Mashable to CNN For $200 Million? Really?

I can't find any sourcing, even on supposedly "reliable" sources like Reuters, for the $200 million figure that CNN is supposedly considering paying for Mashable. While the idea of the acquisition is plausible, I find the figure hard to believe. Simply put, with 40-50 employees, and about 50,000,000 pageviews per month, the math doesn't work, unless there's some magic I'm missing that CNN greatly values.

When AOL agreed to pay a reported $350 million for The Huffington Post last winter, it got a general interest news powerhouse, with multiple properties covering everything from lifestyle to business, and, of course, politics; no small matter as we move into a tough election year, with politicians ready to spend millions on political ads. And it also got Arianna Huffington, whose PR value is worth a considerable amount, and HuffPo's ability to drive traffic to tons of AOL properties across a wide spectrum. As of last October, they had a BILLION monthly pageviews, 20 times more than Mashable.

Mashable is a powerhouse in the tech and social media worlds, and they've got a brilliant strategy of spreading their material, generating pageviews and engagement, are masters at SEO, especially through their many evergreen "best of" or lists of 5-10 things you need for whatever digital/social/tech you're involved in. They've got a strong hold on the niche, which is a large niche, but a niche, nevertheless. Can they really be worth well more than half of HuffPo?

I've done some quick calculating (the spreadsheet is here), and even if Mashable, with all their revenue streams, has a very healthy $20 average revenue per 1,000 pages served, and they get a 10x multiple on that, that's still "only" a $120 million acquisition price. If we say 50 employees at $200,000 revenue per employee -- a high number for a media venture -- the numbers are even less.

I may be wrong. It wouldn't be the first time. I made the mistake once of thinking that a highly nimble editorial operation would be valued at well more than its traffic justified, and learned last month when PaidContent was acquired from the Guardian group by GigaOm that the actual price Guardian originally paid was a fraction of the rumored $30 million at the time.

Either way, congrats to Mashable chief Pete Cashmore for brilliantly executing an editorial strategy that perfectly fits the times. If his site is acquired, he stands to make a justified killing. This time, though, I'm erring on the side of caution.