What's Huffpo Really Worth? The $200m Question
Is the Huffington Post really a $200 million company? Monday's New York Times story about the fast-growing group blog/news aggregator left a lot of people wondering about that eye-catching number, reportedly the price the company uses in its internal discussions about the possibility of a sale.
The consensus, among those who know about some matters: No, the Huffington Post is not remotely worth $200 million.
"It's absurd," says media banker Reed Phillips of DeSilva & Phillips. "It's not based in reality in terms of any metrics we see in the market."
"It's a ridiculous expectation based on their own perception of the brand," says another M&A banker who preferred to be anonymous. "There was a time when people would buy into ridiculous numbers like that, sight unseen, but that time has passed."
What would be a more reasonable valuation? Try $40 million. That's four times Huffpo's own high-end estimate for $2008 revenue -- a typical multiple for recent transactions involving content businesses.
Alternatively, one can also analyze the price in terms of traffic, but it doesn't make that much difference. Two hundred million dollars "seems to be way above market based on comparable transactions," agrees Henry Donahue, CEO of Discover Media and former CFO of Primedia's Lifestyles Magazine Group. Donohue recently wrote about blog valuations for Folio. Via email, he continues:
If you believe the Post, Discovery (a relatively aggressive media co.) paid $10 million for Treehugger, a blog with an obvious fit for their Planet Green business. According to Alexa, Huffington is 4-5x the traffic of Treehugger, but that doesn't get you to $200 million. The $10-20 per unique metric (which I still think is nuts) would put them at $40-80 million.
A major factor limiting Huffpo's worth is its focus on partisan politics. "Advertisers hate political content," notes one online publishing exec. That may be why Huffpo is extending its brand into the seemingly apolitical areas of sports and books. After a lot more of that type of expansion, maybe, someday, Huffpo will be a $200 million business.
Loading...
Thank you for registering as a Portfolio.com Insider. Your comment has been added.
Create Your Public Profile- Conde Nast Closing 'Portfolio'
- Apr 27 2009 10:02AM EDT
- Newspaper Circ: 'WSJ' Gains as 'NY Post' Tumbles
- Apr 27 2009 9:32AM EDT
- Idle Chatter: The Prognosis for Newspapers, more
- Apr 27 2009 8:55AM EDT
- Late Breaks: MySpace, NYT, 'New York'
- Apr 24 2009 4:01PM EDT
- Nostalgia, Entitlement and Murdoch's 'Journal'
- Apr 24 2009 4:00PM EDT
- Huffpo's Lerer on the 'New and Better' Journalism
- Apr 24 2009 12:44PM EDT
- Ailes Heats Up Cold Spring with Newspaper War
- Apr 24 2009 12:33PM EDT
- Happy Friday. Now Watch This.
- Apr 24 2009 10:24AM EDT
- Idle Chatter: NPR Cutbacks, Jon Meacham, more
- Apr 24 2009 8:50AM EDT
- Late Breaks: Twitter and the 'Times,' more
- Apr 23 2009 5:59PM EDT
- CNN Partner's Polling Finds CNN Fair, Balanced
- Apr 23 2009 4:10PM EDT
- 'Scientific American' Editor Out in Reorg
- Apr 23 2009 3:19PM EDT
- Idle Chatter: MySpace, Nerve, 'Millionaire,' more
- Apr 23 2009 8:20AM EDT
- Late Breaks: 'Observer' Editor Resigns, more
- Apr 22 2009 4:15PM EDT
- One Marriage, One Memoir, Two Opinions
- Apr 22 2009 2:31PM EDT
Categories
Links
- Contact Me
- News After Newspapers
- Romenesko

- Gawker

- Ad Age

- WWD's Memo Pad

- Keith Kelly

- NYT Media

- Jon Fine

- TVNewser

- Magazine Death Pool

- HuffPo Media

- Galleycat

- News Hounds

- Newsbusters

- Jezebel

- Editor & Publisher

- Hollywood Wiretap

- The Media Pundit

- FAIR

- I Want Media

- Viral Video

- Nikki Finke

- MediaFile

- The Business Insider

- Paid Content

- Valleywag

- Cover Awards

- Talking Biz News

- SI.com - Richard Deitsch

- Gapper Blog - Media

- Jon Friedman

- Nieman Journalism Lab

- NY Observer media page

- Media Shift

- Tyndall Report

- Media Nation







