categories

HOT TOPICS

Subscribe to our Feed

Deal Radar 2008: Seeking Alpha

Posted on Thursday, Mar 6th 2008

I covered Seeking Alpha a while back. It is a one-stop shop for financial news and analysis.

Founded in early 2004 by David Jackson, it focuses on opinions, analysis and portfolio management tips from contributors, many of whom are finance professionals, Hedge Fund managers and newsletter authors. The incentive for most contributors is the exposure, similar to TheStreet.com.

Seeking Alpha finds content from a variety of sites, including blogs and edits it to guarantee quality. The editors select the content with the readers, including money managers and individual investors in mind.

In turn, Seeking Alpha syndicates its content to Yahoo! Finance, Reuters, Marketwatch, and other financial sites.

According to Alexa Rankings, the three month average traffic rank for the site is 6,925. Acc. to Quantcast, the site gets over 535,000 unique visitors a month. Monthly page views are estimated to be in the 2.5-3 Million range.

The content of the site attracts more attention than any other financial blog. And in spite of the fact that blogs are difficult to monetize via ad revenues, Benchmark Capital invested an undisclosed amount in Seeking Alpha in September 2006. The amount is likely in the $2-4 Million range.

The jury is still out on whether it was a good investment on Benchmark’s part. All other venture firms who have invested in blogs (August Capital in TechCrunch, TrueVentures in GigaOm) are, at this point, in the same boat.

Unquestionably, Seeking Alpha offers value to its audience by bringing together a diverse range of opinions from the financial community. Generally, CPMs tend to be good for this audience. At scale, $25-$50 CPMs should be viable. [I asked David Jackson for feedback on his business, which he declined to discuss for the moment.]

In the best case, with a $50 CPM and 3 Million page views a month, we’re looking at a $150k monthly revenue stream, $1.8 Million annual. This, of course, assumes, that Seeking Alpha has been able to crack its Ad Sales challenge and can successfully sell its entire inventory at these premium prices. [I am simplifying a bit … in each page there are usually 3-4 ads, and not all of them can be sold at premium CPMs, so I am assuming $50 CPM per page, across all ads.]

Perhaps, reality is more challenging. Publishers are not having an easy time selling their inventory. Seeking Alpha, most likely, is getting more like a 50-70% sell-through on its inventory, which brings the revenue run rate down to, let’s say $1 Million annual.

Now comes the question of exit. Who is going to buy the company?

In my opinion, the best acquirer for Seeking Alpha would be Jim Cramer’s TheStreet.com [TSCM]. TheStreet.com is a $260 Million market cap company with 2007 revenue of $65 Million. Technology Crossover Ventures has recently invested $55 Million to fund acquisitions and diversify its portfolio of media assets, especially because the company has always been criticized for being too Cramer dependent. In fact, the company is currently in the midst of renegotiation of Cramer’s employment contract which expired at the end of 2007. Last year, it also acquired James Altucher’s Stockpickr.com.

Seeking Alpha would fit perfectly into that portfolio and provide complete diversification, since it has 300+ authors (including me), and no one author rules. The audiences are also perfectly synergistic.

As for the valuation, what is TheStreet.com likely to pay for a $1-2 Million a year revenue run rate company? Probably $5-$10 Million.

At any rate, Seeking Alpha is on my Deal Radar this year as a potential acquisition target in the financial media space. As for what is the destiny of the other venture funded blogs, we will discuss that later this month.

This segment is a part in the series : Deal Radar 2008


. MyStrands is MyChoice
. Kayak Consolidates Travel
. Trulia Can Consolidate Real Estate
. Girls Like Stardoll
. LinkedIn Should Roll-Up Jobs
. Zillow
. TheFind
. Wize Ranks Products
. Retrevo
. Piczo Picture Perfect
. Xanga Losing Steam?
. hi5 Going Strong
. Bill Me Later - Blessed by Amazon
. Takkle Tackling Socially
. Amie Street and the Twenty First Century Renaissance
. eHarmony Replacing Yenta
. Zappos Wants to be Amazon When it Grows Up
. Figleaves and Specialty e-Tail
. Twitter Gaining Momentum
. Tagged In Exit Freeze Danger Zone?
. Digg - Packaging news
. Facebook Woes Coming?
. PlayFirst Plays Casual Games Well
. Kosmix+Adify - Potential Google Challenger
. Travel Ad Network Executing Flawlessly
. Adap.tv Trying to Tackle the Video Ad Problem
. Groople, Interesting Use of Context
. Lucidera
. InsideView's Clever Maneuvering
. Seeking Alpha
. Adify's Market Taking Time to Develop
. Glam Media's Fashion Forays
. Federated Media Needs to Focus
. GigaOM
. TechCrunch
. Yelp
. Slide
. Elance
. oDesk
. SKS Microfinance
. TutorVista
. Seventymm
. Cleartrip
. Yatra
. MakeMyTrip
. Intacct
. Genius
. Xactly
. Jigsaw
. Comcast Buys Plaxo
. Encover
. PayCycle
. Bill.com
. Daptiv
. Inform
. PayScale
. Joost
. VideoEgg
. Mercado
. AKQA
. YuMe
. BitTorrent
. Geni
. Blurb
. Mimosa Systems
. Metaweb
. Brightcove
. Revver
. Cake Financial
. Mint
. Powerset
. UpTake
. PaidContent
. Mixpo
. Biz360
. Sabrix
. Coremetrics
. Revision3
. Care.com
. Appirio
. Metacafe
. Pandora
. Hulu
. Fabrik
. Flock
. Wetpaint
. ID Analytics
. Ning
. Telanetix
. Dimdim
. ON24
. Veodia
. Jive Software
. Realtime Worlds
. GirlSense
. LifeSize
. Grockit
. Playfish
. Nurien
. NTR Global
. AmberPoint
. Trion World Network
. PrimeSense
. Verticals onDemand
. Gaia Interactive
. PubMatic
. Mahalo
. Akoha
. Sportgenic
. IVT
. Turbine
. ImageSpan
. Entrepreneur Journeys
. Aggregate Knowledge
. Fliqz
. Elastra
. Challenge Games
. PivotLink
. iForem
. TopTenREVIEWS.com
. Operational Memory LLC,Raleigh, North Calorina
. FeedRoom
. GameDuell
. Fotolia
. EchoSign
. Mevio
. Local Marketers
. Baynote
. BlogHer
. Passenger
. Mobixell
. Wigix
. ExpertCEO
. Zyrion
. Archer Technologies
. SunRun
. NewsGator
. PermissionTV
. Creative Water Solutions
. Carbonetworks
. WiZiQ
. Regent , Frederick,Marryland
. ClickCare
. Studywiz Spark
. Saki Seat
. ShiftWise
. Neulio
. Revolabs

Hacker News
() Comments

Featured Videos

Comments

hey
awesome blog well mentained i liked and nice post it thought me a lot
with regards
edgar dantas
http://www.gadgetworld.co.in

Edgar dantas Thursday, March 6, 2008 at 4:04 AM PT

$50 CPM? Are you insane?

Big jesus Sunday, March 9, 2008 at 7:02 PM PT

It’s not exactly $50 CPM. She wrote $50 max per page and average(3,4)*average(50%,70%). Cherry picking the extremes (50% sell, 4 ads/page), that’s $6 per ad.

Frankly, I’ve seen very few ads on seekingalpha. Perhaps my browser filters them out, or I go to a section of the site (transcripts) w/ few ads.

joe byrne Monday, March 10, 2008 at 12:10 PM PT

That’s right. All small publishers on the web today have monetization problems via advertising. Those who have other monetization models (consulting, venture capital, books, etc.) have better business cases.

However, I do believe that over the next 12-18 months, this will change, and small publishers should have a more mature eco-system of vertical ad networks to collaborate with.

Sramana Mitra Monday, March 10, 2008 at 12:16 PM PT

I got the ballpark 15 mil PV / month and eCPM of $25 total from someone in the ad business, whom I think should know. I have a natural distrust of outside estimates for PV, simply because it can’t be done accurately. The only way to know for sure is to install the tracking code or examine the server logs.

Go to the base page, you’ll see seven ad blocks. Each article page has either seven, or eight, ad blocks, depending on whether the author is selling a book or course or whatnot. The transcripts page has seven ads, if you don’t see them, it’s a browser or observational issue.

Interesting that you think it’s worth 4xsales, same as TSCM is valued today. I would think that SA might be worth a higher multiple, because I believe TSCM might actually pay their writers …

Bill aka NO DooDahs! Sunday, March 16, 2008 at 12:22 PM PT

[…] post on a possible Seeking Alpha acquisition. This particular dude’s speculation was that the price would be around 4x revenues, roughly […]

Bill Rempel, a.k.a. NO DooDahs! » More on the Business of Blogging Wednesday, March 19, 2008 at 4:44 PM PT

Do you think there will be a contributor ‘boycott’ of content come a buyout of SA? As a current provider of content, I choose to do so more out of lotalty to David Jackson than dreams of wealth or publicity. [David helped me to get publicity in the early days–when i really needed the exposure.

As you yourself postulated, SA is not exactly a cash cow. ergo, I’m not concerned with revenue sharing–FOR NOW.

Come any buyout–or real talk of such–10Q Detective will choose to hit the road.

Cheers!
David J Phillips, Publisher
http://www.10qdetective.blogspot.com

David J Phillips Monday, March 24, 2008 at 6:17 PM PT

David,

I think banking on “free” content is a humongous vulnerability for Seeking Alpha. Yes, a “contributor boycott” as you call it, may very well happen.

Sramana

Sramana Mitra Monday, March 24, 2008 at 7:47 PM PT

[…] First, in the blogosphere, online media, old and new media, advertising – big changes have taken place. Here is a set of posts from the Deal Radar series that might help you make sense of these developments where I discuss companies that have driven some of the biggest changes: Techcrunch, GigaOm, Federated Media, Glam Media, Adify, Travel Ad Network, and Seeking Alpha. […]

Catching Up On Some Reading - Sramana Mitra on Strategy Tuesday, March 25, 2008 at 9:40 AM PT

[…] the biggest changes: Techcrunch, GigaOm, Federated Media, Glam Media, Adify, Travel Ad Network, and Seeking Alpha. On another front, I seem to have hit a beehive with my slingshot by writing the Death of Indian […]

Catching Up On Some Reading | Indian Startups In News Thursday, April 17, 2008 at 1:34 PM PT

I think Seeking Alpha is at a turning point. Sure, they can go and raise more money from some VC and raise salaries and enjoy life, but one of three things will happen:
1. They will find an AOL-sucker like, saving them and pay ridiculous valuation with no justification (it’s just a blog! that’s it!) – these things happen.
2. They will keep doing whatever it is that they’re doing, maybe profit a bit, raise salaries, enjoy life and end up in a LP meeting with the VCs saying “the company didn’t execute on the plan…”
3. Do something really risky with their model, and fail…

I think it was a very bad decision for Benchmark to invest… but hey – what do I know?

Jane Tuesday, May 13, 2008 at 12:51 AM PT