Getting Your Internet Money

Jan 9 2009 @ 12:20pm

Simon Dumenco questions whether Huffington Post is worth $200 million, notwithstanding the recently committed $25 million in venture capital money. This stopped me a little short:

Consider, for starters, HuffPo’s revenue. As Nat reported, from January through August of last year — the site’s most-trafficked year — "the site collected just $302,000 in ad revenue, according to an estimate from TNS Media Intelligence."

Gulp. But Huff is expanding into many non-political areas and has great brand recognition, even if it doesn’t actually, er, pay the vast majority of people who contribute to it. Dumenco proposes:

Maybe the Huffington Post could be worth more if it further cut its burn rate. For instance, rather than not pay its bloggers, it could charge them — for the privilege of getting to help maintain the jetsetting lifestyle of the Great Arianna, of course. As for some of the people the site does pay, like its tech staff? Those jobs could be offshored to, I dunno, Third World child labor. If HuffPo takes such steps, I could see the site being worth maybe $4 mil.

The grim reality for online journalism is that we have yet to find a way to make money from it. We need advertizing. 2009 is not the best moment to seek it.

(Hat tip: Frank Wilson)