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Wednesday, March 08, 2006

 

Monetizing Web 2.0?

The blog traffic-generation site BlogExplosion is up for sale. The founders/owners sent an e-mail to members announcing their intentions, and the link in the 'for sale' text above provides plenty of additional and substantial details of their business.

Two things jumped out at me immediately from their disclosures: a) they appear to generate a ton of traffic to and through their site; and b) they generate very little revenue. Gross revenue over the 17 months reported where $74,194,50 USD with an monthly average of $4364.38. Their best revenue month was in December, 2004 with $5872.50 USD.

I'm not a financial analyst, and I'm not going to second-guess what the founders should and should not have done with respect to the site and its services or content, but a gross revenue stream like this doesn't sustain a business very long, not to mention that their gross revenues have been trending downward since June, 2005. All of this from a site that claims 50,000 members, signs up 100-150 members per day, 1 million listings on Google, and an Alexa ranking of 4174?

What's sticking in my craw right now is this: despite the impressive site and traffic/hit numbers, the revenue issue more than suggests that there isn't a sustainable business here, and if there is, what am I missing? What could the founders (or a buyer) do differently to drive up revenues?

And that's a question that needs answers in lots of cases like this, because it won't be the last...



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