TechCrunch’s REAL Valuation

October 3rd, 2007 | Categories: acquisitions, blogs, financing, networks, social media, strategy

TechCrunch logoThere has been a huge fuss about TechCrunch’s valuation and a possible buy-out from CNET. A $100 million price tag has been tossed around and Arrington has joked about the whole situation. Rumours and possible acquisitors aside, let’s explore a deeper issue - the valuation. Digging even deeper, let’s take a look at how a blog (in particular) should be valued. Surprisingly enough, I’m not even going to use numbers.

Where does the true value of a blog come from? The content. Where does the content come from? The publisher. In the case of a multi-author blog, the true value is traced back to the original publisher. So what am I trying to say? A blog is worthless without the original publisher. Or, in this case, TechCrunch is worthless without Mike Arrington. You can strap a $100 million or $500 million price tag on the blog, but all goodwill is lost when the Arrington leaves. I think this is true for any blog. The user base is built around the style and perspective of the creator. All subsequent authors can try to mimick the original style, but it truly cannot be copied.

If CNET does buy TechCrunch, I doubt Arrington will be around for long. My guess is that he’s looking to pursue more exciting and captivating opportunities. If this does happen, what’s the outcome? Well, CNET will have bought the most expensive content management system in history.

NOTE: This post wasn’t meant to put down any of the other publishers or authors of TechCrunch. In fact, I have quite enjoyed most of their work. All I am illustrating is the need for the creator.

One Comment

  1. Stephen Albinati Says:

    Hi Aidan:

    I would disagree with your blog valuation method. I would draw a parallel of the larger blogs (with multiple editors) with that of a newspaper or magazine, who have a great deal of “brand equity” that are not directly related to a specific editor. For example, the National Post still has a great deal of value despite the fact that Lord Black is long gone and fighting the courts. True there is the extra layer of complexity in that hardcopy papers have a publishing and distribution aspect to them, but still all that set aside, the name still means a lot.

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