Popping the blog valuation bubble

Jason Calacanis, CEO of Weblogs, Inc., who sold his network to AOL for somewhere around $25 million, has a great post a couple months ago telling everyone to stop valuing blog networks according to the benchmark his sale set. It rings just as true today, if not more so. He argues (rightly, I assert) that valuations are driven by revenue and revenue growth, not by monthly visitors. Spoilsport that I am, I would add profit to the equation as well.

Amen to that. I wrote a piece last year saying much the same thing. After all, if you use that $38-per-monthly-visitor benchmark to value Google, you'd have to value it at $1.3 trillion. While that may make Larry Page and Sergei Brin very happy, you really really don't want to do that.

Technorati Tags: Blogs, Business, Financial analysis, Internet, New media, Valuation, Web, Web 2.0