After 24/7 Wall St. published the Twenty-Five Most Valuable Blogs we decided to look at some niche content sites which compete with blogs and should have similar valuation data.
Sugar, Inc runs seventeen websites. The content at the sites is blog-like but the writing appears more highly controlled and edited than it would be at a blog. The destinations, which include PopSugar, FabSugar, and GeekSugar, are aimed at female teenagers and young women. The company was started by a husband and wife.
Sequoia Capital has put money into the firm. According to The San Francisco Business Times, Sugar bought in $5 million in revenue last year.
According to the company, Sugar’s network has 11 million monthly unique visitors and 55 million pageviews. The nature of the advertising would indicate that it gets low CPMs. For our model, we are putting that a $14 per page yield. Monthly revenue is estimated at $770,000., an annual run-rate of $9,240,000.
The company is expensive to run. It has 75 employees. With a full load of benefits, T&E, rent, and communications costs of $110,000 each, the costs for these people is $8,250,000. Accountants, outside consultants, hosting and serving add another $750,000.
The business is growing fast and has a small operating profit.
What is the company worth. Probably a lot to a company like NBC, Conde Nast, or even Hearst.
Could the company go for 12x revenue? Yes. That’s $111 million.
Douglas A. McIntyre
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