what is novel and new about web 2.0. Posting, subscribing and tagging are all discussed. Fred’s views mirror entirely what Mike and myself are discussing at Archimedes Ventures, and a little in public at TechCrunch. We have also experimented a little at EarningsCast. Try a search for the tag “earningscast” at Technorati – here . We have a major project close to beta that embeds this philosophy deep within it’s genes. Fred, we love ya man!