The value of many of the most significant blogs have increased in the past year as the economy continued to improve and advertisers were willing to pay more to reach audiences online.

Readership at most of the 25 blogs on the list has increased. Some of them have been around for five years or longer and their competition has either fallen by the wayside or been unable to gain significant market share.

All of the blogs on the 24/7 Wall St. list are private companies, as has been true in all four of the earlier lists. None are owned by larger media companies, corporations, consulting firms, or other businesses which do not have the blog or blog network as their primary operation. Blogs that were on previous lists that were sold include Ars Technica and PaidContent.org. Last year we ranked TechCrunch as the fifth most valuable blog with a value of $32 million. Based on recent media reports, AOL acquired the blog for $25 million to $40 million. 24/7 had estimated its revenue at $9.5 million and operating profit at $3 million. These almost exactly matches what media reports say the figures for TechCrunch will be this year. 24/7 Wall St. took most of its valuations of blogs on the list up 15% based on multiples of revenue and operating income–if the companies are profitable at all. This was based on the state of the economy, the value of some publicly documented media M&A transactions and the stock market values of media companies over the last year.

24/7 Wall St. estimated blog audience sizes by considering several audience measurement sources, not all of which measure every blog on our list. These included Quantcast, Compete, Alexa, Technorati, and comScore. These services have been criticized for low measurements of visitors and pageviews. 24/7 has, in some cases, accepted audience numbers from the blogs themselves, if they can be verified. Additional factors in blog valuations include the revenue from the advertising that sites run based on estimated CPMs and the number of ads run on each page. We also include blog audience growth rates, and operating costs, including staff, IT, overhead, and marketing and PR. Blog companies with related businesses such as conferences, like TechCrunch’s Disrupt gathering, get credit for the revenue from those as well. Blogs that are profitable get a higher valuation than those which are not.

One of the most important measurements of value is whether a blog is large enough or has a sufficient number of unique visitors to have a “moat” around it. Moats rely on editorial quality, sources, original content, established advertising bases and access to capital. Moats make it harder for other companies to create meaningful competition. Moats are not as deep if the owner or founder of a blog is essential to the blog’s success. It is not by accident that AOL locked in the services of TechCrunch founder Michael Arrington for three years and kept most, if not all, of the blog company’s staff.

The extent to which a blog runs controversial content was weighed, more heavily than last year. The rise of political blogs, many of which are polarizing, has limited the number of potential buyers. Other blogs publish controversial content which would also limit the potential pool of buyers, and therefore pushes down value.

Below are The Twenty-Five Most Valuable Blogs for 2010 ranking in order of most to least valuable.

1. Gawker properties.

Valuation: $240 million.

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The Gawker network of sites, controlled by founder Nick Denton, includes Gawker, Deadspin, Jezebel, Jalopnik, Gizomodo, Lifehacker, and several others. Gawker claims that its combined sites have just over 20 million unique visitors. Audience research firms do not give any reason to doubt those figures, and they actually seem to be low. The sites have about 235 million pageviews a month, and CPMs average $19 per page. This means the company’s revenue is $53.6 million. Gawker pays many writers based on their production and keeps relatively inexpensive office operations. The company’s flagship site only has a dozen or so writers and editors. Operating costs are about 55% of revenue. The content of the sites and their aggressive approach to topics would probably rule out many acquirers.

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2. The Huffington Post.

Valuation: $150 million.

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The large news and information blog has more than 20 million and 24/7 estimates pageviews per month of 180 million. Attempts by the company’s new management and sales staff to raise the quality of the site have worked. Average CPMs on each page is up to $13. Huffington’s revenue for 2010 will be close to $28 million. The company, however, is very expensive to operate and has an extremely complex publishing platform. The firm has more than 150 employees and many additional editorial contributors, some of whom are paid. Huffington management said the company would make money this year, and 24/7 numbers project a very modest operating profit.

3. Drudge Report.

Valuation: $50 million.

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Drudge would be worth more but its value is highly dependent on the fate of founder Matt Drudge. The site’s unique visitors are higher than last year, up about 30% to 13 million. That may improve as the midterm elections near. Drudge posts its own figures for visitors on its homepage, but the numbers are ridiculously high. The quality of the site’s advertising has risen and CPM per page should be $6 this year. Based on 24/7 Wall St.’s pageview estimates, Drudge revenue in 2010 will be nearly $13 million. The company is very inexpensive to run, and our estimates put operating income at $6.5 million after sales costs are taken into account.

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4. PopSugar Media.

Valuation: $40 million.

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The family of sites for young women has about 14 million unique visitors a month. Household income of the people who go to these sites is relatively low. The company is one of the more likely M&A targets on this list because it delivers a large audience, is only moderately dependent on its founders and is inexpensive to operate. PopSugar has more than 12 major branded sites, several of which target visitors outside the US. Our estimated CPM per page is $8. Revenue based on 24/7 Wall St. pageview estimates is $11.5 million. Sugar Inc. has full-time and part-time staff of close to 100. Operating profit is nearly $3 million.

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5. MacRumors.

Valuation: $37 million.

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The leading site on all things Apple, this property has significantly improved the quality of its adverting from last year. The site has 7 million unique visitors. CPM per page is up to $10. Revenue is $9 million. The company has less than a dozen full-time employees and freelance writers. NetShelter Technology sells the site’s advertising inventory. Operating profit is $2.5 million.

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6. Cheezburger Network.

Valuation: $35 million.

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A collection of sites best known for IcanhasCheezburger? The properties focus on oddball humor for the “X” and “Y” generations. The company also owns Fail Blog which is a collection of picture and videos of people in the midst of failing at things and of things that are themselves failures. The network has 11.8 million unique visitors and 110 million pageviews. The sites have a CPM per page of $8 and revenue of $10.5 million. The company is constantly starting new sites which it keeps or kills quickly based on traffic. Operating profit of $4 million.

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7. Perez Hilton.

Valuation: $32 million.

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The celebrity news site, which is an increasingly crowded field dominated by large media companies, has 6 million unique visitors a month. Advertising is sold by the BlogAds network. CPMs remain low, as was true last year, but the number of premium ads is up and our CPM estimate per page is now $8. Revenue for the site is $5.4 million. Perez Hilton has an extremely small editorial staff and nearly no general and administrative costs. Operating income before what the owner takes out of the business is over $2.2 million. The site’s value is dependent to a large extent on its founder.

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8. SB Nation Network.

Valuation: $30 million.

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A network of blogs which covers nearly 300 teams and other sports related topics. The content is created by paid editorial staff and large fan groups, which keeps its operating costs low. Nearly 8 million unique visitors. Ninety million pageviews driven by a rabid fan base. Revenue of $5.4 million and $3.3 million in operating income due to employee count of about 30 compared to the huge number of sites under its management. Company proves the maxim that “sports are fundamentally local.”

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9. Funnyordie.

Valuation: $24 million.

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A site that aggregates humor videos, based on whether viewers think they are funny or should be killed – a cross between Reddit and YouTube. Founded by a number of well-known comedians including Will Ferrell, the site says “Funny Or Die has offices in Japan, Madagascar and Bahn, nine full-time lobbyists in Washington and an elite private security force consisting of four hundred soldiers and six attack helicopters.” The site has more than 11 million unique visitors and 40 million pageviews. CPMs of $14 push ad revenue to $6.7 million. Staff of 35 or so and operating profit of $3.4 million. The value of this site depends heavily on the celebrities involved.

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10. Mashable.

Valuation: $20 million.

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Pageviews of 40 million and a high CPM of $15. Revenue of $7.2 million. Staff and freelance contributors are close to 30. Operating profit is $1.4 million. The company claims it is “one of the top 10 blogs worldwide.” Metrics say otherwise. Company success is heavily dependent on celebrefounder, Pete Cashmore, who was named one the Forbes Top 25 Web Celebrities.

11. Seeking Alpha.

Valuation: $19 million.

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Seeking Alpha. 35 million pageviews $4.2 million in revenue. Most content is written for free by contributors, but SA has added many editorial, sales, and business development staff. Expensive tech platform requires expensive maintainance. A $840,000 profit. Founder is not critical to ops. According to the site, it publishes 250 articles per day from more than 3,000 contributors.

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12. GigaOm $16 million.

Valuation: Pageviews of 12 million at a $19 CPM.

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$2.7 million in ad revenue. Conference and ancillary revenue of $2 million. There are high costs to operate conferences and big editorial staff. Operating income of $500,000. Founder Om Malik has done a good job diversifying staff. Considered to be the Tiffany-site of the tech world.

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13. BoingBoing.

Valuation: $15 million ($18 million in 2009).

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One of the premiere gadget sites, unique visitors are 2.5 million. The blog still has many fans for its futurism and tech-centric viewpoints, calling itself “media culture brainwash for now people.” (Wow.) Revenue is $4.6 million based on $11 CPM per page. Heavy staff and freelance keep operating profits low. Federated Media also takes a big cut to sell ads. Operating profit $700,000.

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14. ReadWriteWeb.

Valuation: $9 million.

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The site covers online trends, particularly as they relate to Internet industry news. Ten million pageviews and $25 CPM per page. Total revenue of $3 million. Editorial and administrative staff of over 20 and ads sold by Federated Media. Operating income of $300,000.  Its audience includes many top IT decision makers.

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15. Business Insider.

Valuation: $9 million.

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This group of blogs, run by Henry Blodget has grown rapidly over the last year. The site covers everything from Wall Street gossip, to Internet media trends and high finance. The company has taken in substantial venture capital. Unique visitors are close to 3 million with 25 million pageviews. The CPM per page is $11. Total revenue $3.3 million. Very large and expensive staff plus IT costs. Operating loss of $500,000. Value dependent on founder for visibility and some of its best stories.

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16. Breitbart sites.

Valuation: $8 million.

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23 million page views on 2.9 million uniques with $470,000 profit from ads sold by Federated Media network. Right-winger Andrew Breitbart claims to be a founder of The Huffington Post and was an editor at the Drudge Report. Revenues of $4.7 million. Value of this popular conservative site is closely tied to its founder.

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17. BuzzMedia.

Valuation: $7 million.

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This company runs several sites, the most visible of which is The Superficial. The firm also creates websites for celebrities. The aggregate audience of the operations is almost 12 million pageviews. CPM of $10 for total ad revenue of $1.4 million. The company also runs the websites for celebrities including, Britney Spears, Kim Kardashian, and Nicole Richie. Management of these blogs for celebrities is the largest part of its business and brings in $3 million a year. The company may be the best example of making money from blogs without “owning” the content. Total revenue from all sources $4.4 million. Very large staff and breaks even.

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18. Destructoid.

Valuation: $6 million.

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A big site for young gamers who seem to spend substantial amounts of time on the site as they likely do with their video games. Articles includes a great deal of inside-the-industry content. Posts are often user/”moderator” driven. Core staff of about a dozen people is supported by more than twice as many contributing editors. Fifteen million pageviews with a CPM per page of $12. Total revenue of $2.2 million. Operating profit of $216,000.

19. Slashfilm.

Valuation: $5 million.

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A film review and movie industry website. The blog also has a large number of major movie trailers. Pageviews of six million and CPM of $12. Total revenue of $864,000. Operating profits, with four full-time people, of $600,000.

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20. Smashing Magazine.

Valuation: $5 million.

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The lead online site for web and graphics and design software application. The site and its sections have ten million pageviews. The site’s CPM is $18. As evidence of its tech popularity, the site has 265,000 Twitter followers. Total revenue $2.2 million. The company has over 20 full-time staff and regular contributors. Profit is $432,000.

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21. TPM Media.

Valuation: $5 million.

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TalkingPointsMemo is the flagship of this group of sites about political news and policy. Fifteen million pageviews. Also owns TPMMuckracker and TPM TV. CPM of $10 with revenue per year of $1.8 million. Company is fairly staff heavy. Operating profit of $270,000.

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22. Pitchfork.

Valuation: $4 million.

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This music criticism and news site focuses on the indie music scene. Nearly 2 million unique visitors and 33 million page views with a fairly low $5 CPM per page. It is credited with helping a number of artists gain critical exposure. It has a large staff of more than 20. Company does no better than breakeven. Relatively complex site to operate.

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23. Pajamas Media.

Valuation: $3.5 mllion.

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Formerly a blog network. It is now a news and opinion site, affiliated with conservative causes. Pageviews of 12 million and CPM of $10. Revenue $1.4 million. Firm has modest staff and website maintenance costs. It does us an ad network for sales – Intermedia Markets Portfolio. $200,000 in operating profit.

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24. Mediaite.

Valuation: $3 million.

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Site tracks activity of major media and ranks industry pundits – its so- called “Power Grid.” 1.2 million visitors. 4 million pageviews. $11 CPM. Revenue of $582,000. Operating profit: $50,000. The site was founded by Dan Abrams, former general manager of MSNBC and chief legal analyst of NBC News. His involvement is loosely tied to the identity and value of the site.

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25. MichelleMalkin.com.

Valuation: $2.5 million.

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Ultra right-wing site run by ultra right-wing columnist. Site has 900,000 visitors. Eight million pageviews. And at a $7 CPM, revenues are about $675,000. Staffing and operating costs are low as this is really one person blog. Ads are sold by BlogAds. Operating profit of $335,000. Nearly impossible to sell without her participation.

-Douglas A. McIntyre, Ashley C. Allen

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