Congrats to Reddit, Techcrunch and PaidContent.

Reddit was bought today,  the company has 3.5 employes  70k uniques per day and 700k pageviews per day.    Well done guys,  nice to see small companies making a difference.  They built up a big site on less then 100k,  and didn’t try to monetize it.  That takes skill to keep operational and costs low.

I think with all the hype out there, there are 2 other small companies that are often over looked but some of the most successful.

1.  Techrunch was a site that Michael Arrington started over a year and a half ago.  He was reviewing web 2.0 companies and the site spread like wildfire.  Last I heard techcrunch was generating $60,000 a month in revenues.   In the last year Michael branched out and started throwing parties and doing events/conferences and building a blog network which generate even more money.  I find it fasicinating  because he wasn’t the first person to try it,  but he just created a run away success that blew everyone else away.  I suspect much of that has to do with  Michael also taking advantageof opportunities far more then anyone else.  For instance before techcrunch no other review site tried to dominate the field by establishing themselves via conferences  or hold parties  etc. 

2.  Rafat Ali created paidcontent a few years ago.  He was one of the first people to create a blog and he more then makes a living from it.   In the last year he has started expanding it by branching out into mobile and now redesigning his site and hiring more people.    Paidcontent was the inspiration for Jason Calacanis to create his blog network which was sold for a estimated 25 million to AOL this time last year.

**Update**

Mr. Arrington declines to divulge his net worth but says TechCrunch brings in about $120,000 in revenue a month, mostly from ads, sponsorships and an online job-posting service.”

http://online.wsj.com/public/article/SB116244521605611149-xEEW_Dh1mMLLs0dtYRdw492SQYE_20061109.html?mod=blogs

6 Responses to “Congrats to Reddit, Techcrunch and PaidContent.”

  1. John Says:

    Markus,

    I really enjoy reading your blog. I came across an interesting NY Times article on IAC. They are a giant company that seems like they’re making some interesting buys and taking a unique route to compete with the even bigger players: http://www.nytimes.com/2006/10/31/business/media/31jackson.html?_r=2&oref=slogin&oref=slogin

  2. M. Says:

    Any indication at all of how much Reddit sold for? How do you value a company if they have no revenues at all?

  3. Mike Says:

    I often wonder that myself, how does one go about valuing a company with no revenue?

    Though, didn’t Reddit license it’s tech out (to none other than Wired’s parent company no less for their celebrity gossip network). I’ve also heard several whispers saying the purchase price was between 45-60 million, but, again, those are un-substantiated rumours so I’m not putting too much stock into them.

  4. M. Says:

    Mike: How could a website with 700k pv’s a day ever be worth that kind of money? That’s 21 million page views a month. Let’s say that’s 21,000 impressions times a really low CPM of $1 = $21k per month, and if $5 then $105k per month.

    Revenue would be $250k to $1,260 – bandwidth costs, and the salaries of 4 employees. Good money on the high end, just getting by on the low end after salaries and bandwidth and taxes and so on.

    Even a 5x valuation on the high end (5 x $1.2m a year) would put them at a $5m or so valuation. Even if they really pushed it, you’re looking at maybe $10 million, max? (For example, some marina’s in Florida are going that high (10x valuation) right now – but thats’ because its a physical business, history of revenue + lack of future development opportunities.) Even so I’d LOVE to hear the logic behind that.

    Who knows, though, what crazy logic people are using to invest in these sites? For example, the 10x valuation might make sense if Conde Nast feels they can bring in an overwhelming amount of traffic and advertising to the site, thereby propelling the site to much higher PV’s, and getting a better CPM. It’s still a risk, but you never know.

  5. M. Says:

    Mike’s really upped his revenue streams with the added sponsorship spots, etc. Impressive numbers.

  6. Listing UK Says:

    Your site is a much needed addition to my life. THANK YOU!

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