Gawking At Gawker Media

Now, if you may, a look at Gawker Media. Nick Denton and company just got a loving write-up courtesy of Jon Friedman, who praises Gawker for their “growing up” and a newfound “playful, not obnoxious style.” There’s even a by-name shoutout to the Gawker ’07 season team of Choire Sicha, Alex Balk, Emily Gould, Doree Shafrir and Joshua David Stein and regular story subject Julia Allison.

But Friedman also touches on the question of just how much money Gawker is making… It gets interesting from there.

To recap the tale, Shylock Blogging (and can someone explain who that guy is anyway?), recently speculated about Gawker Media’s estimated revenues. Their number (~$52 million) was wildly off-base, but they got people thinking. Analyst Henry Blodget of Silicon Alley Insider estimates Denton’s revenue at $12.5 million annually. Greg Allen thinks it’s somewhere in between.

Meanwhile, the best informed commenters out of the pack, New York Magazine (cough Jesse Oxfeld/Jessica Coen cough), did their own number crunching. Out of all the guesses at Gawker’s profits to come out this week, they tabulated the most accurate count of Gawker Media’s expenses. But is their conclusion that Gawker earns a $14 million annual profit accurate?

But back to the original Shylock posting: Nick Denton chimed in

— Neal Ungerleider

Denton: “Network ads tend to be cheap and tacky — which is why we rarely run them in remnant. You’ll see house and trade ads, and campaigns by blue-chip brands, but no network, right now. Easily verified. Also, our traffic numbers are public, as you have discovered. If you look at the month-by-month Sitemeter stats, you’ll see that there is no summer dip. Therefore you can’t assume that our underlying traffic level is higher than 150m a month. In short: your methodology is seriously flawed.”

Shylock: “Hi Nick, and thanks for clarifying. I had a few questions that needed answers before I edited the article (though I’ll leave most of it as it is so people see what all the fuss was about). My big problem was the fact that people said “unused ad inventory”. Couldn’t really grasp the concept of letting 10 million page views or more go to waste without having some money making ads on them. The fact that they might be tacky and some didn’t want to display them didn’t really cross my mind. I still don’t get however the $30 price for the 4 ads. If the number quoted by web publisher (a troll since he doesn’t know how to behave in a comment) of 10-30 percent is true, then maybe dropping the price to $10 would sell the entire inventory and make more money? Still talking like a newbie perhaps, just trying to understand the thinking behind the method. Good luck growing Gawker and I hope you didn’t get too many requests for wage raises. :)”