Apparently, congratulations are due for Henry “I used to be a famous Wall Street analyst” Blodget and the rest of the team over at Silicon Alley Insider: the site has apparently raised about $1-million or so in venture capital. PaidContent has the news — although Rafat and the gang at PC (who just got their own windfall of $30-million or so from Guardian Media Group) seem a little miffed that their scoop was broken by SIA itself, after Henry blogged the funding news. Alley Insider is part of a Web 2.0 holding company of sorts called Alley Corp., which was created by former Doubleclick execs Kevin Ryan and Dwight Merriman, and recently launched two new properties: Clusterstock.com and The Business Sheet.

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.

Update:

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.

Update 2:

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.

Mike’s got a post up at TechCrunch about Henry “I used to be a famous Wall Street analyst” Blodget, in which he goes on at length about Blodget’s Google-related post at Silicon Alley Insider today — the one in which Hank argues that Google could hit $2,000 a share. Mike seems genuinely pissed that Henry is shooting his mouth off about such a thing, especially after the history, and says someone should “muzzle Blodget.”

The history, as pretty well everyone knows by now, goes more or less like this: in 1998, Blodget says Amazon is going to $400, it does so, stocks climb to the moon, then they crater, Blodget is investigated for fraud for misleading investors by publicly pumping stocks and privately dumping on them, etc. and agrees to a settlement in which he is barred from the securities industry for life.

As I said in a comment on Mike’s post, I could be wrong, but I read Henry’s post as a sarcastic response to a reader who complained he was being too pessimistic all the time (can you blame him, given what happened the last time he was overly positive?). I think the point he was making was that it’s easy enough to throw a few multiples out there, a few back-of-a-napkin financial projections, and get to almost any number you want. Heck, that’s what analysts do for a living — as Blodget knows better than just about anyone.

I think Henry was having some fun with his reputation, and maybe trolling to get a reaction. And he sure got one.

Update:

Henry has an update on what he was up to (and a response to Mike) here, and Kara Swisher has a take on it as well.

Henry Blodget — who used to be a Wall Street analyst and now runs a content hub called Silicon Alley Insider — recently wrote a provocative analysis of the online newspaper business entitled Running the Numbers: Why Newspapers Are Screwed, which ran at the Insider as well as Blodget’s personal blog, Internet Outsider (I guess he’s an insider and an outsider).

Henry’s point is a relatively simple one: publishing content online costs a lot less than publishing it on paper, and therefore newspapers can save a lot of money by running their stuff online. Unfortunately, online content also generates a lot less revenue than printed content does, so newspapers actually wind up worse off if they move online.

To justify this line of argument, Henry looks at the New York Times — presumably because if the New York Times can’t make the math work, no one can. Using (for the sake of argument) the idea that the Times immediately stops publishing in print and moves entirely online, here’s what Blodget says would happen to the company’s bottom line:

Revenue drops by more than half, 40%-50% of employees get fired, and the company still loses money. Using the NYT’s Q2 numbers and these assumptions, for example, revenue would have dropped from $789 million to $285 million.

More importantly, EBITDA (earnings before interest, taxes, depreciation, and amortization) would have dropped from $118 million to -$64 million.

Not a great picture, is it? But there are a number of problems with Henry’s analysis, as several people — including my friend Mark Evans, who has posted some thoughts on the subject, and Seamus McCauley of Virtual Economics. Seamus in particular takes issue with many of Blodget’s assumptions.

Among other things, Seamus makes the point that a proliferation of online content actually makes certain kinds of content more valuable — particuarly content that has been verified by trusted sources, which he believes is the true core competency of mainstream media organizations (Jack Trout has some ideas about what makes newspapers valuable here, while others think a paper’s most valuable asset is its useability).

Are Blodget’s projections unrealistic? Pretty much, yes. Obviously, printed newspapers aren’t going to vanish overnight, nor is online advertising going to remain static. But thinking about what might happen if they did is definitely a worthwhile exercise.

Former Merrill Lynch and Oppenheimer analyst Henry Blodget of Internet Outsider – which is where Henry pretends to still be an analyst, even though his legal settlement with Eliot Spitzer prevents him from actually becoming one again – has posted a long rant about Google announcing a proposed settlement in a “click fraud” case. Among other things, he seems upset that the search company disseminated this info by posting something on the official Google blog. Here’s what he says:

“To make matters worse, the company released its “statement” about the settlement on its blog. A $90 million payout on a critical issue at the forefront of every Google observer’s mind… and the company has an anonymous associate general counsel type up an “update” on a freaking blog. Google needs some new PR people, and it needs them now.”

Anyone agree with that? I’m not sure I do. I may not believe that the traditional press release is dead, but I would agree with Steve Rubel that blogs are serving the same function for many companies – and rightly so. Why shouldn’t Google put out news by posting something to the blog? I assume the company is still complying with disclosure in other ways, such as filing to various securities-related newswires and so on. And smart reports for wire services are watching the Google blog and filing stories about what they put there.

Want to keep up with Google’s statements on something? Subscribe to their RSS feed. I’m not sure why Henry thinks this is such a huge deal, unless it’s that blogs are somehow a joke and “real” companies do things the old-fashioned way, by sending out press releases and email spam and so on. How is posting on a blog any different than putting a press release on your website? Plenty of companies do that and no one complains.

Update:

Henry has expanded on why this bothered him. Still don’t see it, Hank.