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.