Boy, Henry “I used to be a famous Wall Street analyst” Blodget is sure on a roll — or make that a troll. Today he’s got a post about how TechCrunch could be bought by CNET for $100-million or so. His post is actually a response to one by Doug McIntyre at 24/7 Wall Street, in which Doug hypothesizes about blog networks such as TechCrunch and Huffington Post and GigaOm and how much they might be worth to existing media entities.
Mike has a sarcastic response to Henry’s post here. And there’s no question that $100-million seems like a fairy tale price — a lot like Henry’s $2,000 Google post from yesterday. Still, the idea itself makes sense. TechCrunch or GigaOm would fit as a part of CNET or several other media entities. The ironic thing is that selling would probably be a mistake, because at the moment they are doing far better than most of the companies that would be thinking about buying them.
Is $100-million nonsensical or not? Let’s look at the numbers: TechCrunch says it has 1.5 million unique visitors a month — although a commenter below says those numbers may be high — and CNET Networks has about 10 million a month, according to comScore (Compete says about 6 million a month). But as we all know, it’s about more than just uniques, right? It’s about monetization.
CNET had revenue last year of almost $400-million, although it only made a profit of $7-million, which is pretty pathetic. No one except Mike knows what TechCrunch made last year (check below for some Valleywag scuttlebutt — I have no idea whether it is even close).
Still, CNET’s market cap is $1.2-billion. If you assume that someone could monetize Mike’s 1.5 million unique visitors better than CNET can monetize its uniques (which wouldn’t be a stretch) then you could easily come to the conclusion that TechCrunch is worth about 20 per cent of what CNET is worth — or about $250-million.
I’m not saying it is, I’m just saying $100-million doesn’t look all that crazy. Oh, and Mike? If you do a deal, Cynthia Brumfield at IPDemocracy has some advice for you.
Dan Farber of ZDNet (which is part of CNET) notes that the rankings at Alexa and (presumably) comScore only measure CNET.com, but CNET’s family of sites get 137 million uniques a month. That’s an order of magnitude larger than the numbers I was using. That suggests TechCrunch might be worth in the neighbourhood of $20-million. Still nothing to sneeze at.