I once said that blogging is no venture. It seems I have been proven wrong once again, as AOL bought Weblogs, Inc. for a purported $25 million. Granted, Weblogs, Inc. is a bit more than just blogging – it is a network of blogs that drives ad revenue. I won’t back down – I was wrong….maybe.
Note that AOL may have paid a “bubble” price considering all the hype around blogging. The network drew in ad revenue that was supposedly in the tens of thousands of dollars per month. And then there are all the underpaid bloggers that made the Weblogs, Inc. network churn out the content in the first place. Will they continue on their $500 per month track? I doubt it. A more likely scenario is they extort bigger bucks from AOL or just set off on their own.
So, you have an asset churning minor cash flow, using an un-naturally low cost infrastructure that builds all your value, and has legs with which to walk out the door. This thing will no doubt need some work to justify the price.
Congrats to Jason Calcanis and Co. – to AOL, well good luck!