24/7 Wall St.

After 24/7 Wall St. published the Twenty-Five Most Valuable Blogs we decided to look at some niche content sites which compete with blogs and should have similar valuation data. One of these content sites is Politico.com which vies for readers with Huffington Post and Drudge. We put Huffington’s value at $70 million and Drudge at $10 million. Huffington’s value was posted at just under 10x revenue and we estimated that the company was slightly profitable.

Compete shows Politico with 1.4 million visitors in February. It is safe to assume that the number should rise though the November election but may fall-off sharply then. Alexa shows a slightly different story. It ranks the site No. 4,053 and shows an audience peak in early February, with some drop-off after that. Quantcast say the site has 1.1 million unique visitors.

Assuming that each visitor represents 2.5 pageviews, Politico would have 3.5 million pageviews a month. Advertising is modest including companies like The New York Times may be sold on a revenue-per-response basis. The site is probably not getting more than a $20 CPM on each page. That would yield an annual revenue run-rate of $840,000 with rapid growth likely over the next six months.

Politico shows about 75 staff members on it masthead. Not all of those people are full-time, but it would not be surprising if half of them got full salaries and benefits. People costs could easily be $2.5 million if the average employee is getting $70,000 including all personnel load. The company clearly has other costs including rent, T&A, communications costs, and website support.

With likely losses, it is hard to give the site a multiple as large as Huffington. At seven times revenue, Politico is worth about $6 million.

Douglas A. McIntyre

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