Mashable for $200m to CNN - Its Bubbletime alright!

According to the NYT, "CNN, a unit of Time Warner, and the social news Web site Mashable are in advanced talks that may lead to an acquisition of the site, three people briefed on the talks said." The price being talked about today is $200m. Given that Techcrunch, a bigger and better known site sold to the Huffington Post for between $25 - $40m, this would appear to be (at least) a 10-fold incresae in valuation per eyebal (sorry, "unique" in modern parlance) in a year or so. Mashable gets about 20m hits a month, say 250m a year, that price values each "hit" at about $0.1 (assuming a 5 year revenue based NPV, S curve 75% curve, and a c 20% IRR) which is very, very high compared to current cashflows (think 1/100th of that maybe as a "real" value per hit)

There are only 2 explanations for this:

(i) There is a zero too many in the report (and even then I'm surprised at the price)

(ii) CNN has got totally rat-arsed drunk on extra-bubbly Social Media kool-aid (not unknown, look at Time Warner/AOL at the height of the last Silly Season)

Good for Pete Cashmore, the founder - but they could buy all of Mashable's 40-odd bloggers for 100+ years for that price. Even Henry Blodgett thinks its only worth c $40m!

CNN could usefully also look at the lessons from most previous Blogquisitions, by and large they have all lost spectacular amounts of value for the acquirer, especially once the Founding Father goes or loses focus, and given that Mashable has a good sideline in republishing lightly repurposing Other People's Content, with something finally deep pocketed to go after, life could get even more interesting for CNN.....

But to me, whether it is a rumour (in the frothy atmosphere of SXSW, more than possible but I'd bet there are talks....) or not, it's evidence we are in BubbleWorld, in that surprisingly few of the articles I've read about it - many from mainstream organs with "serious" tech journalists - are gasping at the price, in fact many don't even question it.....and yet the real evidence is all these sites are selling out, so if anything the industry is no longer seen as value creating, so one assumes quite a few of the others are unofficially for sale.

A smaller engine plus CNN's distribution channels would be a far better buy in my view. But I guess when (if) Mashable now sells for $50 or something, everyone will see its so much less that $200m that they will think its fine.

By the way, at that price, pro-rata-ing the relative traffic levels, Broadstuff will be selling next week and I am retiring to my Greek Island.....