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.
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Another Croatian
John Jones
Svetlana Gladkova
Opensource 
Michael Fidler 
Please change the url of BankRate.. its pointing to http://www.bankaholic.com rather than http://www.bankrate.com/
A young blond college co-ed came running in tears to her father. “Dad, you gave me some terrible financial advice!”
“I did? What did I tell you?” said the dad.
“You told me to put my money in that big bank, and now that big bank is in trouble.”
“What are you talking about? That’s one of the largest banks in the state,” he said. “there must be some mistake.”
“I don’t think so,” she sniffed. “They just returned one of my checks with a note saying, ‘Insufficient Funds’.”
some stats on blog sales, interesting for blog flippers
Kevin, thanks a lot for noticing, I will correct that immediately.
Good for them
The thing is, with more and more people seeing that one can sell a blog after 2 years for $15 million, will make them turn to blogging and we’ll see more and more people that think they can do it, too. It’s not that easy. Writing good content and ranking really well in Search Engines takes a lot of effort and a lot of time.
@Alex Ion: True, there’s nothing particularly good in thousands of new people venturing into blogging for profit only. But hopefully they will soon realize it is not that easy (and the $15 million acquisition is more of an exception than a rule). Besides, I think that the majority of people with this simple motivation, will get tired of blogging soon enough and will either learn to do it for pleasure or quit completely.
Svetlana, yes, that sounds about right.
Hey, I’m still doing research about this, I just can’t believe they would pay such an obscene amount of money for a blog site. The only conclusion I can think of is that bankrate just realized John Wu simply got lucky at the right time. If bankrate wanted to build the same blog they could. Hell, with 15 mil they could have Warren Buffet write blogs and reach 300K users in 10 days and SEO results in maybe 3-6 months. They definitely have the expertise to do such a thing. So why they paid 15 mil? If bankrate acknowledged John Wu simply got lucky with his blog they can’t replicate it. You can’t follow someone’s footsteps that won the lottery and buy your lottery tickets at the same gas station in hopes to win. Pure and simple you can’t replicate luck.
Phil, reasonable enough, they could acknowledge their own inability to do anything similar. And of course launching a blog and writing similar content a few years later will hardly bring you exactly the same results. Yet this amount still seems to be ridiculous when you compare it to the revenue the site can generate for the owner.
I don’t even know,fellow!) continued to write in the same vein, it is interesting people!