On Sunday night, well after the conclusion of Super Bowl XLV, and the emergence of the new NFL Champion, The Green Bay Packers, another event happened that, for moment, caught the attention of Twitter, becoming a top trend: "Huff Po."
That was because America Online just shocked the Internet world and purchased a blog site called The Huffington Post for a record $315 million, or to put it another way, almost a third of a billion.
Now, as I said in my video below, blog valuations will increase. No, the Huff Post sale to AOL in no way impacted the MyBlogValue.com estimate for Zennie62.com, but the simple fact is more and more blog owners have looked at their blogs as investment vehicles, and as online new traffic has increased and newspaper readership falls more and more, blogs are looked at as more than "legitimate" news sources. Now, they're solid revenue-generators.
Want more proof? You may know that AOL also purchased TechCrunch for $30 million, and already owned Engaget after buying it and Jason Calicanis' blog network for $25 million in 2005, but between 2005 and now, a wave of blogs have been purchased, or have been acquisition targets. If you're wondering what the common draw tends to be, it's one person. That is, the blogs and blog networks that have been sold were started by one or two people and came to be known by those personalties. Perez Hilton of PerezHilton.com, and Michael Arrington of TechCrunch.com are the two best examples.
In Perez' case, his blog has been valued at as great as $38 million last year. And while estimates of PerezHilton.com's actual worth vary wildly, there's no question that more often than not, the number falls between $20 million and $40 million. And that's for a blog that's more associated with one person, and not a staff of bloggers, like TechCrunch. Personality drives blog value.
AOL's Tim Armstrong was basically paying for Arianna Huffington as much as the gargantuan traffic levels The Huffington Post generates. For all of the writers and bloggers, and recent staff additions like Howard Fineman, the "Huff Po" has always been seen for what it is: a child of Arianna Huffington.
Take a look at the list of the 25 most valuable blogs in 2009, and the majority of them are known for the work of a single person, or at best, a few people: Gawker Properties, Huffington Post, The Drudge Report, Perez Hilton, PopSugar, TechCrunch, MacRumors, SeekingAlpha, GigaOm, Politico, SmashingMagazine, SearchEngineLand, Boing Boing , ReadWriteWeb, SB Nation, Destructoid, Mashable, Alley Insider sites, slashfilm, The Superficial Network, Neatorama, Daily Kos , Talking Points Memo, VentureBeat, and Wowowow.com.
Moreover, many of the blog on that list have been acquired since then.
What Does This All Mean?
What this all means is that a hyperlocal blog like The Bay Citizen is less likely to fit in that group of blogs "ready to be bought" because there are two problems: established local news sites, and math. A hyperlocal blog or website is a slave to its population size. And established news websites are hostitle to, and don't seek to partner with, sites like The Bay Citizen. The only way to grow is for such a blog to stop being "hyperlocal" and be more "local," having a mix of civic-interest, and World-interest content. That's what Zennie62.com's built to do.
The New York Observer is a great example here, as well - actually a better one. While it covers New York City, it really focuses on pop-culture and then asks "Who in New York is impacting World pop culture?" Thus, it's not surprising to see posts on Facebook CEO Mark Zuckerberg next to posts on The Hotel Chantelle, and then a post asking "What Did Wil.I.Am: tweet at the Super Bowl?"
(I've tried to explain that hyperlocal's a stupid idea, but my thought now is to let the hyperlocal blogs just pass on because their founders just don't listen and some established news websites don't listen either.)
This also means that more local blogger have to team up, but with so much vanity it's hard to actually cause such a dynamic to happen: everyone seems to want what the other person has already built. But I think this current wave of very public blog acquisitions will force bloggers as a whole to stop being immature, start thinking of their blogs are the business units they really are, and seek their potential value sooner rather than later.
Stay tuned.
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