The valuation makes sense to me. Their userbase is hard to monetise (I'd wager a large chunk of kids aged 10 to 18 with limited purchasing power - and the adults there are definitely in the AdBlock crowd). Things like premium site subscriptions and print services will only take you so far - and now that we're post-"mainstream Internet" its growth is limited to the rate people are being born and given its anti-establishment streak I don't think the site will last long in China.

So if the site is making $10m/yr profit, 3 years' revuenue and no expectations of growth means $36m is a fair price.