The tool bases its calculations into some research about the AOL - Weblogs Inc. deal:
In acquiring Weblogs Inc., AOL has now provided us with some numbers traditional media are willing to pay for a blog. Looking at the numbers above, one can try to guess at the value of a link from an external site. a single link on the weblogsinc network represents 0.002258559942180087 percent of the overall network.
However, things are unfortunately not quite so sunny:
Should we now assume that traditional media companies are willing to pay between $500 and $1000 per site that links into a blog?
Not quite. The incremental value is in the size of the network and the underlying tools. Jason and Brian have been working on developing a blog authoring technology, called BlogSmith, that sits at the core of their network and one has to believe that AOL saw some value in the software too. However, one can easily say that blog valuations are going to be easier to make after this deal since it provides the first yardstick in that space.
While numbers like this are obviously irrelevant, I’m still quite happy how my blog’s visitor counts have climbed from dozen to over 1000 visits per day between when I switched from static website to a blog in March 2004 and now.