Erick Schonfeld reports today that Federated Media, a network which sells ad space on a network of blogs, is raising $50 million at an eye-popping valuation of $200 million. That's a hell of a lot of money: it's nine times 2007 revenues, and earnings have only been positive since September, so it's hard to even imagine what the valuation is as a multiple of earnings.

How can ad-selling networks like Federated Media be worth so much money, when they have precious little in the way of earnings and absolutely nothing in the way of actual content? It's not obvious, but this certainly seems to be a good business right now: Federated Media rival Blogads was the driver behind Ken Layne taking over Wonkette from Gawker Media, while Glam Media, which is an ad-selling network at heart, is valued at $500 million.