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Selling Blogs – Factors of Valuation

Auction-1The last couple of weeks have seen some real action in the selling of blogs in the ‘make money online’ part of the blogosphere with the sale of Blogging Fingers ($6000), Ryan Shamus ($2500) and One Man’s Goal currently up for sale and with the bids up to $6000 (update: this auction had to restart). Add to that NorthxEast selling a few weeks back ($8200) and there has definitely been something in the air.

Mark at 45n5 did a little analysis of the sales based upon subscriber numbers and points out that the blogs are selling for between $27.78 and $35.16 per subscriber (not including NorthxEast who sold for around $4 per subscriber).

I’m not sure subscribers numbers are the best way to value a blog – but it would definitely be one factor.

Other factors would include:

  • Traffic (actually visitor numbers and page impressions)
  • Current Earnings (how much the blog currently earns)
  • Potential Earnings (is there another income stream that could easily be added)
  • Profile of Blog in Niche (is it seen as a leader in it’s field)
  • Dependance upon the Blogger (does the blog revolve around one person, a group of bloggers etc)
  • Domain name (is the domain worth something in and of itself)
  • SEO Considerations (page rank, how it ranks for keywords etc)
  • Technorati Ranking, Alexa Ranking
  • Number of Posts in Archives
  • Ability to Expand Blog (can you add a new service or income stream to the blog – eg a job board, forum etc)
  • Ability to Repurpose Content (could the content be reproduced in a different form – eg ebook, book, course)

What other factors would you include when putting a value on a blog?

About Darren Rowse

Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.

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Comments

  1. Ivy says:

    I would definitely put in the authority factor of the blog. A blog with a strong authority factor / branding has the ability to bounce back from any unforeseen changes happening in the blogosphere and can diversify its business and earnings quickly. And people will still follow.

  2. Coen Jacobs says:

    Well Darren, seems your weblog is now worth $1,079,529.08.

    Please don’t sell it, we love your postings! :)

  3. Jamie Harrop says:

    1. Branding. Does the blog have a good reputation, or has the author just pissed a bunch of people off? If the latter, the brand is going to be damaged.

    2. This one is very important, IMO. Do people read the blog because of the author who is behind it, or because of the blog itself and the content it is? Quite often with blogs, people follow it and continue to follow it because of the person behind it. The person behind it is often quite a character who has authority, maybe via his or her earnings or something else. If people follow the blog solely because of who the author is, are those readers going to be as interested in the blog once it sells?

    Just a couple off the top of my head. I’m sure there’s more. :)

  4. CompuWorld says:

    –>Another good factor can be the original owner ready to give his/her services for the first few months of the blog being sold.

    As the blog being sold has the brand value of the owner too so if the owner stays even after selling the blog and gradually leave the blog than I am sure the new owner will find it easy to get mixed up with the readers of the blog.

    –> The kind of services which the blogger was using where money is spent monthly. Like who knows if the original blogger is paying 25 bucks to picnik for image editing. If the blogger is paying extra money to his hosting provider for the extra jump in traffic which he is getting. All this needs to be considered while valuing the blog as when you are the new owner than you need to keep investing in these services to provide the same quality..

    At the end of the day..I won’t sell my blog ever. CompuWorld is my dream company and the punch line is also mine own. I love this thing and I wont give it up where my career takes me. I see the future prospects of it instead of just getting the bunch of bucks which I will get when I sell it..

  5. Personally I’m skeptical of domain name valuations. I think you recently bought problogger.com, which sounds like a pretty valuable domain, for something like $7,000. I know that’s a reasonable amount of money but if you look at the domain name aftermarket you see people ‘trying’ to sell far less valuable domains for far more.

    I think the other things, such as number of visitors and what the site are currently earning are the really important things.

  6. 45n5 says:

    thanks for the mention, certainly rss isn’t the only factor but it’s a fun way to quickly value them relative to each other.

    the real interesting thing is all of these blogs are less than 6 months old.

    also, generally rss counts are congruent with the other factors you mentioned like traffic, branding, etc and therefore it could be argued that rss count IS a good way to value blogs. However I do think the price I used per subscriber is a bit high, just having fun.

    Another thing, WHY? Why are these blogs selling for so much? And will this niche continue to get hotter? I think it will.

  7. This seems to be a growing trend, but I guess it’s just like any other business. Looks like your blog has a little bit of value :D

  8. I sold my first blog for $17,000 a month ago. I was very happy! I reckon branding and se rankings was the most important thing.

  9. Sangesh says:

    Gee Darren, now-a-days the selling and auctioning of a blog is also in the news. Good to hear about these kinda stuff. It sure will help in bringing more ideas in the air.

    By the way, what about a post about trying to make viewers to put a price for your website, i mean, in what price would they would have or thought (logically) would problogger sell.

    Think about it,
    Cheers.

  10. mariam says:

    As Jamie Harrop mentioned, I think a lot has to do with the branding and the blogger behind it. It “concerns” me that these blogs are being sold as it says something about the time involved to establish decent readership. If the buyers aren’t willing to make the effort to start from scratch, how successful will they be in the future? And yes, I know they have web experience from the past but I really think that blogging is personal and a form of branding.

  11. That’s weird, I guess you should change the word ‘blot’ there :)

  12. Alfredo says:

    I think a good domain is the strongest factor in selling a domain. All the rest can be done by people after a great domain is purchased.

  13. mahdi yusuf says:

    what do you think some above average blogs would go for?

  14. April says:

    It would be interesting to see examples of blogs that have been sold and NOT in the blogging about blogging niche.

  15. Matt Jones says:

    I think people put too much emphasis on other blog valuing factors. For smaller blogs (that sell for $10k or less) the monthly earnings are not ‘just another factor’, it is the most important one that is way more important than any others.

  16. Bontb says:

    Weird today I was asked same question by one blogger, what she should sell her blog for.

    I also wrote an article tips to sell blogs now i really don’t like to see blogs selling

  17. Peter Cooper says:

    I’d probably throw in my left arm with the deal if I could sell my 12000 subscriber blog (well, except for today when it fell 50% thanks to FeedBurner ;-)) for even $10 per subscriber :)

    Personally, whenever I’ve sold businesses and sites in the past, I work on 3 years’ profit (or revenue, depending on the business). That generally results in a good sale. Since my 12k subscriber blog only makes perhaps $100 per month, that’d only be $3600 and I’d want more than ten times that!

  18. Ryan Shamus says:

    Just wanted to add my few cents worth… I have just purchased Ryanshamus.com – I was tempted to buy Blogging Fingers prior to the purchase but couldn’t justify $6k. The reason I bought ryanshamus was because the blog was fairly established (6 months), had a good reputation with other bloggers and readers and for me it has great potential with some existing traffic. I have been looking to start a blog up for a while now and when this opportunity came, I jumped at it. Hope to see you around… Gavin

  19. Frank says:

    A Blog is like a company:

    Soft Facts:
    Management, means Blogger, one or more
    Potential for the future
    Branch
    Quality (Layout, Content)

    Hard Facts:
    Earnings (Advertising, Merchandising)
    Traffic (via Search Engines, Readers)
    Costs (Hosting, Advertising, Production of Content, Posts, Video, Pictures)

    I think.

  20. Vincent Chow says:

    I’m not sure subscribers numbers are the best way to value a blot – but it would definitely be one factor.

    I think you meant blog?

  21. maneesh says:

    This week I wrote a series of posts on domain evaluation, and the one thing that I focussed and stressed on was the purpose or use of the domain for the buyer…

    I think this is the case with blogs as well.. among all the factors that you have listed, they all are unique and significant int heir own way… and how much they will be taken into consideration will actually depend on what value the buyer is looking at…

    so some may think rss subscribers are in fact everything… while for others it might be a good page rank.. wats funny about all these sales is that, most of them began their blogs around the same time.. and pretty much spoke on the same topic..

  22. “the best way to value a blot - but it would definitely be”
    Oops, a typo. Thanks for the chuckle. :)

    -Thomas

  23. My bad Vincent. You already pointed that out. I should have guessed. Also Carl Ocab.

    Well Darren at least you readers ore on top of your typos.

    -Thomas

  24. Sandy Naidu says:

    Not sure about the valuation but whoever takes over a blog has to have a similar style of writing to the existing owner. The same piece of information can be shared in many ways….What attracts people to a certain blog is the way the information is being shared and presented. So thats something I think has to be considered before taking over a blog.

    Sandy

  25. Besides using the statistics of the blog for valuation, how do you come up with a price for your “good will” and reputation? This seems to be a number that would bring up the most debate in negotiations.

    I wonder if you could start and sell “blog franchises” like McDonald’s in the real world?

  26. Dan Schawbel says:

    I think it’s hard to sell a blog that is connected to the individual writing it. Where would ProBlogger.net be without Darren? That is just one example.

  27. Thriveal says:

    Number of rss feeds is a good determiner, but future value and potential cash flow would have to be huge (why buy it if it doesn’t have serious future monetization potential?)

    Thanks, Jason

  28. TheGuru says:

    “I’m not sure subscribers numbers are the best way to value a blot – but it would definitely be one factor.” – Your Right, its not.

    A blogs value is calculated the same way that any other type of website is calculated, by income and revenue. If you run a brick and mortar company you don’t base how much your business is worth on the number of customers you have on your mailing list, you base it on revenue and profit.

    For the most part people interested in buying your blog are going to base how much they are willing to pay on revenue and profit, not on subscribers.

  29. Andrew G.R. says:

    Several offers have come in for the Jobacle blog – but nothing yet that can tempt me away from my passion. One of the tough things is separating emotion from business…

  30. Neerav says:

    Frankly I think those blogs were sold for far too much…

    The only factors which really matters is earnings, specifically:

    1. Past earnings (at least 1 year)
    2. Current Earnings, and how much ad inventory is pre-sold
    3. Potential Earnings (is there another income stream that could easily be added)

  31. Dom says:

    That’s interesting – the ~$30 figure fits in with calculations I did based on what people in this niche say they’re earning. I guess that means if you’re advertising, you want to keep your cost per subscriber acquisition well below that figure..

  32. Darren – I think this should be broken down into two categories: Sites that have killer design but no traffic/no earnings/no rankings BUT simply potential to get there based on design and concept of the site. Does it include video, podcasts, content or pillar articles, or what I think is catching on, being a secondary blogger covering topics by a top blogger, like Darren. How many secondary blogs do you see on how to make money, and, more importantly, the ones that write each post/page video to be the exact same topic as Darren. No original thought here by the secondaries but I’ve seen two or three sold on sitepoint for $3000.

    I’ve sold three sites on sitepoint myself with no rankings, URL just the WP design and concept. The selling of the concept on future value based on attractiveness and ability to attract buyers or other like-minded folks.

    This is a bit cynical… but who cares about traffic or alexa rankings if your audience is a bunch of lookers and not buyers. Shouldn’t your blog be a front end to educate your audience so they trust you and then begin offering higher-end products on the backend… Otherwise we’ll soon revisit history of internet valuations without any real value to see on paper or concrete cash flow.

    Just a few thoughts….

  33. The only reason I can think of to sell a blog is if I wanted to leave blogging, or leave a particularly flagging blog in terms of its performance.

    I’d think long and hard about long-term value of keeping a blog vs. the short-term gain from selling it, before I took any action.

    If you’re not going to write for the blog anymore, how long will it take for earnings to dwindle? Would earnings be greater over the course of a year or two than the sales figure? And if so, is the blog’s continuation more important to you, or the blog’s earning power?

  34. Jason says:

    Looks like Bryan’s OMG is now up to $8,500. Not bad for a 4-month-old blog. =)

  35. Adam says:

    So how common is the selling of blogs? Is that a reason some people make blogs, people who can get a blog booming quickly then sell them on?
    I am really new to blogging I set up 3 blogs that focus on my 3 main passions, fitness, surfing and my novel. for me it is all about the joy of sharing and hell if I can make a few bucks on the side to buy a beer or 2 at the end of each week then I am stoked!

  36. I’d use standard business valuations. That means I’d use income as a means of valuing the business. I am frequently surprised to see blogs selling for only a small multiple of monthly income. What’s with that?

  37. Jacob Lee says:

    Anybody have any thoughts on what filmcriticblog.com might be worth. The domain only?

    Jacob Lee

  38. Skellie says:

    I wonder if there’s a market for a new way to make money online: starting blogs, establishing them, and selling them? It seems that people are so daunted by the idea of building a blog from nothing that they’re prepared to pay tidy sums to have someone do the legwork for them.

    By that valuation you’ve got there Skelliewag is worth between $27,000 and $35,000 dollars. Not sure about that ;-)

  39. The Manolo must agree with those peoples who said that one should value the blog principally on the earnings, as one would any other business.

    Yes, there are many variables that modify this calculation, but it is still the earnings that count the most. And in the current somewhat frothy market, the Manolo figures that 3 to 5 times annual earnings for the established blog with the decent readership is the reasonable price.

    The multiplier goes up for the marquee blogs with more than six figure earnings, to something like six or seven, or ten, or even much more if the blog sits atop its category and makes the piles of money. (Henry Blodget said, half jokingly, he thought Techcrunch was worth $100 million of the American dollars. 20X earnings, yes?)

    But, of the course, valuation is the inexact science and the blog is only ultimately worth exactly what someone is willing to pay for it.

  40. I think you’re right. Given that Sciencebase has 2700 or so subscribers, I’d be sitting on about $80k…which cannot be right, surely my site is worth much, much more than that ;-)

    db

  41. Skellie, I think it’s a fair price – if it meets up to all those criteria, certainly, because it has the most important thing: great value for readers.

  42. Angelica Ars says:

    continuity in nr of visitors and popularity

  43. Missy says:

    According to the discussed valuations my blog would be worth around $2,030. Not a large sum, but certainly from an investment standpoint probably better than stocks, as my blog is only 4 months old.

    This is an interestingly juicy discussion. Blogs as investment vehicles. Wow!

  44. Mike Huang says:

    We should all just wait a couple more weeks and we should be seeing EVERYONE trying to sell their blogs. I just hope those stupid scammers won’t come toward the sales…

  45. Ryan Roberts says:

    I just wrote an article about how to use a corporate mergers & acquisitions strategy (earnout provision) to potentially increase your blog’s selling price.

    I’m not sure about commenting etiquette, so I won’t leave a link in this field. I guess just click my name to get to my Startup Lawyer blog. The article is titled “How to Sell Your Blog for What It is Worth.”

    As for basing valuation on rss subscribers, I’d be a little hesitant to do that as a first option. I’d start with revenue, then go to uniques, then maybe subscribers.

    I hope no one sold their blog based on Saturday’s Feedburner counts…

  46. heelcandy says:

    Unique visitors + subscribers is the way that I look at blogs that I’m potentially going to buy. Another great way to measure a blogs worth is referring traffic, where are the uniques coming from, google, links, rss feed? Lastly pay attention to the foundation articles that a blog has and see if they are long term articles or dated articles that will disappear with time. Hope that helps.

  47. Michael says:

    It’s strange that so many bloggers have decided to sell their blogs. I just wonder what exactly is causing it or if it is just a coincidence.

  48. rob says:

    Just curious

    * Traffic
    25,000′ish
    18,000 unique

    * Current Earnings
    $1400 – $2800

    * Technorati Ranking
    42,000

    * Alexa Ranking
    99,439

    * Number of Posts in Archives
    1200

  49. Austin Long says:

    Call me old fashioned, but for me it’s gotta be current earnings and short term earnings potential.

  50. Hangelbel says:

    Hi. Can I sell my blog even if I don’t have my own domain?