24/7 Wall St. recently listed The 25 Most Valuable Blogs. Two have been sold. Ars Technica was acquired by Conde Nast for about what we estimated. The 24/7 price tag was $15 million. Alley Insider reported that that Ars Technica’s price was $15 million to $20 million. PaidContent was sold to the Brit Guardian Group last week. The rumored price was $30 million. 24/7 estimated that the firm was only worth $3.5 million. We are told that a very large portion of the purchase price was contingent on future performance, but our number was probably still way off.

A few days ago, a rumor made the rounds to the effect that AOL was trying to buy TechCrunch for $30 million to $40 million. That price would be right on our estimated value of $30 million. TechCrunch management may want as much as $100 million for the company, which means it won’t be sold.
Based on audience and quality of content, there are about ten to fifteen blogs which will be sold to major media companies over the next year or so. The media conglomerates need them because the blogs have done well in portions of the market where traditional media have not. In a few cases, blogs have content which would be complimentary to the content of a division inside a company like Time Warner, Viacom, or The New York Times.

These blogs are especially attractive economically. Many of the largest blogs employ only a few people. That gives them a financial operating leverage that most traditional media do not have. It is much easier to make money on a big blog than it is to make money on a big magazine or newspaper. That will become a more frequent as traditional media lose more of their ad base

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24/7 Wall St. has reviewed its list of most valuable blogs and added a couple. We have looked at the major media companies that are most likely to buy a particular property. Then, we have added a new element. That is an opinion of which large company needs each blog the most.  Being a willing buyer and being a needy operator is not always the same thing. Ars Technica may have gone the Conde Nast, but the new CNET division of CBS (CBS), which is losing a lot of its audience to blogs, probably needed it more.

The list:

The Huffington Post will probably be bought by The Washington Post Company (WPO), which, oddly enough, is the company which needs Huffington the most. Two years ago, The Post set very high hurdles for the revenue out of its internet business. So far, the results have been extremely disappointing. The portion of its sales coming from online properties is much lower than that of The New York Times Company. Huffington is basically a political blog, although it has added a number of new sections. The Washington Post is the most politics-driven newspaper in the country. Huffington is probably worth $70 million or more. It is the cheap way for the Post to make up for all the ground it has lost online.

 
The Nick Denton Empire, Gawker Media Network, etc. is probably the most valuable blog operation in America, with a sticker in excess of $150 million. It owns Defamer, Jezebel, Gizmodo, Lifehacker, Jalopnik, and Kotaku. The most likely buyer of Gawker is Time Warner. It is a near perfect fit with celebrity-mad People Magazine and flame-throwing gossip website TMZ. The company that may need it the most is Conde Nast, especially if it buys People-clone US Magazine. Conde Nast does not have the huge web audience that AOL has to help Time Warner properties. It needs to significantly expand the online presence it has with websites related to its magazine content. Gawker would get Conde Nast there in just one move.

PopSugar, Sugar Inc. has fifteen sites about shopping, entertainment, and health. The content tends to be aimed at women from their late teens and early forties. 24/7 Wall St. estimated it is worth just over $110 million. It is probably a coin flip over who the most likely buyer would be. On the one hand, the company would be a nearly ideal match with the Conde Nast women’s magazines. On the other, NBC Universal has TV and online properties like Oxygen and iVillage which are a good match. NBCU just put money into women’s blog network BlogHer. The company that needs Sugar the most is Hearst. Hearst online properties have 18 million unique visitors a month. With Hearst’s magazine and newspaper ad revenue under tremendous pressure, it must increase its online opportunities while it still can. Dark horse buyer for Suger: Disney (DIS) for nice match with Hanna Montana.

TechCruch may already be in talks with Time Warner. AOL has a number of tech blogs which are rolled into a network called “Switched”. Many people view TechCruch as the premier blog about the world of online businesses, venture capital, and important tech developments. Time Warner remains the most likely buyer. AOL has been doing some shopping recently and paid a nifty sum for social network Beebo. The company that needs TechCrunch the most is CBS. With its recent purchase of CNET, it bought what many analysts think was a waning asset. The CBS online properties need a very visible presence at the top of their online effort. TechCrunch is as visible as it gets.

Perez Hilton came up on the 24/7 blog value list with a price tag of about $50 million. The easy call here is that this is a match with AOL’s TMZ. That makes Time Warner the most likely buyer. But, Viacom (VIA) needs it much more. The company’s flagging MTV franchise is still trying to be a force online. It has evolved from being a music video “channel” to a programming center for content like “Real World XX”. MTV has also moved heavily into the movie and celebrity scene. Perez Hilton could do a lot to enhance all of that. And, Perez and Sumner Redstone could become best friends

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GigaOm is a pearl of a site about the worlds of technology and online media. From the standpoint of competition, it must run up against TechCrunch and the Dow Jones All Things Digital site. Because Dow Jones is building multiple brands around tech coverage including content from WSJ.com, MarketWatch, and Barron’s,  News Corp might be the most logical buyer. But, The New York Times Company needs it much more. The company’s “Bits” franchise has strong coverage of the worlds of tech and innovation, but it lacks a lot of the “insider” content and scoops that the Om Malik properties have. GigaOm is worth $10 million. NYT ought to snap it up, even at a premium to that.

Drudge Report is a hard property to place. While Drudge is popular, it is still an immensely odd-ball site. The likely buyer of the site is probably the right-of-center Fox News, which itself is a part of the endless list of properties owned by the aged Australian Rupert Murdoch. Drudge and the Fox hosts could spend their days and nights baiting each other. Good theater and a nice way to bring in more visitors. Who needs it most? Gannett. Its online newspaper franchises have a huge audience, but most of the visitors are to the websites of their local newspaper properties. USA Today is Gannett’s only national online standard bearer. Drudge and Gannett would be strange bedfellows, but the country’s largest newspaper chain is bleeding and it needs to push its access to an online news audience as hard as it can

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SeekingAlpha has almost 700,000 unique visitors a month, according to comScore. It may not be as big as The Motley Fool, but it is moving in that direction. 24/7 Wall St. estimates its value at $15 million, but it is the kind of property that could cause a bidding war. It rolls up content from hundreds of financial blogs giving it scores and scores of articles a day. The most logical buyer for the property is Yahoo! (YHOO). SeekingAlpha content already dominates the blog section on all of Yahoo! Finance’s quote pages. But, Yahoo and AOL are already the largest financial sites in the US. Who needs SA? MSN Money does. It lags its two portal peers in online unique visitors and pageviews. It has very modest blog content, particularly compared to AOL, which has a fleet of money blogs. Ballmer & Company can afford it. They want to build their online operations? Here is a chance. Dark horse: McGraw-Hill which needs something in addition to BusinessWeek Online to get big in internet financial content.

Silicon Alley Insider is worth about $6 million according to our work. The most likely buyer is The New York Times Company. Unlike TechCrunch, SAI has a distinctly NY-centric bent to its content. The property would be a good match with both the “Bits” and “DealBook” franchises that NYTimes.com has now. The three content sites would “round out” the Times coverage of the worlds of Wall St., technology, media, and the online universe. Who needs it most? The Financial Times, which has a modest print and online presence in the US and is unlikely to make inroads against WSJ.com and the business and tech sections of NYTimes.com.  FT.com does not have compelling coverage of internet deals, internet companies, technology, and new media.  FT.com is also way too light on content about the money game which has been built up around online business, venture activity, and the giant US tech companies

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Douglas A. McIntyre

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