Paul,

Guy Kawasaki reached a similar conclusion as you after his first year in blogging.

Something we're working on is a way for people like bloggers, who frequently link to other Web sites, to make money by inserting a subtle text ad at the top of another Web site.

For example, the following is Guy's breakdown of how much he made his first year in blogging:
http://smspal.us/mmrp

- Joe

I think it's primarily because most blogs are too dependent on the owner. This blog is all Kedrosky. If you sell out why should people keep reading? I don't think this is true of all blogs though. If you created a turn key operation, run by paid writers and editors that a new owner could takeover without any visible changes, I think there is a market for that, especially in a lucrative niche.

Joe -- Yeah, this was not a recent realization.

John -- Agreed, part of the problem is the single voice, which is good and bad. People know what they're getting, but when they don't get it they're often unhappy.

Paul you seem like a big believer in Free Markets, why don't you auction yourself! I'll start the bidding....1 dollah...or .64 Euros...

check out the disclaimer to FAKEPAYCHECKSTUBS.com .......extremely funny!!!

I'd use the consulting-firm analogy. You've essentially built a one-man-shop, with a service that scales or disappears with your time. Even if you're growing, you could get maybe 0.5x annual revs for that. Or maybe someone'll make you an offer to pay a salary, benefits, and remove your ad sales headaches but give you zero for the blog itself.

Consulting firms become acquirable when they scale their staff (billing & projects) or when they productize their knowledge (which is better for the multiple).

OTOH, lots of business success is a function of a given leader, and many are acquired at a premium simply to get the leader. But the asset is the company and it's products. So when you built a media company rather than a blog, then you'll have something acquirable. Arrington and Om and HuffPo are heading that direction. But they're still small shops.

Reality 101. Something is worth:

1. What someone is willing to pay.
2. The free cash flow the asset generates
3. The intangible/tangible benefits it brings to other assets under ownership. In most case this value is not transferable via #1 or #2.

Except for maybe 20 sites all blogs fall under #3.

Something is not worth what someone says it is unless they execute option #1, or to a lesser extent as we have all found out, lend you liquidity based on #2.

Paul, Saleem Khan sent me a Tweet on your post. A lot of blogs *do* get bought. Dozens, every day. However they have 3 key criteria:

1. Not a "voice"-driven blog (ie: they're topic-driven... people come for the topic, not the author)
2. They have "traffic that matters" (ie: at least 250-500K pages/month)
3. They have growth potential. Under-performing ads, SEO, dying content, etc.

Where your blog *would* have value (and you've seen these types of deals already) is in ad repping. Where companies (like us) pick up your blog exclusively (or not) for 1-3 years. You keep writing, you make more than you're making now, you get more traffic, etc.

The delta between the value of an ad rep'd blog (extra inventory, everyone wins) and a purchase (same inventory, more revenue, all risk on purchaser) is pretty significant.

Which is why the 3 rules above are close to gospel. That said, if you *do* want to sell, ping me and I can walk you through specific options - since we have models we use internally to assess value.

Also, as a note, we buy between 5-20 blogs per month, so there is a lot of action in the space.

A couple of thoughts: there's plenty of blogs that are being bought, especially by larger media companies, but not at prices that garner much attention. A few examples that I know about -- and clearly there's more: True Hoops bought by ESPN earlier this year, TVshowsonDVD and a couple of other entertainment-related sites bought by TV Guide.

As for the three rules, you see them broken all the time, especially when you look at the line item for "goodwill" in SEC filings as much as I do.

Monetize the heck out of your blog, following the steps shown by JohnChow.com . (That's not me; I just give the URL above for the sake of ease.) Then you won't need to be bought; just keep writing and earning. :-)

Couple comments... first, blogs don't have to be dependent on ads. For example, I use my site to sell services (and soon products) and don't run ads at all. I make far more money doing this than I could with ads.

A blog that requires 5-10 updates a day is just not a good purchase because it's so dependent on the owner and on constant work... there's no leverage so hard to really sell it for much of anything or even find a buyer.

A blog that is only occasionally updated, promotes a specific product/service, and has self-sustaining traffic is a much wiser purchase even if the revenue scale is smaller.

Don't feel bad. It's not that your blog is worthless: it's just worth less.

to some extent this is like the early days of software after the courts forced IBM to allow an independent software industry to emerge in the last 60s .But look at the glorious track record of software entrepreneurs it has spawned since. Something similar is starting in publishing...we are the new wave of entrepreneurs.

where I disagree with Jeff is instead of acquiring just hire the blogger. Till the ratio of what older companies pay talent (content, engineering) compared to SG&A, not sure why you or Mike or Om would go to work for them. And if you did, probably leave in a couple of years and start something of your own again.