After some deliberation, I think the best way to value a blog post is actually by treating it as an asset that provides a stream of payments over time. This means valuing a blog post like an annuity.
Let’s say you own a hypothetical company that will make you $100 every single day, forever. With infinite guaranteed payments, does this mean the company is worth infinite dollars today (or any day, for that matter)? It actually does not. While this would be a nice business to have, in any normal economy with profit-making opportunities, this company has a present and tangible value.
Annuities are assets that provides payments over a fixed period of time. Since this business model provides income infinitely, it is a perpetuity, which is just the infinite version of an annuity. Perpetuities are much simpler to calculate than annuities since the time values in the annuity formula are substitutable with fixed limits. (i.e. The formula 1/x has the limit “0″ as x increases)
In the perpetuity fomula, PV= Present Value, A= payment Amount per period, and r= interest rate.
The interest rate is not necessarily the national savings rate, but more accurately the highest interest rate that you can earn money on (which has the same relative risk as the annuity in question). If I’m 98% confident my perpetuity will continue paying consistent dividends of specified value, and I am 98% confident I can make 5% interest on stocks/bonds/other assets for the life of the annuity, then my interest rate, r, is 5%. This is effectively an opportunity interest rate which you could otherwise have earned on your money.
For simplicity, let’s just say the business makes one lump sum payment of $100*365, or $36500. (We’d have to treat 365 payments as an annuity itself). Plugging this business model into the perpetuity formula, the PV = $36500/.05, or $730,000. If every market bidder had assessed the same risk, the highest bidder for the business would still be $730,000. Any more would be irrational, like paying $51 for a $50 gift card, and any less would mean either free money or a higher time value of money than Methuselah.
In other words, a rational person with no monetary urgency (negligible time value of money) would be entirely indifferent to having $730,000 under his/her mattress (which he/she would have to invest at 5%) or this example company. As long as interest expectation stays the same, the value of this company will always be $730,000. So you can buy or sell the company at the same price in 2010 or 2210 (keep in mind the savings/interest rate accounts for inflation). Notice also, that as savings rates rise, the value of the company drops (higher opportunity cost), and vice versa. Of course perpetuities, in reality, are rare, but annuities flood the marketplace as dividend producing stocks and bonds.
I think it’s fair to suggest that quality blog posts have a shelf life of about 4 years. Since this is a fixed length of time, we calculate the present value of a blog post using the annuity formula:
Lets say a post on my blog makes me 25 cents per day (pre-tax), for 4 years. More likely it would follow a bell curve of sorts (for which you could calculate the present value for each year, and then add), but we’ll say it’s the same for simplicity. We’ll also say that you only get the earnings paid to you once per year, at the end of the year for simplicity. $.25 x 365 = $91.25. We’ll again say the alternate savings rate is 5% (pre-tax).
91.25*((1-1/(1.05)^4)/.05) = $324.
A really good blogger can then generate $324 in value in one post. Of course, he won’t see it all for four years (in this model), but, for the most part it’s interchangeable with $324 today.
My blogging goals are likely not that different from any others who wish to pursue blogging as a full time job. I can be financially happy on $100/per day including weekends. Of course, I can always take on other projects part time if I must 
.
So, if I want to make 1 blog post per day, with each day generating $100 in present value, how much does a blog post I write need to make per day?
$100= A*((1-1/(1.05)^4)/.05)
A= $100/((1-1/(1.05)^4)/.05) = $28.2 (annually)
$28.2/365 = $.077
My blog posts must make 7.7 cents per day for four years.
I will also reach my full salary of $100 per day after four years, at which point my blog income will stagnate due to articles over 4 years now ceasing to produce value. Another way to look at this is that I need 4 years worth of blog articles to earn my full salary.
For simplification without an interest rate:
Each blog post makes $100 over 4 years= $.069/day
If I have 4*365 blog posts making $.069, I get $100 today.
Phew! I hope I make 7.7 cents tomorrow after all this work!
I have noticed a few themes consistent with successful blogs. Of course, these could be downright wrong, but I’m going to attempt to build my blog based on these maxims. If my blog ultimately fails, it’s either because I didn’t follow my own advice or my ideas were wrong. If it succeeds, I could be wrong on why it did succeed. Anyway,
1. Lots of quality content.
When writing this, I hypothesized that frequently updated blog sites would have consistent growth in traffic ratings. After looking up Alexa traffic ratings, I found this to not be the case. Older, but content heavy sites such as Maddox have, at best, tapered off and are still frequently hammered by visitors, while many frequently posting blogs show erratic traffic patterns. I wager this is due to many post-heavy blog sites regurgitating news with little interesting to add. I know that I, at least, often repeatedly reference quality blog articles.
2. Build timeless content.
Bazillions of news events happen every day and bazillions of more places repeat the news. Most people don’t want to read 100 variations on the same event. I don’t either. Most people have a few favorite sources. Additionally, hardly anyone will want to read news more than a few months out. I think if you’re going to focus on anything news oriented, you have to go at it full force and be interesting and absolutely qualified (or hope you get Dugg one day). Otherwise, write about relatively timeless things, which people are interested in. And unless you’re the man on any one subject, it’s probably better to be a jack of all trades around a central theme. If you do succeed with short-lived content, congrats. You’re a champ.
3. Avoid personal topics.
Many people use their blog as a journal. That’s fine if you aren’t trying to make a living out of it. The more I look around the blogosphere, the more very personal posts I see. Personally, I read blogs for entertainment, knowledge, and to help me solve MY problems. I don’t really want to know about yours. Unless you have stalkers, most people don’t really care. I may dress up my cats for Halloween, but frankly I don’t care that you dressed up yours! On the other hand, personal anecdotes put a face behind the blogger, and stories of success provide lessons and inspiration.
4. Be Interesting
If you write about really boring stuff or are too niche specific, no one will read your site. Your site has to provide value for an audience. The audience has to be interested enough in what you’re writing to actually expend the effort to read it. It’s good to have a sense of humor here. I think being interesting will be the toughest one for me. I’m often entranced by irrelevant and typically boring things, so I have to be careful to not alienate or bore my readers with breakfast cereal epiphanies. I’m also going to have to learn to make my writing interesting. Most people just don’t care when the 4th Amendment was last amended. Neither do I, but I may be motivated to check after I make this post. Then I may think it’s interesting, but will have to exercise restraint in trying to tell the world about it.
5. Careful not to ramble
When you write, you want a rhyme and reason for each sentence. There’s a lot less subtext in writing than in talking. If you meet someone and start talking about something mundane, you’re mostly talking in subtext, saying, “I’d like to get to know you,” or “Hey, comrade, we should get along.” You verbally have to talk in subtext sometimes, because if you actually said, “Hey, comrade, we should get along,” you’re newfound comrade would, at best, think you’re British. If you talk about anything mundane in a blog, you’re readers will leave. Also, don’t insult your reader base. Especially in intellectual blogs, your readers will be intelligent and catch on to the moral of your story probably even before you finish it. There’s a difference between looking at a problem or solution from three different perspectives and saying something three times. Perez Hilton readers, on the other hand, probably need repeated affirmations on who’s the hottest celebrity and why.
Any writer must also be confident. In retrospect, this entire post is pretty boring awesome. I would never bookmark this site.
Hi, this site is all about ninjas, REAL NINJAS. This site is awesome, and I can’t stop thinking about ninjas.1
Greetings! It’s rather difficult to make an introduction for a blog. When there are millions of blogs (yes, millions), and many of them maintained and updated, there’s not much to say about the introduction of a new blog. It’s just another drop in the blogging bucket of high competition and negligible start-up costs. In order to make this blog successful and profitable, I have to separate it from the mass of blog noise. I know that this will be no easy task.
Since I hope to eventually make a living blogging and be able to do it full-time, I know I must take this seriously, but yet not be afraid to fail. The quality of my early efforts on this blog will also likely be marginal. This will be for at least three reasons:
1. I have to use the first weeks, or even months, of my blog as a launch-pad.
I will have to throw some feeder posts out there since I have to know if I can make this my job. I also have to get picked up by some search engines. A reader-base does not a few blog posts by an anonymous blogger make.
2. I am a blogging novice.
Talents generally take time to develop. Don’t believe me? Watch early episodes of Aqua Teen Hunger Force. Kurt Cobain was a natural exception: somehow he always made power chords sound like modern Beethoven. I’ll probably never write like Hunter S. Thompson; I just hope my abilities improve over time.
3. It will take time to find my writing niche.
While a blogger must be interested in his own writing topics, he still must cater to a reader-base. If, on the other hand, every thought you have is sheer, enchanting awesomeness, I suppose you could write about whatever crosses your mind. For the most part, though, if you run a poker website, you can’t take a week off from poker tips to write about the taxonomy of the modern squirrel. If I’m able to find an interested reader-base, it will likely be more lucrative to focus on topics interesting to those readers. I think I just sold out on my first post. Perhaps I shouldn’t say that.
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