Most valuable blog on the internet?

By: ispeculatornew
Date posted: 09.21.2010 (5:00 am) | Write a Comment  (1 Comment)

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In the past I have written about how internet properties are similar to real estate properties from an investment perspective and received many comments and emails about it. The big thing of course is that few people know enough to invest in this market which has helped keep prices much lower than they will be in a few years.

I read a very interesting story in Inc magazine regarding TechCruch, one of the biggest and most valuable blogs on the internet. I highly recommend reading the article. Tech Crunch is now pulling in over $10 millions per year in revenues and those are rising very fast. If you compared this model to a more traditional magazine, you can imagine why “old media” is in so much trouble.

Not trying the “conglomerate” model

One thing that I admire about TechCrunch is that they have been able to stick to what they do best, the technology field. While it could be tempting to start different related websites or blogs related to tech stocks, to financing, etc, etc. TechCrunch has been more or less able to focus. That is also one of the big reasons why I do not like models like Yahoo, AOL or IAC Interactive. These companies have one successful blog which then becomes 5 good ones and one year later you are looking at 50 average blogs. The internet is so competitive that it becomes very difficult to compete with many average products and I personally think that is why a company like TechCrunch is a huge success.

Others like Facebook and Google have became involved in many different activities but they do seem to grow much more carefully.  Facebook launched a competitor to Foursquare in the “local” aspect of social but it was after months of preparation and careful thoughts. When I hear AOL’s plans to launch hundreds of new blogs this year alone, I don’t exactly get that same impression.

Isn’t it the most basic thing? Apple has very few products in its line but sells many more of them than other companies such as Dell which maintain hundreds of products. It’s so simple yet few companies actually follow through or even attempt to follow these principles.

Difficult to quantify

Of course, it is a challenge to quantify in numbers the “attitude” or “management qualities” of a company and that becomes something that I personally keep in the back of my mind at all times. How? AOL is a good example. Whenever I look for trades, I will look at AOL but I would rarely be one to go long on the company so I would be looking to see if I could short AOL against something else. It’s not impossible for me to go long on such a company but the odds are very low. Just take a look at the trades we’ve done this year and you will see that we have gone short 3 times on IAC Interactive, 1 time on AOL and 2 times on Yahoo. We did not go long on these names.

Of course, these names will have good and bad times but my bet is all else being equal, bad companies will under perform. A bad company can be seen through financial statements but also through the way a company is managed and how it gets its growth. Is a company like Tech Crunch growing as quickly? Not necessarily, but the revenue-cost structure is a lot easier to build on.

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1 Comment

  1. […] tax holidays [Darwin's Money], winning contests [A Gai Shan Life], having a blog as successful as TechCrunch [Intelligent Speculator], and getting promotions [Finance Your Life] (without actually working for […]

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