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Out of Our Minds
Monday, May 09, 2005 8:54 AM
How to Build a Blogging Empire
Anita Sharpe on Business

Just curious -- how many regular bloggers expect their sites to become big money-makers?
In case you missed it, there was an interesting piece in yesterday's New York Times about the prospect of turning well-trafficked sites such as Gawker into a new kind of media empire.
In typical form, Nick Denton, publisher of Gawker Media, scoffs at the prospect. 'The hype comes from unemployed or partially employed marketing professioals and people who never made it as journalists wanting to believe,' Denton tells the Times.
Still, Denton admits that he is aggregating sites to better appeal to advertisers. And he actually pays bloggers, whom he calls 'editors,' about $2,500 a month to write at least 12 compelling posts a day, according to the Times. Advertisers pay between $4 and $50 for every 1,000 times an ad is seen by visitors.
But Denton insists the prospects of the blogging business aren't huge. 'If you take the amount of attention that has been devoted in the last year to Web logs as a business and something that's going to change business and compare that with the real effect and the real money, it's totally disproportionate,' he says.
Do you agree?


Robert - 5/12/2005 10:14:18 AM
As with many start-ups, if there's real money it might be getting these things to a stage where they can be 'spun' and sold to a larger media company that doesn't need it to be the primary revenue producer. Of course, that defeats the whole purpose!! Was interested to read The Washington Post Company's description in its annual report of its recent acquisition of Slate (which, yes, truly is more like traditional reporting-based media than a blog, but like a blog, exists only online). It reads, 'Slate is a small business, likely to be important for its quality and for what it teaches us about internet publishing.' While this might be a backhanded way of saying, 'hey, shareholders, don't beat us up if this thing doesn't make any money,' it is encouraging to see a large, diverse, profitable company using words like 'small' and seeing the value of something beyond direct profits. (P.S., I am a past employee of WPCo.)
Paul Gladen - 5/9/2005 3:43:54 PM
I think Nick Denton is seeing blogging purely from the 'journalist blog' worldview. I fully agree with his line of argument that online diarist style blogs may struggle to make much money. After all they are really just an alternative form of journalism (and one that clearly the mainstream media is concerned about - given circulation numbers for mainstream media continue to fall - and hence why the NYT is perhaps happy to write this kind of article suggesting blogs are going nowhere). But he and the NYT shouldn't tar all forms of blog with the same brush.

There are plenty of business blogs whose purpose is not to directly drive revenue but rather to support growth in the main business through the conversation with customers and other stakeholders - e.g. Scoble/Microsoft, Lutz/GM, and (I presume) the Worthwhile blog. It may not be a bloody revolution but I think for many businesses it will prove to be a powerful new tool.
Grant Henninger - 5/9/2005 11:45:34 AM
I think trying to build a media empire from blogs is the wrong approach. Blogs are so powerful because they allow for the voices of individuals to come through. Nick will likely be able to create a network of highly successful sites. But none of his sites will never corner the market on their topic. He will never become the Hurst of blogs, there will never be a Hurst of blogs.

That is not to say there isn't money to be made from blogs. I think there is a lot of money out there that people are already making. But that money is distributed to many hands, instead of being consolidated into a few like previous forms of media have done.
Halley - 5/9/2005 9:22:46 AM
Hi Anita = I know a few things about blogging and I suspect Nick Denton has gotten burned a bit by boasting about his business model for blogging before and this is why he's shy about the great business prospects blogs offer now.

We're only at the very beginning of this blogging/social software business. He's doing one model. There are many more.

A better model to consider is how people who were not known at all, have created blogs, gotten a readership, seen that grow exponentially, written books and have created an influential position for themselves -- all based on blogging software that is essentially free. Yes, it's sweat equity, like taking on a fixer-upper in the worst part of town, but this model alone is rather interesting when it comes to 'how do bloggers make money' and the answer is: they brand themselves, some sell advertising on their blogs, most leverage their position and fame to get paid for speaking at events or consulting with companies on corporate blogging. It may not seem like a big deal, but it's a job that didn't exist 5 years ago.

The bigger meatier question is how blogs can make money for companies and how they can generate publicity and revenue for products. That will be answered in the next few years in very interesting ways.

Just consider Braff's skillful use of his blog to promote his movie Garden State and his other projects.


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