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I've been watching that financial thread for a while now, and I'm a frustrated with all the sniping and lack of actual analysis on both sides.
I was a little skeptical about your anonymous critic's assertions, detikon, so I ran the numbers myself. Here's what I found.
Let's start with a brief look at all of the revenue data in the 10Q.
Here's what it says.
- In Q3 (fiscal, commonly referred to as Q2) 2002), LNUX had 5.1 million in net revenue.
- Of that revenue, 0.7 was due to exited business (hardware and Linux software services)
- 19.7% (or one million) of that revenue came from a single source: Intel
- Intel was the only customer that accounted for more than 10% of net revenue.
- 0.5 million was booked due to ad barter (as opposed to sales).
And that's it. No further information from that source. We need more information to continue the analysis and determine the details.
The Adequacy article by jsm which you hate so much provides some analysis, but it didn't look quite right to me, either. I don't like some of his sources, and some of his estimates look wrong to me.
I'll just stick with solid published information, and ignore the interesting speculation based on IRC chat or mysterious "inside" sources.
First, the disclosures regarding Intel tell us that no-one else paid LNUX more than $500,000 during the quarter.
Second, if that cool million from Intel came in the form of Sourceforge 3.0 licenses, you can be sure we'd see it on the Sourceforge brag sheet, but it's conspicuously absent.
So what did Intel buy? We can't be sure, but we know it came from OSDN, and that means advertising. This is hardly surprising, given that VA's CFO admitted in the conference call that OSDN advertising accounted for "substantially all" of the Q2 revenues, (without giving out hard numbers, of course).
While I agree with jsm's contention that most Sourceforge customers are probably buying 10 or 30 licenses at a time for evaluation (and let's remember, no-one bought 500, according to the 10Q), I think his estimate of 200K in sales for the quarter is a little stingy. I'll go out on a limb and say they may be selling as many as 100 seats in a good week, and grant them as much as 750K in revenue due to Sourceforge in the quarter.
After we've subtracted revenue from exited business, that leaves us with 3.65M of revenue from OSDN.
Now we have to set about determining how much of that should be attributed to slashdot. jsm's notion that the money from Intel went into a sourceforge "sponsorship" is interesting, but it's more likely it was spread out over a larger package, including banner ads.
Absent any other metric, we've got to use traffic stats to estimate slash-dot's contribution to OSDN ad revenues.
OSDN's advertising sales page claims 6 million unique visitors per month, and 120 million ad impressions.
Rob Malda's slashdot subscription announcement is most helpful.
We learn that slashdot has a third of a million visitor per day. Then we get a breakdown that relates percentages of users to dollars that would make all page views ad-free for those users, if they were to subscribe. I reproduce these figures below, along with page views/day, calculated from the $5/1000 pageviews subscription fee:
82% -- $20/yr ( <10 pageviews/day )
15% -- $05/mo ( 10-33 pageviews/day )
03% -- >$05/mo ( >>33 pageviews/day )
That middle 15% is our key. Unlike the less active percentile, can assume that they are daily visitors. We can now make a simple calculation: 15% of a third of a million visitors is 50,000 people, which in turn account for 0.5M to 1.65M pageviews per day, or 15M to 50M pageviews per month.
Thus, 15% of slashdot visitors account for somewhere between 12% and 40% of all ad-bearing OSDN traffic.
If we add the most active percentile, we find that 18% of slashdot users represent 20% of osdn traffic at a bare minimum, and possibly two thirds or more of all OSDN ad-bearing traffic. But we still haven't accounted for 82% of slash-dot's visitors.
That 82% is difficult to translate into page views without more information, but it must be substantial. If all of them are one-off visitors, never to return, then we could just add them up: 82% of a third of a million per day would be 80M per month, or two-thirds of OSDN ad impressions, but this is far in excess of OSDN's claim of 6M visitors/month. Note that if even half of a percent of all slashdot visitors are one-time viewers, then those one-offs account for the bulk of OSDN's claimed 6M viewers each month.
It is likely, then, that the vast majority of those 82% are daily visitors (or can be amalgamated as such), and we can calculate that there are about 273K of them, accounting for 8M to 80M impressions per month, or anywhere from 7% to 67% of all OSDN ad impressions.
You would have to be a complete moron to insist on the absolute minimum or absolute maximum of the possible range here (if you're not keeping score, that's 27% to 135% or more of all OSDN traffic).
If we split the difference at 81% and knock off ten points to be on the safe side, then we can make a ballpark estimate of OSDN ad revenue attributable to slash-dot by taking 70 percent of 3.65M, which gives us 2.555M, or just over half of all net revenue for the quarter.
Technically, that's the majority of VA's revenue for the quarter, but the anonymous poster was exaggerating quite a bit when suggesting that the "vast majority" or "bulk" of the revenue was due to slashdot.
© 2002, RobotSlave. You may not reproduce this material, in whole or in part, without written permission of the owner.
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