So, on my daily round to see if there is some cools sites for sale over at Sitepoint I found a familiar name, Entrecard.com.

It appears that the owner Graham Langdon are selling his baby. The starting bid is $100.000 and he says in a comment that he got a reserve that is just under a million dollar.

If you have been blogging the last year, you got to have heard about Entrecard. But if you haven’t it’s basically an simple banner exchange for blogs. You display 125×125 banners on your site, and you get your banner on other sites.

The Lift Of

The service got really popular after a couple of the big shots in the industry put them on their blogs. This included Shoemoney, John Chow and Problogger. Hey, even I put them on my site for a while. But, after some time a lot of bloggers found out the most of the traffic was crap, and took the widget of their site. Non of the big bloggers got the widget on their site anymore, and neither do I.

Alexa Tells The Truth?

If you are a fan of Alexa you might notice that the stats are going down for Entrecard. At least for the site itself.

In my world, this chart actually tells me what I have been thinking, that Entrecard flopped. The funny thing is though, when reading the auction description it looks like Entrecard actually did the opposite thing. Here is what Graham start the description with:

OUR AD NETWORK DELIVERS:

80 MILLION IMPRESSIONS PER MONTH
3 MILLION CLICKS PER MONTH
GROWING AT 16% MONTH-OVER-MONTH without any marketing

Thats pretty impressive stats, and doesn’t fit really well into my “flop” theory.

I launched Entrecard ad network 11 months ago, and in that time is has spread to 20,000 blogs delivering 80 million impressions per month. We’re growing fast, and in the next year alone we’re on track to sign up between 40,000 to 80,000 more blogs

Ok, so Entrecard got 20.000 blogs in their network now, and are calculating with up to 80.000 blogs within 2009. Graham says that around 100 new blogs sign up each day, which are 3000 each month and 36.000 each year. Pretty impressive. But how can the network grow and grow, but fewer and fewer big blogs are getting on board. Hey, most of them are actually jumping over board.

If we get back to the falling Alexa stats he explains the falling in traffic on the site with the launch of the Entrecard toolbar. He says that the toolbar is used by 7.000 bloggers, and that they don’t need to go on the site, because they can do everything with the toolbar. I guess thats make sense. But It’s still strange that the traffic is falling that dramatically. But then again I just got alexa stats, I don’t got the server stats, so it might not be that accurate.

The Reason

The reason of why he is selling of Entrecard is actually quite good, I’ll just copy/paste what he wrote:

I am selling because I have come to a stalemate. Entrecard is growing fast, but I do not have the resources to put behind it. I recently met extensively with Venture Capitalists who were going to make a 700k seed investment and a 2-5m follow on Series A investment in 6 months. The deal fell through in the 11th hour, right before the terms sheet, because they lost faith in my ability to execute the plan after a series of tests in which I did not know I was being tested. The valuation we were discussing was 8 million. We were going to open a headquarters, hire 10 people, and go straight to the top. Then it fell apart, and after getting my hopes up, I just haven’t been able to get back on my feet. I’m a wreck and feeling like a failure to come so close only to drop it due to my idiocy.

Strange reason, but it might be legit. I don’t know Graham in personal, so I can’t be the judge.

12x Montly Revenue Right?

The ongoing price for sites these days are around 12 times monthly revenue. I know Entrecard don’t fit well into this, but I find it strange that Graham haven’t monetized the site better then making around $2.000 per month. Hes bragging about ideas that easily could shoot the earnings up to $30.000 per month. The question I got in my head is; Why haven’t Graham implemented this ideas himself?

Final Words

I think Graham are trying to sell a sinking ship. Thats my personal opinion. Next year Entrecard will be a service that are almost dead. I have quoted Graham some times in this post, and I guess we have room for one last quote:

Whoever buys this site, if you develop it and hold onto it for a year or two, will sell it for 20 million + easily.

Right, that brings me back to the monthly income issue. Why don’t you just keep the site yourself for a year or two and cash in 20+ million dollars “easy”. :0/

Do you still have the Entrecard widget on your blog?