The power of the network and links
Many in the blogosphere say that traffic is not a good measure of what blogs are but that conversation, as represented by links and indexes like Technorati, represent a more accurate view of the value of a blog. As a result, I decided to look at how may sites were linking to sites in the WeblogInc empire. Jason and Brian have been doing a great job at building a stable of blogs but it seems a large portion of their success comes from a single blog. Let’s dig into the numbers.
In the following table, I took a look at the list of blogs listed on the weblogs Inc. main site and ran the Technorati site numbers against them (duplicate entries in the weblogsinc list were removed as well as entries that pointed to sites which no longer exist).
| Weblogs Inc. Blogs | Technorati Sources |
|---|---|
| Consumer | |
| AdJab | 593 |
| Autoblog | 1,573 |
| AutoblogSpanish | 129 |
| AutoblogChinese | 18 |
| AutoblogSimplified Chinese | 27 |
| BloggingBaby | 518 |
| CardSquad | 193 |
| Cinematical | 1,118 |
| DownloadSquad | 1,041 |
| Divester(scuba) | 240 |
| Engadget | 13,354 |
| EngadgetChinese | 348 |
| EngadgetSimplified Chinese | 37 |
| EngadgetJapanese | 518 |
| EngadgetSpanish | 334 |
| Gadling | 461 |
| hack aday | 1,906 |
| HD Beat | 206 |
| Joystiq | 1,740 |
| Luxist | 430 |
| PVR Wire | 233 |
| Slashfood | 288 |
| TUAW(Apple) | 1,853 |
| TV Squad | 1,090 |
| Technology | |
| CSSInsider | 147 |
| Digital Photography | 301 |
| FlashInsider | 224 |
| Google(Unofficial) | 526 |
| JavaScript | 119 |
| Microsoft(Unofficial) | 263 |
| Office | 271 |
| OpenSource | 244 |
| Peer-to-Peer | 336 |
| Photoshop(Unofficial) | 265 |
| RSS | 339 |
| SAS(Unofficial) | 211 |
| SearchEngine Marketing | 123 |
| Social Software | 548 |
| Spam | 121 |
| TabletPCs | 287 |
| VoIP | 257 |
| Yahoo(Unofficial) | 326 |
| Wireless | |
| BBHub(BlackBerry) | 156 |
| Bluetooth | 246 |
| Engadget:Cellphones | 226 |
| Engadget:GPS | 222 |
| RFID | 237 |
| UltraWideband | 218 |
| WiFi | 116 |
| TheWiMAX Weblog | 217 |
| Engadget:Wireless | 235 |
| Wireless Dev | 233 |
| Wireless | 310 |
| Video Games | |
| BloggingE3 | 1 |
| Engadget:Gaming | 255 |
| Playstation 3 | 117 |
| VideoGames | 219 |
| Xbox2 | 232 |
| Media and Entertainment | |
| Design | 215 |
| Digital Music | 306 |
| Droxy(Digital Radio) | 220 |
| DV Guru(Digital Video) | 147 |
| Magazine Design | 237 |
| Nanopublishing | 243 |
| Business | |
| EnronBlog | 188 |
| TheMortgages Weblog | 192 |
| OutsourceReporter | 62 |
| SCM Wire(supply chain) | 201 |
| Life Sciences | |
| TheCancer Blog | 229 |
| TheCardio Blog | 186 |
| TheDiabetes Blog | 106 |
| Medical Informatics Insider | 139 |
| Telemedicine Insider | 137 |
| Personal | |
| BrianAlvey | 278 |
| JasonCalacanis | 1,145 |
| BlogMaverick | 1,917 |
| GordonGould | 169 |
| JudithMeskill | 211 |
| Events | |
| BloggingBlogHer | 124 |
| BloggingDEMO | 166 |
| BloggingETech | 186 |
| BloggingGnomedex | 189 |
| Futureof Music | 79 |
| BloggingMilken | 211 |
| BloggingSundance | 128 |
| BloggingWeb 2.0 | 76 |
| Live8 Insider | 184 |
| Other | |
| Weblogs,Inc. | 9 |
Once you have this data, you can start doing some quick analysis. For starters, I started to analyze what percentage of the overall network linkage each blog represented. I then took that percentage figure and used it against three different financial scenarios which have been floated around: some people say the company received 25 million dollars in the acquisition, and others have mentioned a figure of 30-40 million dollars. The details look as follows:
| Weblogs Inc. Blogs | Technorati Sources | % of overall | Price at 25 million | Price at 30 million | Price at 40 million |
|---|---|---|---|---|---|
| Consumer | |||||
| AdJab | 593 | 1.34% | $334,831.51 | $401,797.81 | $535,730.42 |
| Autoblog | 1,573 | 3.55% | $888,178.70 | $1,065,814.44 | $1,421,085.92 |
| Autoblog Spanish | 129 | 0.29% | $72,838.56 | $87,406.27 | $116,541.69 |
| Autoblog Chinese | 18 | 0.04% | $10,163.52 | $12,196.22 | $16,261.63 |
| Autoblog Simplified Chinese | 27 | 0.06% | $15,245.28 | $18,294.34 | $24,392.45 |
| Blogging Baby | 518 | 1.17% | $292,483.51 | $350,980.22 | $467,973.62 |
| Card Squad | 193 | 0.44% | $108,975.52 | $130,770.62 | $174,360.83 |
| Cinematical | 1,118 | 2.53% | $631,267.50 | $757,521.00 | $1,010,028.01 |
| Download Squad | 1,041 | 2.35% | $587,790.22 | $705,348.27 | $940,464.36 |
| Divester (scuba) | 240 | 0.54% | $135,513.60 | $162,616.32 | $216,821.75 |
| Engadget | 13,354 | 30.16% | $7,540,202.37 | $9,048,242.84 | $12,064,323.79 |
| Engadget Chinese | 348 | 0.79% | $196,494.71 | $235,793.66 | $314,391.54 |
| Engadget Simplified Chinese | 37 | 0.08% | $20,891.68 | $25,070.02 | $33,426.69 |
| Engadget Japanese | 518 | 1.17% | $292,483.51 | $350,980.22 | $467,973.62 |
| Engadget Spanish | 334 | 0.75% | $188,589.76 | $226,307.71 | $301,743.61 |
| Gadling | 461 | 1.04% | $260,299.03 | $312,358.84 | $416,478.45 |
| hack a day | 1,906 | 4.30% | $1,076,203.81 | $1,291,444.57 | $1,721,926.10 |
| HD Beat | 206 | 0.47% | $116,315.84 | $139,579.00 | $186,105.34 |
| Joystiq | 1,740 | 3.93% | $982,473.57 | $1,178,968.29 | $1,571,957.72 |
| Luxist | 430 | 0.97% | $242,795.19 | $291,354.23 | $388,472.31 |
| PVR Wire | 233 | 0.53% | $131,561.12 | $157,873.34 | $210,497.79 |
| Slashfood | 288 | 0.65% | $162,616.32 | $195,139.58 | $260,186.11 |
| TUAW (Apple) | 1,853 | 4.19% | $1,046,277.89 | $1,255,533.47 | $1,674,044.63 |
| TV Squad | 1,090 | 2.46% | $615,457.58 | $738,549.10 | $984,732.13 |
| Technology | |||||
| CSS Insider | 147 | 0.33% | $83,002.08 | $99,602.49 | $132,803.32 |
| Digital Photography | 301 | 0.68% | $169,956.64 | $203,947.96 | $271,930.62 |
| FlashInsider | 224 | 0.51% | $126,479.36 | $151,775.23 | $202,366.97 |
| Google(Unofficial) | 526 | 1.19% | $297,000.63 | $356,400.76 | $475,201.01 |
| JavaScript | 119 | 0.27% | $67,192.16 | $80,630.59 | $107,507.45 |
| Microsoft(Unofficial) | 263 | 0.59% | $148,500.32 | $178,200.38 | $237,600.51 |
| Office | 271 | 0.61% | $153,017.44 | $183,620.92 | $244,827.90 |
| OpenSource | 244 | 0.55% | $137,772.16 | $165,326.59 | $220,435.45 |
| Peer-to-Peer | 336 | 0.76% | $189,719.04 | $227,662.84 | $303,550.46 |
| Photoshop(Unofficial) | 265 | 0.60% | $149,629.60 | $179,555.52 | $239,407.35 |
| RSS | 339 | 0.77% | $191,412.96 | $229,695.55 | $306,260.73 |
| SAS(Unofficial) | 211 | 0.48% | $119,139.04 | $142,966.84 | $190,622.46 |
| SearchEngine Marketing | 123 | 0.28% | $69,450.72 | $83,340.86 | $111,121.15 |
| Social Software | 548 | 1.24% | $309,422.71 | $371,307.25 | $495,076.34 |
| Spam | 121 | 0.27% | $68,321.44 | $81,985.73 | $109,314.30 |
| TabletPCs | 287 | 0.65% | $162,051.68 | $194,462.01 | $259,282.68 |
| VoIP | 257 | 0.58% | $145,112.48 | $174,134.97 | $232,179.96 |
| Yahoo(Unofficial) | 326 | 0.74% | $184,072.64 | $220,887.16 | $294,516.22 |
| Wireless | |||||
| BBHub(BlackBerry) | 156 | 0.35% | $88,083.84 | $105,700.61 | $140,934.14 |
| Bluetooth | 246 | 0.56% | $138,901.44 | $166,681.72 | $222,242.30 |
| Engadget:Cellphones | 226 | 0.51% | $127,608.64 | $153,130.36 | $204,173.82 |
| Engadget:GPS | 222 | 0.50% | $125,350.08 | $150,420.09 | $200,560.12 |
| RFID | 237 | 0.54% | $133,819.68 | $160,583.61 | $214,111.48 |
| UltraWideband | 218 | 0.49% | $123,091.52 | $147,709.82 | $196,946.43 |
| WiFi | 116 | 0.26% | $65,498.24 | $78,597.89 | $104,797.18 |
| TheWiMAX Weblog | 217 | 0.49% | $122,526.88 | $147,032.25 | $196,043.00 |
| Engadget:Wireless | 235 | 0.53% | $132,690.40 | $159,228.48 | $212,304.63 |
| Wireless Dev | 233 | 0.53% | $131,561.12 | $157,873.34 | $210,497.79 |
| Wireless | 310 | 0.70% | $175,038.40 | $210,046.07 | $280,061.43 |
| Video Games | |||||
| Blogging E3 | 1 | 0.00% | $564.64 | $677.57 | $903.42 |
| Engadget: Gaming | 255 | 0.58% | $143,983.20 | $172,779.84 | $230,373.11 |
| Playstation 3 | 117 | 0.26% | $66,062.88 | $79,275.45 | $105,700.61 |
| Video Games | 219 | 0.49% | $123,656.16 | $148,387.39 | $197,849.85 |
| Xbox 2 | 232 | 0.52% | $130,996.48 | $157,195.77 | $209,594.36 |
| Media and Entertainment | |||||
| Design | 215 | 0.49% | $121,397.60 | $145,677.12 | $194,236.16 |
| Digital Music | 306 | 0.69% | $172,779.84 | $207,335.80 | $276,447.74 |
| Droxy (Digital Radio) | 220 | 0.50% | $124,220.80 | $149,064.96 | $198,753.27 |
| DV Guru (Digital Video) | 147 | 0.33% | $83,002.08 | $99,602.49 | $132,803.32 |
| Magazine Design | 237 | 0.54% | $133,819.68 | $160,583.61 | $214,111.48 |
| Nanopublishing | 243 | 0.55% | $137,207.52 | $164,649.02 | $219,532.03 |
| Business | |||||
| Enron Blog | 188 | 0.42% | $106,152.32 | $127,382.78 | $169,843.71 |
| The Mortgages Weblog | 192 | 0.43% | $108,410.88 | $130,093.05 | $173,457.40 |
| Outsource Reporter | 62 | 0.14% | $35,007.68 | $42,009.21 | $56,012.29 |
| SCM Wire (supply chain) | 201 | 0.45% | $113,492.64 | $136,191.16 | $181,588.22 |
| Life Sciences | |||||
| The Cancer Blog | 229 | 0.52% | $129,302.56 | $155,163.07 | $206,884.09 |
| The Cardio Blog | 186 | 0.42% | $105,023.04 | $126,027.64 | $168,036.86 |
| The Diabetes Blog | 106 | 0.24% | $59,851.84 | $71,822.21 | $95,762.94 |
| Medical Informatics Insider | 139 | 0.31% | $78,484.96 | $94,181.95 | $125,575.93 |
| Telemedicine Insider | 137 | 0.31% | $77,355.68 | $92,826.81 | $123,769.08 |
| Personal | |||||
| Brian Alvey | 278 | 0.63% | $156,969.92 | $188,363.90 | $251,151.87 |
| Jason Calacanis | 1,145 | 2.59% | $646,512.78 | $775,815.34 | $1,034,420.45 |
| Blog Maverick | 1,917 | 4.33% | $1,082,414.85 | $1,298,897.82 | $1,731,863.76 |
| Gordon Gould | 169 | 0.38% | $95,424.16 | $114,508.99 | $152,678.65 |
| Judith Meskill | 211 | 0.48% | $119,139.04 | $142,966.84 | $190,622.46 |
| Events | |||||
| Blogging BlogHer | 124 | 0.28% | $70,015.36 | $84,018.43 | $112,024.57 |
| Blogging DEMO | 166 | 0.37% | $93,730.24 | $112,476.29 | $149,968.38 |
| Blogging ETech | 186 | 0.42% | $105,023.04 | $126,027.64 | $168,036.86 |
| Blogging Gnomedex | 189 | 0.43% | $106,716.96 | $128,060.35 | $170,747.13 |
| Future of Music | 79 | 0.18% | $44,606.56 | $53,527.87 | $71,370.49 |
| Blogging Milken | 211 | 0.48% | $119,139.04 | $142,966.84 | $190,622.46 |
| Blogging Sundance | 128 | 0.29% | $72,273.92 | $86,728.70 | $115,638.27 |
| Blogging Web 2.0 | 76 | 0.17% | $42,912.64 | $51,495.17 | $68,660.22 |
| Live8 Insider | 184 | 0.42% | $103,893.76 | $124,672.51 | $166,230.01 |
| Other | |||||
| Weblogs,Inc. | 9 | 0.02% | $5,081.76 | $6,098.11 | $8,130.82 |
However, in order to get a cleaner picture, I started to dig into more details. First, I analyzed the different segment performance:
| Network segments | Technorati Sources | % of overall | Price at 25 million | Price at 30 million | Price at 40 million |
|---|---|---|---|---|---|
| Consumer | 28,248 | 63.80% | $15,949,950.31 | $19,139,940.37 | $25,519,920.50 |
| Technology | 4,908 | 11.09% | $2,771,253.05 | $3,325,503.66 | $4,434,004.88 |
| Wireless | 2,416 | 5.46% | $1,364,170.21 | $1,637,004.25 | $2,182,672.33 |
| Videogames | 824 | 1.86% | $465,263.35 | $558,316.02 | $744,421.36 |
| Media and Entertainment | 1,368 | 3.09% | $772,427.50 | $926,913.00 | $1,235,884.00 |
| Business | 643 | 1.45% | $363,063.51 | $435,676.21 | $580,901.62 |
| Life Science | 797 | 1.80% | $450,018.07 | $540,021.68 | $720,028.91 |
| Personal | 3,720 | 8.40% | $2,100,460.75 | $2,520,552.90 | $3,360,737.19 |
| Events | 1,343 | 3.03% | $758,311.50 | $909,973.80 | $1,213,298.40 |
| Other | 9 | 0.02% | $5,081.76 | $6,098.11 | $8,130.82 |
| Whole Network | 44,276 | 100.00% | $25,000,000.00 | $30,000,000.00 | $40,000,000.00 |
What’s interesting here is that the consumer segment is responsible for the majority of linkage so I dug in much further. What I found is that the sum of the EnGadget linkage represents over a third of the overall network traffic (the actual number is 15,529 links for a 35.07% share of the network).
Data for the rest of us?
In acquiring Weblogs Inc., AOL has now provided us with some numbers traditional media are willing to pay for a blog. Looking at the numbers above, one can try to guess at the value of a link from an external site. a single link on the weblogsinc network represents 0.002258559942180087 percent of the overall network.
At the different rumored price points from AOL, it looks as follows:
| Link | $25 million value | 30 million value | 40 million value |
|---|---|---|---|
| 1 | $564.64 | $677.57 | $903.42 |
I don’t know if those values are based on any real rationale but it’s nice to dream up the value of one’s blog based on this.
Should we now assume that traditional media companies are willing to pay between $500 and $1000 per site that links into a blog?
Not quite. The incremental value is in the size of the network and the underlying tools. Jason and Brian have been working on developing a blog authoring technology, called BlogSmith, that sits at the core of their network and one has to believe that AOL saw some value in the software too. However, one can easily say that blog valuations are going to be easier to make after this deal since it provides the first yardstick in that space.