The B 2.0 headline — “The Return of Monetized Eyeballs” — leaves me cold but Om Malik does a good job exploring the shift to an internet world where content + traffic can equal real money. Be sure to scan the chart showing the acquisition cost timeline from Excite circa 1999 at $394 per unique user to Excite circa 2001 at $0.73 cents and most recently, Weblogs Inc. at $10 a head. Not only does it illustrate the wild swings of the early years, it shows why another chart valuing certain blogs and social media sites at $38 per user based on recent deals is a little too simple. A third chart walks through VC thinking on valuations: cost of traffic acquisition plus stickiness plus add on services.
Advertisers and prospective buyers aren’t just looking for numbers, though. They want the right numbers and the right audiences, not just page views and meaningless clicks. As we’ve mentioned here a few times, News Corp. assiduously avoided some available properties in favor of branded sites that appealed to younger demographics with passionate interests. With TimesSelect, NYT.com is gambling that advertisers will pay the same or more to reach fewer users in a premium bracket. Just as VC David Hornik tells Om that not all pageviews are created equal, not all users are equal when it comes to advertisers.
Update: John Battelle doesn’t doubt the math but he’s not convinced by the valuation of Boing Boing as a $34 million site. “It’d be pretty hard to buy that and simply shove a big dancing flash ad in there and make your investment back – you’d lose the very thing you bought it for – the audience.”
Jason Calacanis calls the valuations based on eyeballs “absurd.” He follows that with his own math that would value Boing Boing between $500,000 and $3 million depending on actual revenues. He values a loyal repeat user at $1-3 dollars a year.
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