How to Measure a Blog's Value: What is a Link Worth?

How much is your website worth? That's not an easy question to answer, but one way to measure the value is to look at the metrics of sites that have already been sold. One popular example of this is Weblogs, Inc's sale to AOL last October.

AOL purchased Weblogs, Inc for an undisclosed sum last year estimated at somewhere between $25 - $40 million. Tristan Louis broke down the publicly available metrics for Weblogs, Inc's network, including the number of inbound links per site divided by the purchase price to determine what an inbound link to a site may be worth. Louis' numbers estimated the value between $564 - $903 per link. Louis used Technorati's inbound link data as its data source, which does a good job of reporting links from blogs, but would under-report links from other sources.

Using the same metrics used by Tristan Louis, how would your site be valued? It turns out that there is an easy way to find out. Just go to Dane Carlson's Business Opportunities Weblog where Dane has created an application that will calculate the value of your blog based on the Trisan Louis' Weblogs, Inc. calculations. According to Dane Carlson's calculator, Technology Evangelist today is worth:

Is that an accurate figure? Who knows. Considering that this site launched 4 months and 1 day ago, it sounds pretty good. However, I don't think it accurately measures the future value of the site, which is really what matters when estimating the value of a company.

How do you think a blog's value should be measured? Here is a quick list of objective metrics that could be taken into consideration:

Page Views
Visitors
Comments
Feedburner Circulation
AdSense Revenue
Overall Ad Revenue
Technorati Links
Search Engine Rankings
Google PageRank
Pages Indexed in Search Engines
Podcast Downloads
Podcast Popularity on Odeo
Video Downloads
Video Plays on other sites like Google Video & YouTube
Video Popularity on VideoBomb
Number of Diggs
Number of Del.Icio.Us Bookmarks

Is anyone willing to estimate the value of the above metrics? What's a video download worth? What is a PageRank 4,5,6,7 web site worth? What's the value of a Digg? Do any of these metrics have anything to do with the value of a website? Share your thoughts in the comments below.

Brand, links, downloads, etc. mean nothing when it comes to valuation. That is the same backwards thinking that lead to the dot com bubble and bust.

Matt Drudge has billions of visits each year, thousands of inbound links, and a loyal following, and yet he admittedly doesn't make seven figures.

Jason, you raise a very interesting point about Drudge. It sounds like you're saying that Drudge's online presence should be worth much more than he earns from it based on metrics such as inbound links, visitors, and a loyal following. If that's the case, aren't you determining the potential value of Matt Drudge's site based on metrics other than the income it actually produces today?

Great article, and to my surprise by blog is worth $18000 and i am failing to understand what it means

Comments

1. Posted by: WebMetricsGuru on March 22, 2006 9:58 PM:

Well, I think FeedBurner circulation has value. Suppose we assign the value of a subscriber to the potential sales that subscriber can bring in one year (let make that 260.00 for this example).

AdSense Revenue and overall Ad Revenue has value, and I'd look at the sales for 1 year (or estimate it if less than a year) and then multiply by 2.5 (for valuation).

Podcast downloads might have some value - but only if your taking over a Podcast Network/Brand/something people know about. I'd initially assign 10 dollars per each subscriber and then try to find the actual value a subscriber could potentially be worth.

I would not assign a value to PageRank (I know it's tempting - but looking at Pagerank without considering how many backlinks a site has, or what kind of opportunities it has ...is worthless.

That's my take.

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