Business Model for Blogging

Jason Calacanis of Weblogs, Inc., one of the few entrepreneurs to
attempt to build a business around by aggregating and paying bloggers,
posted the best article I’ve seen to date on how Google AdSense can support a content company.
Last September, he says, who would have thought that they could
generate $1 million in revenue without hiring a single sales person.
Now they are generating as much as $2,000 per day from AdSense ads.
Google, with their generous revenue sharing for content partners, will
provide revenue potentially thousands of successful online businesses.

I like Jason’s transparency and openness. I think it is great when
entrepreneurs share successful tactics with each other. I think it’s
good for the economy for good ideas to spread. Sure, it may mean less
concentration of wealth in the hands of a few, but the world will
definitely be a better place if best practices are shared and adopted
more widely. More overall wealth–a bigger pie for sure–and less
scarcity and suffering.

The problem is, even with openness like Jason’s, there are too few
entrepreneurial minded folks in the world. Anyone could go out and
start a blogging aggregation company, sign up for AdSense, and make a
go of it. After all, traffic to blogs is up 31% this year,
with no end in sight in the growth of the blogosphere. But few people
really have the nerve to start something from scratch and give it a go,
even in a hot sector like this, and even fewer will have the
persistance to work day and night for years to turn an idea into a real
world success.

Jason’s April post about conversations he has with venture capital associates
to me represents the kind of attitude (not to mention hustle and
passion and resilency) that entrepreneurs must have, even when no one
else believes in them or their business idea.

Some of the most successful blogging business models to date are from
the blog hosting companies. Google acquired Pyra Labs in Feb. 2003 to
acquire blogger.com, which had 12 million visitors in July, more than
twice the traffic of Xanga which seems focused on teen bloggers and
music reviews.

Six Apart raised $10 million in a Series B round last October through an investment by August Capital’s David Hornik, himself a blogger.

Chinese blog company Bokee also apparently raised $10 million in venture funding.

While it might be too late to just copy a blog hosting or blogger
aggregation business model in the U.S., it’s never too late to figure
out how to incorporate blogging into your current business model, and
if I were a venture capitalist, I might be looking for blogging
startups to back all over the world. I do believe blogging is somewhat
addictive, and because it is subjective and first-hand, I think it is
healthier and more honest than traditional journalism, which pretends to be objective, but never really can be.

I believe that blogging will disrupt traditional media in a huge way
(even though I only got to page 28 of Hugh Hewitt’s book Blog–hey, I
was already a believer!) and I haven’t yet finished Dan Gillmore’s We
The Media (same story).

I’m working on one idea now to turn tens of thousands of customers of a
popular CD ROM reference tool into occasional bloggers. With AdSense,
this kind of a content creation engine from already paying customers
might be a powerful profit generator.

I still believe as I said last November that blogging is one of the most important things I do.
(Unfortunately, I couldn’t blog while on vacation for two weeks either
because the software I use doesn’t support remote posts via email or I
just don’t know how to do it yet.)

One Comment

  1. I am the writer of the blog Oblogatory Anecdotes. It is growing in leaps and bounds. I double my traffic every few weeks.
    I am also unemployed. Do you have any advise for me that I could use to make money on my blog, or do you know some good companies that are hiring? Let me know. Thank you.

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