Happy Birthday, HuffPo. (Hint: Give Money)

Huffington Post is an impressive 5-year-old, ahead of its class, as it approaches its May 9th birthday. It seems like yesterday that it broke into the top 25 news rankings and now it has landed in the top 10. In March, Nielsen attributes more than 13 million unique visitors to the site.

That’s a 13% increase month-over-month and a whopping 94% year-over–year. It’s by far the fastest-growing news site. Under those numbers are some interesting comparisons, among its top 10 peers. I’ve looked at Nielsen’s comparative numbers for some of those 10 top – not just uniques, but time on site and page views as well.

What emerges is this:

• It generates 18 page views per unique. That’s higher than the New York Times at 16 and Yahoo News at 15. It also beats Google News at 15. So, if its unique visitor mojo continues, its engagement with readers promises to grow even more greatly. There’s an interesting multiplier effect here, one I delve into deeper in my Nieman Lab post today (“The Newsonomics of HuffPo’s Pinball Wizardry”)
• Its time-on-site measures are more average. It’s been holding visitors for about 12 minutes a month, a couple of minutes less than the Times and Yahoo and a couple of minutes more than Google News. That time is lately flat.

So overall, we see its greatest growth in uniques (13% March/Feb.), page views (7% growth) and that it is actually 1% down on time-on-site. That’s just one monthly snapshot, though, but numbers worth watching.

Now the question of that thing called revenue. When Eric Hippeau replaced Betsy Morgan as CEO last summer, his mandate was clear: Turn that traffic into revenue and sustainable profitability. There, he has a lot of work to do.

Figure that HuffPo made revenues of $12-15 million last year, a consensus estimate. Let’s say it might do $20 million in 2010, though that could be generous, given the tepid rebound. So $20 million would be an average of about $1.6 million a month. Thirteen million monthly uniques, $1.6 million a month would mean about 12 cents a unique visitor per month.

Now take the New York Times.

The Times doesn’t break out digital revenue for NYTimes.com specifically, but it you do some extrapolating from its reports, you can figure that NYTimes.com generates about $15 million or so a month. (That’s independent of the About businesses, Boston and the regional group). The Times gets about 16 million monthly unique visitors — so about a dollar a unique visitor a month.

That’s the strength of being a company that has long sold advertising, owns key agency relationships and does print/online bundling. Still: a dollar per unique compared to 12 cents a unique. As in all things web, we could say, HuffPo is being underpaid or we can say the Times is being overpaid. Whatever, that’s a delta worth knowing and exploring.

1. 

   Gary Warner says:

   April 22, 2010 at 12:29 pm

   The question for Huffington Post over the long term is what happens when all the sources it aggregates disappear or become anemic. I got to HuffPo every day and most of the good stuff is a riff (or riff-off) of main stream media news. It’s the closest thing to a digital age salon around, but the conversation starters for all that wit and wisdom are drying up.
2. 

   Steve Goldstein says:

   April 22, 2010 at 6:50 pm

   Here’s my prediction, assuming your numbers are right. Huffpo doubles to 24 cents a unique and NYT drops to 75 cents a unique. Neither can make money at the rate they move to. Disaster continues on all fronts.
3. 

   Arul Sundaram says:

   April 23, 2010 at 2:13 pm

   Great post, Ken. The $1 vs. $0.12 issue is the key one – and it cuts both ways. If HuffPo can manage to be profitable at $0.20, then what does that mean for someone like the NYT? Or, more alarmingly, for traditional local media (assuming the NYT is more akin to national). As HuffPo rolls out local editions they are likely bringing their lower cost structure with them.
4. 

   Reggie Middleton says:

   April 25, 2010 at 5:54 am

   The name of the game is not revenues, it is profits. Sticking to measuring revenues is reminiscent of the dot.com days when massive valuations for perennially unprofitable companies were justified by revenue multiples. the problem is we are in business to make money (profit) not revenue.

   The key is determine which entities have the probability of dropping expenses or raising revenues as proportion of expenses enough to create and maintain both a solid profit margin and steady profit stream. As I see it, the ad revenue model as historically an currently applied just won’t cut it. I am a valuation expert, so I feel comfortable in commenting on the topic.

   I think this rant and related article may be of interest to the readers here. They are links to a new blog model that is gaining traction:
   http://boombustblog.com/reggie-middleton/1309/

   This is the link to the original article:
   http://www.crainsnewyork.com/article/20100418/SUB/304189954