I wonder how accurate that page view count is. Seems extremely low given the number of visitors they have. Just 150 million page views cannot generate that much ad revenue. Maybe $100k-$200k/mo max even with a sweet heart deal from MS?
Seems kind of sad that they're digging (sigh) such a big hole. If they had kept things light originally they could have sold for $80 million and walked away with more themselves with much less risk of total failure.
Hiring a bunch of people, fancy office, tons of servers. Totally unnecessary. The site could be run with very few resources if they had made that a goal.
In world where the only potential money you could make from a startup is the company's actual income, a lot of things would be different.
They would have 2 routes. Your route: be a $200k p/m. The other is trying to find some other way of profiting from being popular. One that pays better then adsense.
Google does. People look at Google & say: Online advertising is a goldmine, anyone with eyeballs to sell is gonna make a mint. But Google is doing something different.
Eyeballs are worth money. Sure. But the going price for raw eyeballs (eg adsense) is pretty low. Google don't sell eyeballs (on search). Not in that way. They sell a processed eyeballs (eyeball soup?).
You could look at it like manufacturing. There's raw input (oar, coal, etc) that's sitting under someone's field. That go through a value chain from mining to processing to assembling to retail. The market decides where 'value' is created & compensates accourdingly. Sometimes, it's counter intuitive. For example, many manufactured goods that only have a small part (maybe 10%) of their value created in a factory. Retail usually gets a bigger chunk then you'd expect (often %50+). Here's an ipod.
A lot of value can be created between eyeballs & eyeball soup. Based on the success of many businesses that have adwords at the base of their processes, there's plenty more downstream.
They're not setting up as a dot-com, more like a news website. Yes it could be slimmer and run on rice and beans but to do so now would be seen as backing down and probably hurt their image in the eyes of potential investors.
I am surprised they haven't opened the door to premium members to allow the use of off site scripts etc. It would be additional revenue and a way to hook the power users further. If the fees were reasonable and included additional functionality then I can very easily see people using it and paying for it.
I don't think they're hopeless. The ideal for them is to be bought out. Google wasn't a good match I don't think. I think the best bet is an established news source, NYT, Chicago tribune, Murdoch, or somebody. They're not set to be a self sustaining business, the goal is to get juicy enough to be bought and paid for.
Kevin is more interested in Revision3 I think, so he's selling his shares to step back from it. Or maybe he's going to begin to give Pownce some much needs love and affection, who knows.
Seems kind of sad that they're digging (sigh) such a big hole. If they had kept things light originally they could have sold for $80 million and walked away with more themselves with much less risk of total failure.
Hiring a bunch of people, fancy office, tons of servers. Totally unnecessary. The site could be run with very few resources if they had made that a goal.