3 Most Expensive Blogs Sold in 2008 and Lessons Learned
by
on October 03, 2008,
Yesterday the blogosphere was abuzz over yet another acquisition in the blogging world with one-man blog Bankaholic purchased by BankRate financial information website and service provider for reported $15 million (with $2.5 million to be paid over the next 12 months if certain conditions are met).
The irony of the announcement is that the overall financial climate in the country does not seem to be favorable for any acquisitions at all - especially those that don’t seem to be backed by any significant revenue (and while we can only guess Bankaholic revenue, plastering a few Adsense blocks and affiliate banners over irregularly-updated content has hardly brought anyone millions - even though in finance affiliates pay higher than in tech).
We have all seen big acquisitions in the blogging world, of course, though this one does not seem to be a typical one to me since we rarely have such huge amounts associated with blogs no one seems to have heard about until the day of the acquisition itself. So I wanted to remind you of the largest acquisitions in the blogging world that we witnessed over the year and try to find any consistent patterns in them.
Bankaholic by BankRate
Topic: Financial services and banking
Price: $15 million
Staff issues: 1 to continue editing the blog
Announcement Time: October 2008
ArsTechnica by Conde Nast
Topic: Technology news, incredible ability to get to the front page of Digg with just about anything
Price: estimated $25 million
Staff issues: 2 founders and about 8 employees to remain with Conde Nast as part of Wired Digital
Announcement Time: May 2008
PaidContent by Guardian
Topic: All the money-related news with a special focus on technology sector, impressive ability to break news from some of their secret sources.
Price: $30 million +
Staff issues: Rafat Ali (founder & editor) and Nathan Richardson (CEO) both remain to run the business
Announcement Time: July 2008
Until Bankaholic stepped in the game with this unbelievable acquisition, I think the trend could really be here: to sell a blog for a double-digit amount in millions you need to run a popular technology-related blog that performs very well in various social voting sites like Digg or Reddit. Both PaidContent and Ars Technica are reputable brands enjoying enormous attention of readers. But it is clear that Bankaholic obviously does not fit into this pattern - even though the amount is only two times smaller than what Guardian paid for PaidContent. What’s more, the amount becomes even more amazing given the fact that Bankaholic is edited by a single blogger and is only a little over two years old.
So I can’t help but ask a question: have you ever heard of Bankaholic prior to this acquisition news? And have you heard about PaidContent or ArsTechnica before they announced their respective acquisitions? I think it is quite obvious that many will answer yes to the latter question while the former one will probably get more negative answers. But does that mean that the acquisition of Bankaholic is not logical or reasonable? Honestly, initially I myself could not see any sense in this particular acquisition but I think that I have changed my mind already.
I believe the conclusion here is pretty simple: you can have your blog sold in two major ways - by either growing it incredibly popular or by making it equally useful to the potential buyer (preferably both but the example of Bankaholic proves it is not actually a mandatory condition).
I mean, PaidContent is incredibly popular and drives tons of traffic - thus it was appealing for Guardian. At the same time Bankaholic does not seem to enjoy this type of popularity but it is no doubt useful and provides real value to the buyer. How? After reading comments about the blog acquisition on the posts covering it I have understood one thing - the key here is search engine optimization. The blog is ranked quite well with search engines for important financial terms like credit cards or bank accounts. So when a user is looking for something financial with one of the major search engines, chances are this user will land on one of Bankaholic pages - that can promptly send this visitor to buy some of the BankRate services.
A lesson to all the bloggers that have already started to daydream of anything close to this acquisition amount for their blogs is very simple: if you don’t see yourself growing your blog incredibly popular (which is more and more difficult now that environment is getting so competitive for many niches in the blogosphere), try to figure out how you can make it incredibly useful to some companies - and they will be sure to either sponsor your blog or eventually make a lucrative acquisition offer to you. After all, a price usually depends on value, not on the number of people familiar with your name.
