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Blog Sale Gets Plug
By Max | May 28, 2007
Yesterday I wrote about a blog sale listing that I had run across. What do you know, John Chow wrote about the same sale. In yesterday’s post I was just trying to show that one has to really think about how much time will go into running a website and adjust the price they are willing to pay accordingly. Since the seller is a friend of John Chow’s, I thought it would be interesting to dig a little deeper with my analysis of the sale.
The first thing I noticed is that NetBusinessBlog seems to have a very good relationship with John Chow’s site. He has been plugged several times. Back in January, after he first started his site, he ordered a ReviewMe review from John. There’s no doubt some expense was incurred in getting the traffic built up early on. From this two questions must follow…
1. Once the new owner takes over the NetBusinessBlog, will the plugs from John Chow continue or does Matt Coddington have a personal relationship with John that drives the interest?
2. How much was spent on advertising to generate the interest in this blog? How much will traffic decline once the advertising stops?
Answering the first is difficult. From John’s blogroll, we can see that Matt and John definitely know each other on some level, but if John is a daily reader of NBB, there is no reason to just assume that would stop.
Researching the second question definitely raises some redflags. The site data is here. Check out April’s analytics stats.
This is the graphic that is shown in the sales listing on sitepoint. The first thing that you should notice is that Matt chose not to show the May stats in the sales posting pictured below.
April averaged 500 visitors/day while May is only averaging 375. In the sales listing he also gives the April figure rather than the May figure. Maybe he did this only because the month of May is not complete.
The referrer graphic shown in the sales listing isn’t from April or May according to the title of the screenshots he took. Why is that? This is April’s referrers.
2300 visitors in April came from hitinvestor.com. HitInvestor is a website where you can purchase traffic. I asked about this in the sales listing and Matt said that he purchased that traffic for an article about paid traffic he was going to write but never got around to. I think this should have been subtracted from the stated traffic figures.
I checked out the other traffic graphics he provided, and this is the monthly breakdown. February was the first full month the blog was operational.
February – 88,000 uniques, appears the site was featured on digg several times
March – 23,000 uniques
April – 15,000 uniques, 2300 from hitinvestor paid traffic
May – on pace for 11,000 uniques
Obviously, the traffic has been on the decline. Matt does have a lot of RSS readers, and based on the referrer stats, there is also quite a bit of organic traffic. However, one has to think about the advertisers. Are they still going to be willing to pony up for reviews and links when the Alexa rank drops? I couldn’t check out the Alexa situation because their site appears to be down, but there is no way the site is ranked 20,000 with that many visitors. If the new owner isn’t able to create a digg worthy post once a month, ad revenues could suffer.
Based on the $1500/month the blog makes, with 20,000 pageviews, that works out to $75 CPM. Thats an incredible earn rate. I would guess that it has to be one of the highest in the web publishing industry. Can it be sustained? That the real question. Without substantial work on the part of the new owner, it certainly cannot be sustained. Thats the underlying problem I highlighted in yesterday’s post.
I wish Matt luck with the sale. There were a few redflags from the traffic graphs, and thats why I didn’t make an offer myself. I think this site has plenty of value for the right owner. The RSS readership is particularly nice. I don’t think he’ll get the $20,000 he is looking for. The auction is up to $5800 right now. I think that is a fair price for this site. In the right hands, a capable owner can continue Matt’s success and make the site flourish. I also think that $5800 is probably not very much in Matt’s eyes. I am sure he invested a lot of time and money (for advertising) to get this blog where it is in just 6 months. I doubt that $5800 will seem like a fair payback for all that. My advice would be to just keep the blog and continue to earn $1500/mon. Thats only 4 months of blogging to achieve the same pay.
Topics: Website Valuation | 6 Comments »
May 29th, 2007 at 5:48 pm
That’s an interesting idea for a racket. If there was some way to get your website extremely popular(e.g., John Chow), you could almost make a business out: create new web site; pump it up with your popular web site; sell the new web site; start a new web site; start pumping that one up; sell it; ad infinitum.
May 29th, 2007 at 7:21 pm
It’s definitely an interesting sale. I wrote about this on the day it went up for sale on 25 May in my post ‘Net Business Blog up for sale‘
I wrote about it from the angle of how intertwined the value of a blog is with the contribution of its author.
Once the author leaves – does the blog still have as much value? Is a blog so strongly associated with its author that it cannot succeed alone?
All very interesting and relevant points – I can’t wait to see how this one develops!
- Martin Reed
May 29th, 2007 at 8:34 pm
Matt,
There are a lot of people doing the very thing you are talking about. One only needs to browse Sitepoint every once in awhile to see the kind of sites that get churned out as a result of this process.
May 29th, 2007 at 8:37 pm
Martin,
I agree with you completely. It will require a person with very specialized skills to successfully run a site like this. I touched on that in a previous post about this sale.
The analysis above largely assumes that the new owner would be able to continue to produce the content. I feel that even if they were able to do this, the revenues are going to suffer, because the traffic has been slowing since February.
May 30th, 2007 at 1:41 pm
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June 14th, 2007 at 3:22 am
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