Blog valuations are increasing. What does this mean? That if you sell a blog in 2024, it’s worth more than that same blog would have been in 2015. I expect this trend will continue. Let me explain what this means, and why it’s important for anyone who’s interested in making money over the course of the next decade.
When investing in stocks, a lot of people like to focus on the price-earnings ratio of a company. This is exactly what it sounds like. You take the share price of the company and divide it by the earnings per share (total profits/total number of shares). There are different ways of calculating PE ratios, but in general, this is pretty much it. It’s a number that allows investors to know how optimistic other investors are about a company. High PE ratio companies sell for more money. Why would you pay a lot of money for a company that you think is going to go under soon?
For a long time, it was hard to get a lot of money in exchange for a website. I remember reading up on it and finding figures as low as six months’ revenue. It didn’t seem worthwhile to me to spend multiple years building something with such little relative value. But that was years ago, almost a decade to be specific. I did some digging recently, and things are much different. I saw listings like this.
That’s right. There are blogs selling for 3x multiples now. This is 6 times as much as when I was a kid! Why is this important and what does it mean for your work and career?
1. The average blog isn’t making much money
This is a three year old site, likely with a lot of pages, and it’s only making $500-$600 per month. And yet, the owner wants more than $18,000 for the web property. This means that the revenue is steady enough, that he expects a buyer to be able to keep the site for three years from when they buy it (or at least, that is what has traditionally been the case). So as you can see, it takes a decent amount of effort to make any money at all, because the price-earnings ratio of blogs has gotten so high. Padding your net worth by $18,000 doesn’t even bring enough money to survive.
2. It takes lots of effort to start a blog
The site I screencapped earlier was probably a part-time project, but notice how it took three years to make less than a living wage. That’s because there are a lot of blogs out there, and the competition is stiff. From what I can tell, forget about making money until you have either more than 100 articles or are selling a product. Sure, it’s possible to go viral, but most of the websites I saw for sale had more than 1000 articles published, and they weren’t worth a whole lot. I’m not a guru and I’m not here to bullshit you. If you want to start a blog, it’s going to take work. The bottom half of blogs are likely not earning a single penny.
3. Once you have a solid blog, the traffic is pretty steady
The acquisition of any given blog may fail, but people seem to consistently be paying 3x for these sites. This means that as a general rule the traffic isn’t too volatile. People move through and engage with the internet in fairly predictable patterns, and once you’ve figured it out, you can get a solid amount of traffic.
4. AI will make it easier and easier to write good articles
AI isn’t good for doing much beyond the basics right now. The articles it writes aren’t fantastic, and the writers they’ve replaced weren’t doing much. I know I sound callous when I say that, but think about the sites which have gone out of business. They were all blogs that did basic work. So AI speeds up processes, but always requires an operator. This means that AI will increasingly make writing accessible to those who aren’t able to over time. This has already been felt in the increase in competition in the celebrity gossip space that caused those same blogs to shut down.
5. Blogs will (and already have) become an income supplement
Since blogs are worthwhile and everybody can write, we’re seeing a convergence between blogs and people’s businesses. This is especially noticeable in ecommerce, where sites like Shopify and Printful have blogs filled with industry-related articles. Individuals and service-oriented businesses will also have use for blogs. Tourist areas and bed-and-breakfast locations come to mind, as blog articles could inform potential customers about the area they would like to visit. Consultants and experts can always benefit from publishing industry related material. Blogs will always be superior marketing tools to newsletters as a result of the discoverability factor, so they’ll always be a way for people to cultivate their little audiences.
6. There will always be potential for small blogs
AI is the hot new thing right now. It’s only been three years since ChatGPT came out, and everybody is trying to capitalize. That being said, there will eventually come a point where all the trash flooding the internet will cease to “do it” for people, and the market will become less saturated. At that point, you’ll be competing on a global marketplace. This means you will have a steep uphill battle in creating what might be considered a “good” income in a first-world country. But once you get over the initial hump, you should be able to create about $2,000 per month for yourself, which is enough to get by in a lot of the world. You’re competing in a global marketplace. This is actually why the “digital nomad” dream died for so many Westerners. The rest of the world is too “poor” to suit their needs. So if you’re from a smaller country, want to start a side hustle, or want to be a digital nomad, you should start a blog. These things make steady money for years, and they require very little to start. If you write insightful content, you will eventually have a small audience.
Thanks for paying attention.
