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June 10, 2008

Blog Economics

Chitika, an ad network, had a study of the revenues of the top 50,000 blogs for 2006 Chitika made the assumption that an estimate of total advertising revenues for a blog would be 3 times as much as the Chitika revenue for the blog. Using revenue trends and statistics from a representative
sample for the 12000+ Chitika publisher network. Ad revenue in a blog is more sensitive to the rank of the blog than what one would expect in a typical Zipf Law 80/20 curve situation. [More money for the top blogs and less for the the bottom]. Blog ranking was determined by Technorati ranking.

Top 50,000 made $500 million in advertising in 2006.

Top 10 blogs in Technorati, $40 million in ad revenue.

The top 1% accounted for approximately 20% of the total revenue.
Top 500 blogs made $100 million. Avg $200,000
11-500 blogs made $60 million. Avg $120,000

The top 5% accounted for approximately 50% of the total revenue.
Top 2500 blogs made $250 million
$150 million for 501-2500 Avg $75,000

The top 10% accounted for approximately 80% of the total revenue.
Top 5000 blogs made $400 million
2501 through 5000 made $150 million Avg $60,000

The top 15% accounted for approximately 90% of the total revenue.
Top 7500 blogs made $450 million
5001 through 7500 made $50 million Avg $20,000

7501 through 50,000 made $50 million Avg $1176.

Converting Alexa ranking to daily pageviews
Rank
242 www.saatchi-gallery.co.uk 0.5% reach 68 million page views/day
500 www.huffingtonpost.com 40 million page views/day
5000 www.space.com (4600) 6 million pv/day
35000 800,000 pv/day
70000 20-100,000pv/day

CPMs of $1 are low and $4 are average but it depends upon topic and being able to sell the inventory of CPM. It also matters how hard the site is trying to monetize.

Some Technorati to Alexa Ranks

http://makezine.com/blog
Technorati Rank: 10,810 Alexa: 6400 4 million pv/day

http://pajamasmedia.com/instapundit
Technorati Rank: 280 Alexa: 35000 250,000 pv/day

http://theoildrum.com
Technorati Rank: 2780 Alexa: 32000 70,000 pv/day

http://liewcf.com
Technorati Rank: 5752 Alexa: 18621 300,000+ pv/month

http://www/hackszine.com
Technorati Rank: 9073 Alexa: 50530 10k-30k per day

top 25 blog properties (5-15 times annual profit for valuation) for 2008

1.The Gawker Properties: $150 million. Gawker (#228), ValleyWag (#34 technorati), Gizmodo (#3 technorati), Wonkette (#678 technorati), and a number of smaller websites. The company claims 30 million monthly unique visitors. $11 million in revenue.

2. MacRumors: $85 million.Blog. It ranks No. 2,700 in Alexa. Page views at 33 million, which seems a bit high. Advertising at least $30 per page CPM. est $12 million and with 60% margin.

3.Huffington Post: $70 million. In late 2007 management claimed that the website had 4 million unique visitors per month and would bring in $7.5 million for the year.
#1 ranking on Technorati.

4.PerezHilton: $48 million. Is No 400-755 in Alexa. Compete show 1.3 million visitors a month. Quantcast puts month page views at 191 million. That seems high. It would put revenue at $900,000 million a month with a $5 CPM.

5.TechCrunch: $36 million. The TechCrunch network claims almost 3.2 million unique visitors and 14.6 million page views. Alexa 951-1795. CPM yield estimate $30. Revenue from advertising at $438,000 a month or $5.3 million a year. #2 ranking on Technorati.

6 (tied): Ars Technica $15 million. Sites ranks 2,500 in Alexa. #7 technorati. Audience is growing very rapidly. Quancast has reach at 1.1 million. Ads are all premium clients. Est $40 per page CPM. Page views are probably six million a month. Revenue of almost $3 million.



FURTHER READING
Craigslist revenue for 2008 is about $80 million

TV station web revenue $1.2 billion

Myspace revenue $800 million

Guy Kawasaki blog revenue was not very good in 2007

Adsense case study of Weblogs inc. $90K/month, 1 million/year, 60 million pageviews

10 steps to seven figure income from your site

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