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HuffPo Worth $200M? Em, More Like $2M

Comparing site to Salon's performance deflates the hype

By Nick McMaster,  Newser Staff

Posted Jan 5, 2009 1:41 PM CST

(Newser) – The Huffington Post stunned the media world when it scooped up $25 million last month from Oak Investment Partners for an undisclosed stake, but industry tongue-waggers who put the uberblog's value between $100 million and $200 million are full of it, writes Simon Dumenco in AdAge. To "anybody with basic math skills and a halfway-decent bullshit detector" this is all just dot-com overvaluation again, he writes—by his reckoning, HuffPo is worth about $2 million.

Dumenco’s $2 million figure comes from comparing HuffPo to Salon, a comparable website which IPO’d in 1999 at about $9 a share. The 2 million outstanding shares of Salon now cost 35 cents, giving Salon a market value of $700,000. HuffPo has almost four times the traffic of Salon, but less revenue, so Dumenco gives HuffPo roughly three times Salon’s value.

The Salon.com logo.
The Salon.com logo.   (Salon.com)
Arianna Huffington arrives at the premiere of Sweeney Todd: The Demon Barber of Fleet Street in Los Angeles on Wednesday, Dec. 5, 2007.
Arianna Huffington arrives at the premiere of "Sweeney Todd: The Demon Barber of Fleet Street" in Los Angeles on Wednesday, Dec. 5, 2007.   (AP Photo/ Matt Sayles)
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The media are slowly beginning to realize that just because some VC shelled out $1 million for a 1% stake of a start-up, that doesn't mean that the start-up is worth $100 million.
- Simon Dumenco

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