Monday, January 05, 2009

Is HuffPost Worth Only $2 Million?

There was a story pushed by the New York Times last year claiming the leftwing House Organ of Hate was somehow worth $200 million, but that seemed to be wildly over-inflated.

Well, just like their visits are plummeting, so has the value, according to this report.
What if the privately held Huffington Post is worth not $200 million -- a cracked-out number floated last year -- or even $100 million, but, say, $2 mil?

This is not entirely an academic question, given that in December HuffPo astonished media watchers by securing $25 million in additional funding from Oak Investment Partners, a Palo Alto, Calif., venture-capital firm. The timing was particularly amazing, given that the lefty uber-blog's traffic has lately been plummeting -- a possibility my colleague Nat Ives examined way back in October. At the time Arianna Huffington insisted to Nat that the "Huffington Post is no longer as dependent on politics," and so she wasn't particular worried about the usual post-election readership swoon of politically-focused publications.
Sure, maybe it's not so dependent on politics and has now moved to ripping off material from others.
That $200 million figure first appeared in a Brian Stelter piece in The New York Times last spring. "According to one person who was briefed on discussions but was not permitted to speak for attribution," Stelter wrote, "the company has at least looked at the value of the site if it were put up for sale, and a figure around $200 million was used."

Amazingly, that number actually gained currency, though anybody with basic math skills and a halfway-decent bullshit detector knew the figure was nonsense, even before the economy melted down. 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."
Read the rest. While the estimate of $200 million is no doubt wildly overstated, I think the $2 million seems to be a bit low. But it would puncture the overinflated ego of Arianna Huffington, to say the least.

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