<![CDATA[PaidContent.org points to the kind pass-the-crackpipe valuation discussion that has led to previous bubbles:
Lots of chatter prompted by a softball AP story, Russell Beattie’s musings and a prediction that Yahoo will buy the company that Six Apart will be the next big acquisition or IPO at a value based on the About-NYT deal. Here’s the thinking: About.com sold for $410 million or, as Rex Hammock figured out, roughly $820,000 a blog.
Folks are guessing the purchase price over at Russell’s blog, which is something I can imagine happening if Yahoo decides it wants the TypePad blogs as a source of ad inventory for its Overture business. But a price would not be based on the value of a each of the blogs, nor even the total inventory, but on the cost of scaling the business and supporting the increasingly rich content that will change “blogspace” over the next few years into personal mediaspace. The cost of hosting personal mediaspace needs to be factored into a buy decision. As I wrote the other day, I think the Times paid too much for About.com, so that deal certainly shouldn’t be an example of rational pricing.
But seeing a rush to buy into blogging is missing the point and only encourages investments in the wrong places because of enthusiasms about a genre of writing; without the RSS revenue question answered, it’s pouring money down a black hole, because so much traffic generated by blogs exists in a dimension beyond revenue.]]>
2 replies on “Seeing value where it ain't”
Good points … I was more focused on trying to stress you can’t compare ownership to hosting.
I think you made that point well. It is just one of the many reasons that those speculations about About-as-comparable valuation is misaimed…. Fun, maybe, but not a meaningful comparison without a much more complete analysis than the AP made.