free html hit counter Om Looks at the "Return of the Eyeballs" - John Battelle's Search Blog

Om Looks at the "Return of the Eyeballs"

By - November 28, 2005

According to Om, Boing Boing is worth $34 million. Who knew?


Full article here. From it:

Based on recent high-profile Web content deals, the value of a unique monthly website visitor currently hovers around $38 (the average purchase price per unique user of acquisitions during the past year). As a result, those who built popular websites over the last few years look prescient: They “bought” eyeballs when the market placed little value on them — making daily blog posts or encouraging others to upload text and photos — and can now sell their traffic at a markup.

While I don’t doubt the math – there are plenty of comps and Om has ’em all in the piece – I’m not convinced. Of course, I have a stake in all of this, what with FM and my involvement with Boing Boing. But we’ve been around awhile, and so far not many folks have come offering thirty million plus. Why? I’m guessing because buyers are smart enough to realize that Boing Boing and sites like it are unique voices with fierce attitudes about content and the author/audience relationship. It’d be pretty hard to buy that and simply shove a big dancing flash ad in there and make your investment back – you’d lose the very thing you bought it for – the audience. It’s harder, but ultimately more profitable, to run sites like this as smaller, profitable businesses for a while, at least until the marketing approaches emerge that are accepted and embraced by author, advertiser, and audience alike. That takes time and experimentation, not a rush to sale. But it sure is fun to dream….

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10 thoughts on “Om Looks at the "Return of the Eyeballs"

  1. Tom Olgin says:

    Naturally, different eyeballs have different value. Facebook’s collegic demographic is more lucractive than other in the comps.

  2. Hashim says:

    as long as the content and spirit at Boing Boing doesn’t change, then the users will accept the ads. Some will even be happy that the people who provide them with such great content will be getting compensated for it.

  3. Gopi says:

    Om got it all wrong this time – IMHO articles like this are just going to inflate the bubble!

  4. Jason says:

    Om is a really smart guy, but this is absurd.

    Weblogs, Inc. was bought by AOL because of revenue and revenue growth. Eyeballs and pageviews had nothing to do with it–zero.

    No one in the marketplace is buying things based on eyeballs–no one. It’s all based on revenue.

    Boingboing, like any other we property, is worth 1-10x revenue and 5-30x earnings. So, if BB does 30-50k a month/360-600k a year (which seems possible to me based on the 5m page views a month) it would be worth between 500k and $3M (based on revenue since with five mouths and server hosting to pay for it doesn’t really have earnings–yet!). Paying much more than that amount wouldn’t make much sense unless you were an affinity buyer or buying the talent (which is all part time and spoken for on other projects anyway). You would be much better off putting the $3M to work on hiring a staff of 10 writers @ $100k, putting 1M towards a management team, and $1M towards marketing. That’s how these deals tend to go down.. people look at the cost of buying vs. building and the numbers Om puts out are so absurd it’s laughable.

  5. John Furrier says:

    You make a good point but don’t confuse paradigms… uniques mean different things in today’s alwayson always migrating user base.

    Jason: you sold Weblogs Inc because deep down you knew that the model didn’t scale. Period. It had nothing to do with revenues was momentum. You did the right thing by selling. Just admit it.

  6. Let’s say someone would buy Boing Boing and pay someone a lil’ bit to continue blogging there. I wonder how long the blog could survive when a “mediocre” but dedicated blogger would take over the site. It has some things going for it:

    – it is incredibly well-known and well-visited, so *if* the new blogger could satisfy the audience, many would stay
    – its high PageRank could be monetized until it drops
    – many many people send in cool links to Boing Boing, at least I *assume* so — in that way, it might have reached a Perpetuum Mobile state in the sense its current popularity would guarantee its continued popularity.

    I’m playing devil’s advocate here. I guess it’s more likely the site would start to rot within a month after Cory et al leave, lose all its advertisers immediately, see all fans move over to Cory’s new blog, and die within a year… after all, a blog represents a person up to a point so you’d have to buy Cory et al, not 🙂

  7. Jason says:

    >> I guess it’s more likely the site
    >> would start to rot within a month
    >> after Cory et al leave,

    Actually, because Boingboing is a group blog no one members leaving would have a huge impact on it. in fact, we’ve seen that adding new bloggers to a blog in fact can make it grow.

    You are correct that any one of the members could also leave and take audience with them.

    Now, if three or four members were to leave and were not replaced with decent folks you would have a major problem, but you can easily mitigate against that risk in a deal.

    Bottom line: boingboing is a strong brand and could remain indie, or become part of something bigger, and do very well in the future.

    In fact, it might make a great print magazine. 😉

  8. Ian Bell says:

    I think it’s easy for people to slap a typical revenue multiplier on a business to find what its worth, but a lot of the times, it just doesn’t work that way. An online site/business must appeal to a particular buyer.

    $580 million for MySpace doesn’t make much sense to be, but it obviously does to the buyer, Fox. And $25 million for the largest blog network seems pretty low and just confirms the value of blogs in my mind. Original content will always be king.

    I know Jason swears they were bought for their revenue and not their traffic, but when half of your revenue is from Google and ad networks, that don’t really give the buyer confidence that they will be able to sell ads directly on their new purchase. Plus it was VERY risky for AOL to buy a blog network, I don’t even want to get into the legal ramifications here, but AOL is going to have to be very careful about how these bloggers behave and post content (be careful with those insider secrets). Its puts a large target on them now.

    I thought Om’s article was fun. It reminds me of those crazy facts that sports announcers throw out during the football game. Sure it’s easy to take a ton of statistics and bring them down to the lowest common denominator, a unique visitor, but people are taking this article way too seriously.

    Sometimes there is no rhyme or reason as to why a business is purchased. A company could be trying to show shareholders they are working hard, trying to increase revenue through an acquisition in an effort to increase their stock price, dumping money at the end of the quarter to prevent being taxed on it. There are a hundred reasons and it’s not worth wasting time trying to understand it.

  9. PJ Brunet says:

    Before buying it you would need to review the server logs–to see if the traffic is legit.

    What you look at is the typeins/bookmark traffic (ie: no referrer).

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