Life: online: Posting for profit: As weblogs soar in number and influence, their business potential lands many in the money.
From Guardian - 24/02/2005
Bobbie Johnson
Chalk another one up for the bloggers. Less than a month after claiming that American forces had deliberately targeted and killed journalists during the war in Iraq, CNN's chief news executive, Eason Jordan, resigned.
A typical media story, except his comments were not reported by the mainstream media, but on a weblog, an online diary. The remark, made in an off-the-record briefing at the World Economic Forum in Davos, Switzerland, was blanked by most news organisations, but picked up by webloggers and disseminated across the internet. Jordan soon resigned, saying he did not want the company to be "unfairly tarnished".
Jordan's is not the first scalp claimed by these vociferous armchair pundits, and it is unlikely to be the last. Over the past year or two, it has become increasingly difficult for anyone watching the web to ignore the rise of blogs. Former Conservative leader Iain Duncan Smith has even said they offer the British right the chance to challenge perceived left wing media bias. "The internet's automatic level playing field gives conservatives opportunities that mainstream media have often denied them," he wrote in the Guardian.
Weblogs, usually a parade of the author's private peccadilloes, have been hailed as a phenomenon by a host of supporters. Many claim they are the web's coup de grace, the heart of a personal publishing revolution to rival desktop publishing or the appearance of the first printing presses.
For all the hyperbole, the heart of the weblog movement has always been driven by amateurism - hobbyist pundits voicing their passions or wannabe writers giving us a window into their world. There are now millions of bloggers creating a network of interesting voices. Despite the grassroots "free" ideology, the hype has expanded further ever since it became clear that some people were making money out of the medium.
Top-ranking webloggers such as American law professor Glenn Reynolds (www.instapundit.com) and transatlantic journalist Andrew Sullivan (www.andrewsullivan.com) have managed to elicit money from readers eager to give their support. Sullivan, probably the most successful blogger on the block, raises thousands of dollars a time from his regular subscription drives. Both have used their popularity to hook well-paying work. Reynolds, formerly an unknown lawyer in Tennessee, has written regular columns for MSNBC and Guardian Unlimited, while Sullivan has seen his writing career pick up again.
"It's possible for an individual, skillful blogger to have income from a blog," says Adriana Cronin-Lukas, a consultant for fledgling firm the Big Blog Company (www.bigblogcompany.net), and a serious weblogging evangelist. "But ultimately it is the communications aspect of the blog that brings money in - by blogging about a company or expertise."
Others have found fortune in different ways. The anonymous writer behind Belle de Jour, the notorious and disputed diary of a London call-girl, has made a mint from her salacious stories, recently publishing a book and subsequently signing a deal for a TV series on Channel 4.
A handful of budding entrepreneurs have even taken the bait and tried to cross blogging with traditional publishing to fish for profit. Nick Denton, a former Financial Times journalist and experienced dotcommer, is recognised as the king of commercial bloggers.
Although he remains cagey about the cash his ever-expanding Gawker Media empire brings in, his stock is high and the company's business model is profitable. The high-profile sponsorship from consumer electronics giant Sony for his latest project, www.lifehacker.com, shows how weblogs are gaining legitimacy with the traditional business community.
Thanks to these high-profile success stories, thousands of bloggers hold out hope of turning their hobby into a paying job. It has become their digital El Dorado. Even top-ranking blog pioneer Jason Kottke (www.kottke.org) has decided to ask his readers to pay for him to be able to concentrate on his site full-time.
In fact, for all but a select few, this city of gold will always prove elusive. Instead, it seems the real way to make money from weblogs is not from producing the final product, but in delivering services to bloggers eager to live the dream.
Take Evan Williams, one of the founders of Blogger.com, the pioneering personal publishing firm whose easy-to-use software helped put weblogs on the map. Six years ago, he was starting up a small software firm with a handful of friends. In 2003, the company was bought by search giant Google in an undisclosed big-money deal. Last year, he decided to leave the Mountain View firm, safe in the knowledge he had trousered enough to give him ample time to decide on his next step.
Williams is not the only one to profit from weblog services. When Mena Trott started programming a weblog publishing platform with her husband, Ben, four years ago, she had no idea it would change their lives. Their initial success led the couple to form their own company, Six Apart, and they have continued to grow.
"It's been unbelievable," she says. Last year they drew $ 11m (5.8m) in funding from Japanese investors and the company's global workforce now stands at 80 people. "We're financially strong, and we're growing."
In January, Six Apart completed the buyout of LiveJournal, a long-standing diary/weblog platform with a user base of more than 5m people. Now the company has three products aimed at three markets, and a good profile among a business community that is providing them with income.
"We've now got offices in the US, Japan and Europe," Trott says. "I'm on the same speaker bill as Bill Gates and Steve Jobs. It's been a very good ride."
With an estimated 30,000 weblogs being created every day, it is easy to see the business potential. David Sifry is a serial entrepreneur with a long history of technology businesses including Sputnik and Linuxcare. He, too, is making a living from providing assistance to the world's webloggers, with a blog-focused search engine called Technorati (www.technorati.com).
Technorati is fast becoming one of weblogging's most innovative applications, searching the web in real time to let bloggers track who is speaking about them. The team - and many users - see it as a vital part of the interconnecting ecosystem that forms the heart of what is termed "the blogosphere".
"I was a blogger and I wanted to be able to track the conversations going on about me and the topics, companies and people that I care about," says Sifry. "I also quickly saw that by watching what people are blogging about, we could use those people as a massive collaborative filter, or attention lens, on the world's events."
With a small workforce and funding from venture capitalists, Sifry is blunt when asked whether Technorati makes a profit ("No"). But he is quick to point out that successful search engines can make good money out of something as simple as on-screen advertising. "Look at Google," he says. "They aren't doing badly."
Many experienced dotcom players have suggested Sifry's firm might be snapped up by a larger company. It is certainly common in a technology sector where consolidatory acquisitions by major players is the norm. And while Google's purchase of Blogger is probably the most significant buyout the sector has seen so far, it is not the only one. Bloglines, a web-based application that helps blog readers keep up with lots of sites at a time, was sold this month to search engine Ask Jeeves in a deal that had analysts buzzing with speculation.
So, could the likes of Six Apart be booking tickets for the gravy train? Mena Trott says no. She dismisses rumours that the company may be bought by Yahoo, taking time to point out the irony that it is Six Apart's products that have allowed takeover gossip to flourish so widely.
"We operate the business as a growing company. We're not building to sell," she says. "I'm very happy that we make tools that allow people to communicate. But sometimes I'd prefer some moderation."
Just as there are only a few superstar webloggers who can turn their hobby into cashflow, so the market for weblog services is limited. Despite its buoyancy, the market would find it impossible to accommodate too many companies. But the thousands of dollars pulled in by top weblog writers pale in comparison to the sums generated by big players in blog services. The temptation to join the fray could be hard to resist. Could this be another dotcom goldrush like that which collapsed so dramatically five years ago?
Cronin-Lukas points out what the bean counters want to hear: blog readers are desirable consumers. "A recent survey by US-based ad network Blogads revealed 61% of blog readers are over the age of 30, and more than 45% spend five to 10 hours reading blogs each week."
With figures like that, it will be hard to persuade some eager beavers not to jump on the bandwagon.
Links
Posting for profit
www.blogger.com
www.typepad.com
http:/blogdex.net
www.guardian.co.uk/online/weblogs
http:/masl.to/?V2103298A
Copyright 2005 Guardian Newspapers Limited
Date: 24/02/2005
Publication: Guardian
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