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Newspapers? Dying? Television? Might as well die too. New media? That's where future empires will be built.

At least that's what some have been claiming since blogging and 'new media' became a mainstream phenomenon. And to be sure, new media's future does look bright. But is it as bright as many had predicted? Perhaps not.

The latest evidence of that: TechCrunch's sale to AOL for a reported $25m to $60m. Most reports pin the price at or closer to the lower number, and while I'm sure TechCrunch founder Michael Arrington is quite happy with the outcome, the price is relatively low.

According to Inc. Magazine, TechCruch is generating $10m in revenue annually. At the low end, AOL's reported acquisition price doesn't seem to represent the type of multiple one might expect for a company that's about to take over the media world. Back in 2007, arguments were made that TechCrunch could be worth a lot more than AOL has reportedly paid, and Arrington himself seemed to have plans for an empire worth well into the nine-figure range:

Already, he's laying the groundwork for a whole stable of clued-in, hard-driving news blogs: MusicCrunch, SoftwareCrunch, TelecomCrunch. "The goal is to have 15 to 20 sites 18 months from now," he says . He plans to hire popular bloggers and create a home­page with the best news from each site to draw readers. From there, they could drill into each topic in more depth. His aim is to become the premier technology news site on the Internet, one that goes head-to-head with CNET and potentially with other technology news sites, including Wired.com. Arrington figures he can get by with just a few dozen employees. "With 25 to 30 paid writers against CNET's huge cost base, they won't be able to compete," he says.

This plan for empire, of course, never came to fruition. CNET, which was purchased by CBS in 2008 for $1.8bn, is still alive and kicking.

We'll likely never know why Arrington never executed on his ambitions, but what we do know: building the type of empire he envisioned looks to be tough work. Which may be why he sold one of the world's most popular tech blogs for an amount in the range paid for other popular blogs and blog networks over the years. paidContent, for instance, was acquired back in 2008 by the Guardian Media Group. Acquisition price: $30m. Which isn't much more than the $25m AOL paid for Weblogs Inc. three years earlier in 2005. Other notable blog acquisitions have typically been seven and low eight-figure affairs. Notice a pattern?

So what does this all mean? Is it possible that the bloggers who have sold out have sold too soon? Or were dreams of new media empires just that -- dreams? Pete Cashmore, the founder of TechCrunch competitor, Mashable, is betting on the former. His blog has been linked to AOL acquisition rumors, but he seems focused on an independent future. Following the announcement of the TechCrunch acquisition, he published a post on his personal blog entitled "Swinging for the Fences", in which he wrote:

That’s how I feel about the market, too. Lots of empty seats. Limitless untapped potential. We’re large by the standards of a blog. But by mainstream media standards? Tiny. It’s a gap we plan to close — and do so under our own steam.

Who’s left to swing for the fences?  Who’s going to achieve the escape velocity required to reach beyond our insular technology community and build a truly mainstream publication?

We’re not tired in the slightest.  We have the youthful naivety to believe we can go mainstream — and the stamina to achieve it.

Youthful naivety? Perhaps. Certainly the M&A activity in the blogosphere over the past five years hints that the next Rupert Murdoch won't earn his first fortune with a blog. But if we're going to ever learn whether or not new media has the stuff it takes to build empires, it needs a little youthful naivety.

Patricio Robles

Published 1 October, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2381 more posts from this author

Comments (5)

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Jamie Riddell

As a private deal we don't know the terms - it could be the low end of the spectrum with it all stacked on the earn out. Or it could be that the $10m revenue figure was 'massaged' ? 

We are also in the midst of the world's global recession since... so it is a buyers market, not quite a comparison with the other deals :-) 

almost 6 years ago

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Andy Xhignesse

Hi Patricio, and thank you for this perspective. While the sale price may not be what might have been expected from the giddy days prior to the current tougher economic conditions, still not a bad days work, he'll probably be able to get by. More importantly, the question of where new media is headed... I can't help but feel that we are still in the infancy stage of web communications, OK, maybe I'll allow for toddler afterall there is certainly some walking being done or at least some steps taken...shaky uncertain ones resulting in a lot of crashing around. What will it be like when we progress to childhood, pre-teen and teenage maturity levels? (and beyond) If only I knew. One thing I will offer, those well positioned today, and steady on their feet are incredibly well positioned for what lies ahead. Will it result in "sport star" status and incredible money? I know this may sound naive, but I  really hope, for all of us, that that is not the sole motivation.

almost 6 years ago

Simon Gornick

Simon Gornick, Owner at Moovd LLC

The concept of "empire building" in the internet is a classic symptom of its boosterist megalomania. The internet is a swirling, self-reinforcing world of new fangled technology fused with old fashioned hucksterism. I'd expect nothing less from these guys.

almost 6 years ago

Rayyan Agha

Rayyan Agha, Founder at CloudGreen

What of the third world, especially the Middle East, and how will this paradigm shift effect it, if it were to ever become? We're all aware that the Middle East holds the biggest bag of money, purchasing power and wants to spend. Television and newspapers still rank no.1 respectively and the accumulative reading rate for the Middle East (since it's a direct factor for blogs, wherein you need to read) is a mere 67 pages a year! Versus 11-12 books for the EU and 6-7 for Americans. Just wondering if these gobbling up of blogs have these big bags of money in hindsight and if not, when saturation occurs, how do they diversify into these markets or will it be too late??

almost 6 years ago

Avatar-blank-50x50

buyer beware

http://www.guardian.co.uk/media/2010/jan/14/guardian-news-and-media-paidcontent Why have you used such an incorrect figure for the Guardian's purchase of contentnow? Is it because when you write you set out to prove a point and not to inform people with facts and allow them to form their own opinion? Are you closer to PR which is paid to influence than journalism which is paid to inform?

almost 6 years ago

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