What Ars Technica - Conde Means For TechCrunch, Blog Wars, et al

The exact amount Conde Nast paid for Ars Technica has yet to be reported (as far as we know), but most folks agree that it probably accounted for the bulk of the $25 million Conde paid for three sites: Ars Technica, WebMonkey, and HotWired. So let’s call the Ars valuation $15-$20 million, or in the neighbourhood of the $15 million Doug McIntyre estimated in 24/7 Wall Street’s “The 25 Most Valuable Blogs“).

What does this mean for the ongoing blog wars?

First, Ars Technica, TechCrunch, PaidContent, etc., are building real businesses that will continue to be seen as vital properties in the portfolios of traditional media companies. We suspect the rate of acquisition–and the valuations–for the top properties will continue to increase in the next few years. We’ve said before that we think that industry-leader TechCrunch will eventually sell for $100 million. Assuming Michael Arrington & Co. don’t blow it, we still believe that.

Second, the blog wars are only going to get more competitive. Now that Conde, et al, have validated this business, we suspect more capital and talent will flow into the sector. This will continue to transform the industry from one with low capital-requirements, part-time amateur writers, and almost accidental success to one that requires significant capital and full-time professionals.

Third, not all trees will grow to the sky. There will likely be, at most, 4-5 properties and brands in each sector that survive as stand-alone, sustainable businesses. (Recall that brief, happy period when folks were excited about the future prospects of Lycos, Infoseek, and Excite). The good news: More properties will be bought by larger players than will survive.

Fourth, there will likely be an increase in blog merger activity. TechCrunch’s Michael Arrington has already outlined his blog world-domination plan. If TechCrunch doesn’t do it, someone will.

So where does this leave SAI? Running as fast as we possibly can (thanks for reading!).

See Also: TechCrunch’s Michael Arrington Wants to Merge With Blogosphere, Kill CNET

Disclosure: PaidContent has reported that SAI is or has been in merger talks with TechCrunch.

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