Archive for the ‘Blog Spam’ Category

Zillow Post Update

October 12, 2006

I was just searching through my “blog spam” and found this comment on my Zillow Post.  The “commenter” did not leave a website link…but I thought you may be interested in his take.  I happen to agree.

–start comment–

Here’s a little question that I think will be fun and interesting to answer… how many visitors will Zillow need to attract to generate the revenue, earnings, and market value that will satisfy their investor’s?

Assumptions
– $50M is all the VC money they raise
– 60% of the company is now owned by VC’s, giving them a current valuation of $83M
– 5 year time horizon to exit
– VC’s want a 75% IRR

This means this now $83M company needs to be worth $1.36B in 5 years for the VC’s to get their IRR.

Housevalues (SOLD) currently is worth $162M with a P/E of 14.7. So if the market values Zillows at the same P/E, it implies Zillow needs to be earning $92.6M in profits by 2011. Ok, so what does that mean for their top-line?

If you assume Zillow will be 2X as profitable as Move.com (3.5% net margin in Q2 07), Zillow need to generate top-line revenue of $1.32B in 2011 to get the requisite $92.6M that will give them the $1.36B market valuation.

So how many users must Zillow attract to get $1.32B in revenue?

Well, it depends on their average CPM (they do claim to be an advertising business do they not, so that’s a fair measure). Let’s assume they generate a very high CPM of $10 per 1,000 page views (Myspace is getting sub $1 CPM’s).

1.316B / 10 = 131 million ad units X 1000 page views per ad unit = 131,684,095,177 page impressions.

Assuming each visitor to their site views 10 pages, Zillow must attract 13.2B visitors to their site PER YEAR by 2011.

Considering their are 6.5B people on earth… every man woman and child on earth must visit Zillow 2.0 times EACH per year in order for Zillow to generate the profits, via an advertising model, that will create the profits to support the market value that will pay back the investors.

My take… Advertising is not really their model.

–end comment–

Google Promotes Blog Spam

September 27, 2006

I had a weird blog spam today – so I looked into it a little deeper.  Come to find out that Google and some other huge (and I mean huge) companies are actually sponsoring what amounts to a blog spamming contest.

Shaastra 2006 – “…an annual technical festival of IIT Madras. We celebrate the spirit of Engineering”

Looks like they also celebrate spam on my blog  – and they got Google to sponsor it.