Hot of the heels of Puala’s list of blogger salaries comes the Millionaire Blogger Hall of Fame by Worldwide Success. The hall is a list of blogs that have a value of over one million dollars. World Wide Success based blog value at 15 times earnings.
To calculate the value of a blog, we assumed a price multiple similar to the way stocks are valued. The average price multiple of the S&P 500 stocks (also known as the Price / Earnings or PE ratio) is currently about 15. We will use this same PE ratio to valuate these blogs. You could argue that this value should be higher or lower. Some people might say that a blog should be valued at a higher PE because of its growth potential. Others may argue that it should be lower because a blog is not as liquid as an S&P 500 stock. We feel that for the purposes of this exercise a PE of 15 is a reasonable value.
Currently there are nine blogs in the hall. John Chow dot Com is ranked third. To make the hall of fame, your blog needs to make $66,667 a year because 15X that is $1 million. While it’s nice to think my blog is worth $2.1 million, the methodology for coming up with the value is completely flawed. While S&P 500 stocks may trade at 15X earnings, it’s 15X net earnings, not gross. To assume a blog’s gross and net income are the same is just plain wishful thinking.
Another problem is the value listed may not be for the Blog. Tyler Cruz is listed at $1.4 million because his estimated annual income is $93,184. However, that didn’t came from his blog. It came from his other sites. If Worldwide Success wishes to make a list of bloggers with million dollar blogs, then they should make sure the revenue comes from the blog and not something else.
If you think you have enough to get into the hall, give Worldwide Success shout and they’ll add you to the list. Even if you don’t have enough, they’ll add you to the “Millionaires in the Making” list.