honestly, I'm impressed its that high of a rev figure.

Hmm... if that figure is right, then technically [www.WatchMojo.com] generates multiples more of revenue than Mahalo does.

Mind you, we don't operate in search or directories but rather video content, but still... that seems VERY low for a site with 4M uniques or 8M in pageviews in the broad search space, which is supposedly the most monetizable form of content.

Then again, it's all about how developed their sales team - and spiel - is. I am sure with the right approach they can raise sales because the traffic is not UGC so more traffic does mean more revenue...

Of course, sales is not as big of a challenge as you know what: the real challenge is getting a good ROI on that $16M in funding at a $100M post-money... but I guess that's where Sequoia, News Corp. and the other investors will comes in handy.

That being said: Jason can probably find a way to make the numbers work...

"Jason can probably find a way to make the numbers work..."

No, he can't. Even though he's paying his employees minimum wage, he'll never be able to break the point where the ad revenues (or placement revenues) overcome the cost of keeping the site up to date. At some point, probably in the near future, Mahalo will become extremely stale, because guess what, some $35k/year writer isn't going to be constantly going back over all of the content they've created to make sure it's up to date.

It's a losing proposition, and frankly I'm not surprised that someone with roots in magazines isn't able to grasp the idea that search results need to be timely not just today, but a year from now.

For fuck's sake, Google made an April Fool's joke that they were going to be human powered search results. That should tell you something about the business plan Calacanis has come up with.

Do that many people click on ads???

Ahahahahahaha!!!! Ashley Alexandra Dupré makes more than on her music sales.

But I thought all his overworked employees were making tens of millions of dollars. How else could Jason command the slavish dedication which he expects of his reports? I must be missing something here, because I'm sure he isn't just ripping them off with some pie in the sky story!

OK, let's do a math lesson for the rookie Valleywag reporters. Gosh you guys are a green! First, Mahalo hasn't started selling advertising yet. I've always been clear we would do that at he end of this year. We're actually just starting a search for a sales director, so if you know anyone send them to jason at mahalo.com

Here is a fairly easy tool to figure out how much money a site is making. You can run this across any site, even Valleywag.

1. Low RPM $1-3 per thousand pages (no sales force, one ad slot)

2. Average RPM 3-6 per thousand pages (light sales, two ad slots)

3. High RPM 6-10 per thousand pages (good sales force, 2-3 ad sales units)

4. Very High RPM 10-15 per thousand pages (great sales force, good/great niche)

5. Insane absurd RPM: 15-25 per thousand pages (great sales force with strong niche like finance, autos, etc).

We're not even trying yet and you're in the ball part with our traffic of 8m pages.

If you assume that with Weblogs, Inc. we grew it from $4-5 to $20 you can take the same concept to a 10M page website:

$2 x 10m pages = $20k in revenue
$5 x 10m pages = $50k in revenue
$10 x 10m pages = $100k in revenue
$15 x 10m pages = $150k in revenue

If a site doubles in traffic every 3-6 months you basically are making $250-500k a month in a year or two. Most midsized startups spend $250-500k a month. If you can cover 20-50% of your "burn" in the second year you got a winner in most folks eyes and you keep going. If you can't cover 20% you need to change up your flow.

So, if your startup can get to 10-20m pages and $5-15 CPM chance are you're going to have a business.

Some sites have other issues, like a social sites (Facebook, digg) the folks whip through pages quick so the RPM might be .50 to $1, but they make up for it in volume (think email/IM/social sites will make .25 per thousand visitors in many cases).

Take Valleywag which might make $1-3 RPM (revenue per thousand pages) but not much more since you don't draw high-end advertisers because your content is not advertiser friendly like www.Engadget.com or www.Autoblog.com (which might do $10-20 on average).

Valleywag has 4m page views a month on average across the last four months. That means you're making:

4m x $1 RPM = $4,000
4m x $2 RPM = $8,000
4m x $3 RPM = $12,000

Denton is probably paying you guys about $2-3k each on average so the site is probably at break even with $6-9k a month in revenue and costs.

Anyway, if you want to have fun pull up a bunch of startups on Compete.com and we can run the numbers. I can tell fairly quickly the RPM just looking at the mix of ad units/advertisers since I've been doing this for a decade.

You may--or may not--get Taurus and Fondue photos today based on this non-happy Unicorn post. I haven't decided yet. :-)

@ClosingTag:

Yes its so hard to live on those slave wages Jason pays us! Now excuse me me while I try to find the keys to my Audi.

funny thread

@seanpercival: Pics or it didn't happen! nicholas@valleywag.com

this is insane - total crap, followed and topped only by jason's magic math up above...sounds like something right out of a 1999 vc presentation ("...and costs are linear, see? we never spend more, we just keep on growing revenue to millions per month!")

mahalo is hated by all researchers. period. the resources are absolute crap. sorry. you've got to shut that shit down and let those talented google searchers and cutters-and-pasters develop their careers.

message to mahalo researchers: if you stay too long, no reputable research organization will ever hire you. the skills are not transferable, the tasks are just too simple and mundane. there is no creativity involved. you are hitting a punch list off each day at work. if you care about your career, seriously consider moonlighting on "real" research projects that require the use of your brain, otherwise your next job will be in a call center (if they'll have you, because they can choose from otherwise well trained applicants)...

@seanpercival: I drive a Land Rover, what's your point?

Remove bogus rev figures, worthless banter, sales projections, platform speak, key hires, blah, blah, blah......and you have a worthless venture.

Sadly, most ventures are worthless.

The money train will be those ventures dealing with boring, unsexy products and services that solve big problems.....

Believe me, I've been to the mountain top :)

@JasonCalacanis:

"If you assume that with Weblogs, Inc. we grew it from $4-5 to $20 you can take the same concept to a 10M page website:"

Hey, dumbass, do you even realize why you grew that number? You had content that people wanted to look at that they couldn't get anywhere else. Mahalo has bad aggregation that's literally going to fall apart a year from now. What's the top exit page on the site? Oh right, the homepage.

Look at your Top Keywords Driving Traffic:

mahalo
big brother 9 spoilers
2 girls 1 cup
how to play guitar
halo 3 skulls

Are you kidding me? Go away. Just go away. I don't know if you're planning on pulling a fast one, Mark-Cuban-broadcast.com-style, on some site with deep pockets, but whatever exit you have planned is going to fail miserably, and like your miserable attempt at netscape.com, a year after you leave the buyers will realize what a big steaming pile they've bought, and will quietly shutter it and write off the loss. Congratulations on furthering the Internet.

@seanpercival: If you think a lease on an A4 is supposed to impress people, I have news for you, son.

Jesus Christ, people, it takes time to grow a business - particularly an online one that is actually PAYING its contributors. Five tons of rocket fuel to get about an inch off the ground.

@seanpercival: Wow, an Audi- the Volkswagen Acura.

#1: An A4 lease is $250 per month.

#2: I would love to see repeat traffic numbers for mahalo. My guess is .000000000000001% come back again on purpose.

#3: How on earth did JC get VC money for mahalo?

#4: [valleywack.blogspot.com] - Can't believe you didn't win the whole thing!

#5: Everyone is so tired of your anti seo talk when all you are doing is creating an seo'd directory of pages someone, somewhere, deemed important.

#6: This has got to be the biggest joke on the net.

lol @sean bragging about owning an Audi - that's nothing really to brag about

@Nicholas Carlson:

[www.flickr.com]

You guys really need to stop taking me so serious around here. Have the dbags in tech have one, big deal.

*half the dbags

@seanpercival: My good friend has a 2006 Audi.. and he's not even employed.

Secondly.. in mild defense of Jason in regards to the individual who said that the cost of acquiring content would always be above the revenue's from advertising.

Wikipedia.com is all I have to say.

Jason will eventually fire all (or most) of the content writers once the seed has been planted and the general population starts populating the pages... IF that happens.

Who knows... I like the structure of the results in Mahalo sometimes google can be overbearing when searching for particular things but I still think it has a LONG way to go before it succeeds.. if it succeeds.

Oh and as a journalist I kind of find it amusing that if there's no advertising to generate revenue how can you keep the article/headline as is? Or at least update it with the response from Calacanis? Who you'd have to know is obsessively on this site? And don't you have his email to ask him for a comment before putting up the post?

@Zoo:

That's my point. Wikipedia is (sort of) succeeding because it appeals to librarians with OCD [citation needed]. They'll edit pages until the Sun burns out, because holy crap, "we're working on an encyclopedia that's, like, important" [citation needed]. Mahalo has no such appeal.

Calacanis is doing nothing but swiping ideas from better, more established brands, trying to do some cheesy branding play, and selling out while the valuation is still above zero. Look at the history. Silicon Alley Reporter = bad Fast Company. Weblogs Inc = bad Conde Nast. Netscape = bad Digg. Mahalo = bad About.

Calacanis doesn't add any value. He's just good at shouting.

@JasonCalacanis: You say "Mahalo hasn't started selling advertising yet," and then: "We're actually just starting a search for a sales director." So when you're talking about a site with "no sales force, one ad slot" that earns $1-3 per thousand pageviews, you're referring to Mahalo, right? Quick, somebody tell me what "$1-3" multiplied against 8 million equates to.

@ClosingTag good post. Got to give him credit for flipping Weblogs though. He obnoxious.

Seriously, at what point do you have to respect people for their utter, unfailing lack of self-awareness?

Guys! I think you are a little though on Jason now..

I mean, Mahalo (at a paltry $200 mil+ valuation) already makes more than HALF of what my hobby network of television blogs do!

Not too bad for being a 1 person bootstrapped startup with no employ.. oh wait