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category: business

21 Jun 2007

Mainstream Media’s “Blogs As Business” Obsession Ramps Up

by: Ashkan Karbasfrooshan

related tags: Management | Blogs |

First Business Week, now USA Today (I’m sure I am missing a couple dozen in between).

The USA Today today covers the ascendancy of Om Malik and Michael Arrington. Some highlights:

“Om (Malik) and I love scotch,” Michael Arrington says. “But we never drink anymore.”

I’m thinking: man, I hope I never have to give up scotch.

The two friends no longer have the time or energy, in part because they’re too busy competing with each other.

I can imagine, but I see them more as collaborators than competitors. I think they both get that they’re the alternative to a large extent to the San Jose Mercury, Red Herring, Business 2.0, CNET etc. It could even be argued that those are complementary.

The simple truth is that the Web is growing so quickly still, and online publications are growing much slower than offline is shrinking, that it makes no sense for two online entrepreneurs to claw at one another. That explains the Nick Denton/Jason Calacanis frenemy PR act. That is truer than ever now that Denton is flying solo as a publisher of a blog network and Calacanis has cashed out - and provided a much needed M&A multiple comparable.

Arrington, 37, is the force behind TechCrunch, a blog chronicling the rise and fall of Internet start-ups. (They’re often called Web 2.0 companies.) Malik, 40, runs GigaOm, a slightly more scholarly blog that looks at all things techy.

Interesting to note their age. It helps that both have covered - either as businessmen or writers - a couple of cycles in the boom and bust that comes with Silicon Valley, though sometimes their giddiness makes me question that.

GigaOm has readers numbering in the hundreds of thousands, and TechCrunch’s audience tops a million. But that doesn’t accurately reflect their far-reaching influence. TechCrunch is the fourth-most-linked-to blog on the Internet, says Technorati, a blog search engine. GigaOm ranks 34th, a still impressive number given that Technorati tracks more than 86 million blogs.

TechCrunch’s impact could soon be as great as Silicon Valley’s major newspaper, The San Jose Mercury News, says Paul Gillin, author of blog guide The New Influencers. “It’s one of the first things I read every day,” says David Cowan, a venture capitalist for Bessemer Venture Partners. “It’s hard to describe the extent to which I rely on TechCrunch.”

GigaOm may not have quite as much pull, but it still has a long list of powerful readers. Malik is “a really smart guy, and he makes me think,” says Roger McNamee, a prominent venture capitalist with several Silicon Valley firms. “He’s really significant,” says Max Kalehoff, a vice president at research firm Nielsen BuzzMetrics.

It’s high praise for two blogs that started as hobbies. Both Arrington and Malik say they’re surprised at how quickly their side projects became businesses — and obsessions.

Not in any shape form or fashion trying to lump myself in their lofty category, but it’s too easy to lose sight of striking balance and trying to build a compelling online publication. I’ve been the lead blogger on this site since February 2006, that’s 15 months… 1,700 posts later I clearly see that blogging software and everything that comes with it has changed the publishing game for good. Of course, it helps when you get praise, here are some of our media mentions and press pickups. Then again, I’ve had a few other preoccupations.

The point I’m trying to make is that blogs needs to fit in an overall corporate strategy. For a blog or blog network to become a standalone business, the publisher needs to frame it in the context of: “how will I survive when the party is over?”

For us, the blogs fit in the “Context is King” mantra of creating, aggregating or indexing all types of digital content across all major categories. It helps us ride the upside but protects the unit in a downturn. With all due respect to ContentNext Media, Gawker, Weblogs Inc., Tech Crunch, GigaOm and the hundreds of other blog networks, I am not sure how many will survive. I stress not all blog networks are the same. We have a unique raison d’etre for ours in our company. But the bottom line is: once you start, you sort of have to understand that it’s a 24/7/365 kind of thing. Just ask Om:

“Sleep and I have broken up. Coffee and I are having an affair,” says Malik, cup in hand.

Hey man, no pain, no gain… (as I put down the coffee post).

“We’re making $200,000 a month in revenue. We’re super-profitable. We don’t need (venture capital) money,” he says. Yet, offers are on the table, which they’re evaluating, he says.

(…)

Malik, often known as Silicon Valley’s nice guy, grew up in New Delhi. He taught himself English by reading The Times of London, moved to the USA, and became a journalist for tech publications Forbes.com, Red Herring and Business 2.0. GigaOm was a side project.

But its readership and reputation grew, and venture capitalists began offering money. Malik resisted, because he liked being a magazine writer. But he finally accepted less than $500,000 from True Ventures.

He went full time, hired five full-time and six part-time employees, and launched companion sites, such as Web Worker Daily, a site for technologists who work from home, and guest editorial site Found+Read.

Malik is less controversial than Arrington because he has stricter rules. He does not invest in companies he covers, and is less likely to pass along rumors.

The business is not profitable, but Malik hopes it will be by late summer.

(…)

Then there’s the lingering fear that Web 2.0 could be as big a bust as Web 1.0.

Arrington wrote a much-discussed post in which he complained that Web 2.0 wasn’t “fun” anymore. Most start-up ideas are either good or stupid, Malik says. “There is nothing in between.”

Some days it’s tempting to cash out. “It would be really interesting to sell this thing for $20 million and go live in Hawaii the rest of my life,” says Arrington.

But that seems unlikely. Arrington and Malik each confess to being fanatically attached to their jobs. “I wouldn’t trade it for anything else,” Malik says.