There is always a great deal of excitement among bloggers when the latest announcement of a blog sale is made. With some of the high prices paid by Old Media for popular blogs or blog networks lately, it inspires all bloggers to figure out how to increase their own value.
But how do you try and gauge what the value of your blog is? Jeremy Wright of b5Media did some research on this and, with the help of his team, came up with a model that takes into account traffic / readership size and growth, advertising type / rates, and costs. The model then computes a range of valuations based upon different multiples of net income. (You can download the model – an Excel workbook – at his site.)
Dane Carlson at Business Opportunities Weblog also has a blog valuation calculatorwhich is based on the same link to dollar ratio as the AOL-Weblogs Inc deal. (When you plug in the URL of your blog and click Submit, it generates a value and gives you some code to paste into your blog in case you want to share the valuation with your readership.) Lorelle VanFossen of the Blog Herald provides an intersting discussion of valuing and selling a blog.
Blog valuation is still new, and more art than science. But for book publishers that move to a blog network model and writers who want to use the blog to book approach, it will be very important. The back list is one of the key component for valuing traditional book publishers. A good back list provides a dependable source of revenue of the publisher. A publisher using the blog network model can create two sources of value. The titles that emerge from the network and ultimately go on the back list. And the network itself which generates ad revenues from the always desirable targeted “eyeballs.”
Writers who create a blog with the intent of producing a book can realize the same kind of dual value. Value from the book (or books) that result fromt he blog. And value of the revenue generating potential from the audience that visits the blog.
Of course, no calculator can tell you with certainty the valuation you’ll actually get. That’s the result of mysterious and unpredictable interaction that occur between buyer, seller and the deal environment. Happy calculating!!