You have to wonder: is Jerry Yang a hero or a goat?
Forget what you think of Jerry Yang as one-half of Yahoo!’s founding team, forget what you think of Yang as the Chief Yahoo! who saw Yahoo!’s meteoric rise and devastating fall from grace.
Forget even Yang in the over-hyped first 100 days since former Chairman and CEO Terry Semel left the company in 2007 after Eric Jackson’s crusade.
Ask yourself, however: what about Yang in the past 20 or so days since MSFT launched its unsolicited $44.6B deal.
What do the stakeholders think of Yang?
- Employees
- Users
- Clients (advertisers)
- Partners (that include hundreds of newspapers, AT&T, etc.)
- Shareholders
- MSFT (inevitably the company’s parent)
are just some of the stakeholders who will be impacted in the future. Many have been impacted already.
There have been a handful of shareholder lawsuits already. We’ve also seen an exodus of staff; the same people who MSFT Chairman Bill Gates supposedly covets.
I think that Yang has - until the MSFT bid - done an admirable job; the way he’s acted since, however, has been disgraceful. While I do respect a captain wanting to be the last to get off a boat, I don’t care much for people who sabotage a boat, either.
What Yahoo! seems to be doing is bite its nose to spite its face: the recent $1-3B severance package he so generously and recklessly doled out was the last straw for me, it was also borderline criminal, akin to someone raiding the corporate coffers knowing full well the impact of the deed.
Yang owns less than 10% of the company and unlike his peers over at Google, he does not actually own any special voting class shares. He is also not the Chairman of the Board. At what point is it really Yang’s decision when his actions adversely impact millions of others?
The last executives and founders who treated a publicly traded company like their own piggy banks ended up doing time, so as a friendly warning, someone in Yang’s camp of groupies should give him some good advice.
The problem is very few people in the Valley or in the mainstream media elsewhere dare to say any of this vocally. Everyone writes gloriously about Yang 1994-2007 but they seem to forget that Yang 2008 has been a disaster. I lost any and all confidence during the Q4 2007 earnings call on January 29th where I signed off: lawyers are drafting papers for a takeover bid; I wasn’t exactly wrong.
Silicon Valley might be an echo chamber, but it does not operate in a vacuum, the lawsuits you have seen thus far are nothing compared to what will hit Yahoo! and Yang if Yang continues this charade.
The struggling Internet firm has reportedly explored alliances with Google, Time Warner-owned America On Line, and social networking website MySpace owned by News Corp.; each potential deal stranger than the other with the resulting outcome murkier for shareholders.
What I’d like to do as a Yahoo! shareholder and user is see Yang come to the realization that the company he founded has run out of options the day MSFT checkmated it with a $31/share offer; he can take some time to come to that realization, but sooner or later, the energy he is spending on dead ends and potentially litigious pursuits he should be devoting on how to maximize the final sales price MSFT is willing to pay, how best to mitigate any risks and integrate the companies.
At this rate, however, it won’t be too late before Yang is pulled from the mound to make room for someone who understands the stakes in the game.
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WatchMojo NewsletterPiczo is a UK-centric social networking site for teenage girls. I had never heard of Piczo until recently, but then again, I am not a teenage girl (hear me roar!).
Apparently, Piczo has hit hard times: users are fleeing, executives are leaving, advertisers are balking. The problem is, with many of these sites, advertisers never really signed on in the first place. That’s definitely not a reflection of the people in place to sell ads at Piczo who I am sure are all pros; but their challenges are symptomatic of user-generation sites that have never proven the hypothesis that advertisers will flock to them because they have large audiences.
What do Marketers and Advertising Agencies Look For?
In my experience with ad agencies and marketers, generally speaking, media planners and buyers look for six things, these are:
1- Audience size
2- The right demographics
3- Brand equity
4- Content they can feel comfortable with and projects positively on their brand
5- Other strong advertisers that are advertising on the site
6- Experience, comfort and familiarity with the people or publisher in question.
These user-generated content platforms simply don’t make the cut despite all of the audience in the world, they lack some or all of the other things.
But because of how many of these social networking sites are propped, a lot of things can go wrong, quickly.
Of course, it doesn’t help when audiences aren’t there or leaving, either. As audiences jump from one social network to another, sites are forced to open up to a wider audience demographic, which hurts in the long term, because advertisers generally look for a high concentration of their targeted demographic.
I have no idea how Piczo will fare, but this general storyline will be a recurring one in 2008, partially because the tight credit markets make funding more challenging for ad-supported business plans that don’t capture ad dollars.
Investors just won’t have the appetite to put more money into these “advertising maybe” plays. Revver sold for 35% of the funding it got.
This is a result of three things:
- advertisers don’t want to advertise on social networks
- VCs didn’t understand advertising when they invested these business plans, and with tight credit markets, they won’t invest any more, because they are already moving on to greener pastures.
- Overfunding in many of these companies forces them to go too big, too fast, diluting any actual value proposition to users, marketers and partners.
But because these companies have raised a lot of money, they hired plenty of people and probably assumed that their sales people could get the job done. I spoke to one sales person at one such company who asked to remain anonymous.
There’s a chain reaction:
Salespeople, naturally ones to promise a lot, went along with the big assumptions, until they hit the pavement and talked to ad agencies, got feedback and realized that marketers won’t exactly jump on board of these social networks based on audience size alone.
They want a few more things, one of which is “content surety” and another one is seeing other advertisers take the lead. Advertisers, like VCs, suffer from herd mentality, too.
It becomes a vicious cycle, because then Piczo’s (for example) backers see the growth rates of Bebo and Facebook eat into their audience sizes, so they then move from being niche sites (in Pizco’s case reaching teenage girls) to more general ones. What happens then is that advertisers who wanted to reach teenage girls and were considering making ad buys all of a sudden see a more general audience with a diluted teenage girl concentration… and then they balk.
This becomes a downward spiral as sites try to boost revenue in any way possible, forcing users to go elsewhere.
The same thing happened in the video space a few years ago when leading content producers got YouTube envy and dived into UGC:
- Bolt.com took a UGC turn and then died;
- ManiaTV also took a UGC turn last year but then did a 180 degree turn and went back to producing content.
All in all, content is king. Any site that does not actually have content is doomed to fail. Thankfully, there are a dozen or so content producers out there (and yes, we’re one of them, and one of the larger ones) and media companies are moving more and more of their libraries online (they’re not always doing it in the right way, but as a first step, it’s a welcome sign). I hope that many of these sites like Piczo, Revver et al. can position themselves in a way that helps them stay around because they have built decent-sized audiences and while the value thereof remains to be seen, when there is an audience, there is usually some kind of value.
Yesterday, BubbleGeneration’s Umair Haque set off a storm by suggesting that tech blog networks are peaking. I agree that the signal-to-noise ratio in the technology blog network space has gone down considerably. While many of these blogs are hiring from traditional media, established publications are firing back with their own blogs and blog networks. CNET for one has been very aggressive, even appointing blogger Dan Farber to become editor in chief at News.com (of course, Farber is so much more than a mere blogger).
In fact, in the past year, many of these technology blogs have gone from being a one-site, one-man operation to a multi-site property hiring large operational and editorial teams. In a few instances, companies have even raised considerable funding. The quest to build an audience and generate ad revenues has pitted many of these sites in a competitive and cooperative dynamic that might indeed suggest that most of these sites have peaked.
Due to the entrepreneurial nature of the people involved, I doubt that these sites will disappear. Given the shift of ad dollars and audiences online, I am sure they won’t.
However, clearly many of them will have to reinvent themselves and adopt new strategies to remain relevant. Let’s face it, particularly since Gabe Rivera unleashed Techmeme.com, a lot of the content being published on many of these sites has become a carbon copy of one another.
This is commonplace: at the beginning of the 20th century, America had hundreds of car companies; by the end of the century, there were three major ones. The point is, expect considerable competition to give way to consolidation, transformation and inevitably, extinction.
Before we get death threats, bear in mind that there are are hundreds of blogs networks and millions of blogs. No human being or team can go through all worthy networks. By all means suggest blogs and networks that you read, recommend and respect in the comments.
In this first post, we look at technology-oriented blog networks OR funded blog sites on the cusp of launching networks. We run them down and assess their strengths, weaknesses and long term prospects.
8 - Silicon Alley Insider
It’s hard to compile such a list and not give Silicon Alley Insider its fair share of credit. Self-proclaimed “disgraced stock analyst” Henry Blodget came out of his hibernation on Internet Outsider. Proving that everyone was into open sourcing everything these days, Blodget took his signature research and sensationalist style and unleashed a free blog with a lot of potential.
But it wasn’t until he teamed up with former Doubleclick CEO Kevin Ryan and former DoubleClick CTO Dwight Merriman to launch Silicon Alley Insider that Blodget was back with a vengeance.
In less than a year, Blodget has leveraged the name and skills that made him the world’s highest profile - and arguably highest paid - analyst into a site that has injected a much-needed dose of strategy, analysis and East Coast perspective to the landscape.
- Tale of the tape:
According to Federated Media, John Battelle’s company that represents advertising inventory on many of these sites, SAI does 1,160,000 pageviews.
- From being a one-man shop to an actual company:
Blodget remains the star of the show, for sure, but he deserves credit for lining up some interesting writers, including Forbes technology writers Peter Kafka and Dan Frommer, as well as .
We have personally been very bullish on SAI from the beginning for no other reason that its mission of “serving as the voice and resource for the wider digital business community, SAI covers the intersection of the technology, media and communications industries” is awfully akin to our own desire to go beyond covering the latest widget launch and instead offer readers analysis that sits on the crossroads of Main Street, Madison Avenue, Wall Street and Silicon Valley (pardon our shameless plug and delusional sense of grandeur, by the way, but the similarity is considerable, no?).
Judging by the second part of its mandate: “with a particular focus on companies and people making waves in New York,” SAI has joined Allen Stern’s Center Networks with excellent NY-focused coverage. In fact, the two sites are very complementary in that Center Networks has more of a technology skew while SAI covers finance and advertising a bit more. Combine the two and there’s a reason the city was named twice.
- From property to network:
While SAI remains a one-site media company, make no mistake about it, SAI is ambitious and planning much more, as evidenced by its hiring page. We are thus including SAI on this list, because very much like Venture Beat that has raised funding, despite being a one-site pony, this dark horse has a lot of upside and the wherewithal to give existing blog networks a run for its money.
- Focus: mass vs. niche:
Time will tell just how much SAI will evolve. But being based in NYC, the opportunities are endless. We presume the company’s focus will remain on business, but the applications therein remain interesting.
- Long term business opportunities:
Blodget has already lined up online video via regular appearances on Yahoo!’s Tech Ticker. This might explain Blodget’s cheerleader role for the troubled media company, but the fact remains, of all of these companies, this affiliation does give Blodget and by extension SAI an edge in online video even though SAI does not own any of the IP of the Tech Ticket video library. Whether or not Yahoo!’s Tech Ticker will go anywhere, time will tell… but Blodget’s double-edged star status and brand name will open up doors for the company.
- Revenue potential:
While SAI’s revenue potential remains interesting by virtue of being based in NYC (capital of advertising world), we see SAI far more as a play for influence and authority than a pure money grab.
We must say, given that SAI is based in NYC, we’re somewhat baffled by their choice to go with Federated Media, though we presume that the arrangement is for West Coast representation, mainly.
- The traditional publisher it reminds me most of is…:
Forbes (SAI 100, SA 25 etc.).
- Exits:
Business Week, Forbes, CNET, TheStreet.com. I do see SAI as a consolidator of some of the other blogs out there, for sure.
7- Read Write Web
- From being a one-man shop to an actual company:
To his credit, McManus gets top grades for bringing in new writers who all are knowledgeable in the space, Marshall Kirkpatrick, Josh Katone and Alex Iskold are all extremely insightful in their own right, and network writers Steve O’Hear and company all know their categories. O’Hear produced the documentary In Search of the Valley which chronicles Silicon Valley’s origins and provides a fantastic overview into what makes the Valley so unique and legendary. Kirkpatrick built a loyal following on Tech Crunch before venturing into a PR role at Splash Cast before being lured by McManus.
- From property to network:
- Focus: mass vs. niche
- Long term business opportunities:
Clearly it is smarter to have publications covering video and search, but I wonder how popular those will ever become relative to RRW. Regardless, he has developed a good base of writers, a stellar reputation and been around long enough to be able to survive any ups and downs. I do not think that McManus should over extend himself and reach dozens of blogs, however, he needs to ensure that online video and search are as strong as the weakest links in competing tech blogs spin-offs (which compete with RRW, basically).
As an intangible, the company should be able to create conferences in South Asia and the Pacific and be able to generate enough interest from Europeans and North Americans looking for an opening in the market, sort of like a bridge between East and West.
In fact, McManus’ home base gives him a leg up on the other blogs (when news comes out late at night or overnight in North Ameirca, it’s the middle of the day down under).
- Revenue potential:
Due to the proximity to Asia, pretty decent. But as a tech blog network, it needs to articulate what advertisers get over the competition. That remains a challenge given its size.
- The traditional publisher it reminds me most is…:
6- Venture Beat
- About the Founder:
Venture Beat is not a blog network (at least to the best of our knowledge) but having raised $320,000 in angel funding from a powerhouse roster of investors that includes ex-Googlers Georges Harik and Aydin Senkut, Mike Brown (Foundation Capital), MHS Capital, Amidzad and the White Sand Group, it certainly should be included in the landscape of professional blog networks, regardless of whether it goes from being one site to a network of sites.
VB was founded by Matt Marshall, who covered venture capital for the San Jose Mercury News until he left in September 2006 to launch VentureBeat as an independent company. The site was initially called SiliconBeat but has expanded to cover more financing news, hence the change in moniker.
A PhD in Government and an MA in German and European Studies from Georgetown University, Matt was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 through 1998. In 1999 he wrote a book while in Germany, “The Bank: the Birth of Europe’s Central Bank and the Rebirth of European Power” (published by Random House, 1999). He has also written for the Washington Post and several other publications.
- From being a one-man shop to an actual company:
Marshall bootstrapped the company early on and remained the site’s voice, but he did hire interesting writers such as Eric Eldon and recently lured Dean Takahashi of the Mercury News (along with his $120,000 annual salary) thanks in part to that $320,000 funding round.
- From property to network:
Unlike the other networks, VB has focused on financings and we think this razor sharp focus will help Marshall remain differentiated. Yes, in the short term he might not get the kind of advertisers that might land on other networks, but the truth is that most of those deals are coming from Federated Media (so they are being sliced up considerably as is) and he is better off becoming the “must-buy” site for professional services firms (law, accounting, VC firms) and select companies instead of fighting for the pieces in technology like the others do.
- Focus: mass vs. niche:
It should be noted that VB is also adding a lot of features (Venture Board and Job Board) that other sites like Tech Crunch launch as separate destinations. Frankly, given VB’s smaller traffic and niche nature relative to Tech Crunch’s massive audience and reach, the different strategies are actually each correct for each site.
- Tale of the tape:
According to Federated Media, Venture Beat generates 470,000 pageviews per month.
- Long term business opportunities:
Naturally, VB can plan a few conferences and charge a bundle.
A decision the company will have to make is to launch subscription-based services to generate more revenue and diversify or it can seize the opportunity to shrink many of the markets in which VB’s traditional competitors compete in, it can do so by taking advantage of its lower cost base to offer for free what competitors need to charge for.
In fact, it can even undercut its online competitors / complimentary services such as TheFunded.com or Dealipedia by leveraging its audience. Over time, I can actually see VB raising money and acquiring some of these services.
- Revenue potential:
The revenue will be recurring and stable because professional services will line up to advertise, but it won’t be exponential. Like everyone else, there will be considerable conference opportunities for VB, that is for sure. Eventually, I see VB favoring subscription services because its readership will consist of many businesses who don’t mind forking over recurring fees for accurate information on the market.
- The traditional publisher it reminds me most is…:
Crain or Thomson Financial, actually, units thereof.
- Exits:
It won’t be long before VB is acquired. After all, the instant outside money came in, an exit is required. That exit won’t be an IPO, but we see an acquisition by someone interested in the professional services market. We even see News Corp. potentially making a run to compliment WSJ as it looks for more financial real estate (especially since it now plans to wisely keep WSJ behind a paid wall).
Acquisition by Thomson, Crain, Pearson, TheStreet.com, CNBC or News Corp. for either WSJ or FOX Business.
5 - Mashable
In the summer of 2005, Pete Cashmore bet on black, and he struck gold.
A few months before launching Mashable as a blog covering social networking, News Corp. acquired MySpace’s parent for $580M. That deal created Fox Interactive Media, but more importantly, it ushered an era of unprecedented investment in so-called social networking concepts and companies. While Michael Arrington was covering it all from Silicon Valley, Pete Cashmore was returning the favor from London.
Over the next three years, both sites have grown to become synonymous with Web 2.0 and social networking respectively.
- From being a one-man shop to an actual company:
Admittedly, nowadays you have to look hard to find a new post penned by Pete Cashmore; indeed, much of the posts come from contributors Mark Hopkins, Kristen Nicole, Adam Ostrow, Tamar Weinberg and company, but this has allowed Cashmore to build a comprehensive company around Mashable.com.
- From property to networks:
Admittedly, Cashmore is a new media maven who has proven his chops by maniacally focusing on one site, Mashable, while many of his counterparts have taken a multi-site approach to brand and company building.
By leveraging the popularity of the site and goodwill he has generated, Cashmore complements Mashable.com with consulting services as well as bells and whistles services that turn the site covering social networking into a social network of its own.
- Focus: mass vs. niche:
Admittedly, Mashable is a big play on social networking. While a lot of companies, products and services focusing on social networking have come and gone, Mashable remains the shovel and helmet supplier equivalent of the space. While 99% of social networking sites will bomb, all 100% of services in the space (including the 1% that succeed) have to go through Mashable. For that reason, Cashmore’s razor sharp focus on social networking is actually genius.
- Tale of the tape:
Federated Media’s site gives Mashable 5,170,000 pageviews. Clearly Mashable is a large blog and bills itself as the largest one covering social networking.
- Long term business opportunities:
Cashmore already seems to have diversified away from a pure-publishing and advertising model to one that includes consulting and what not. I am frankly not sure how meaningful those businesses are, but the mere suggestion that they are additional product lines is important as it gives Mashable a greater sense of value.
Despite its sole focus on social networking, the fact is that social networking itself is not a fad, media has gone social so Mashable has a chance to galvanize the coverage thereof. In light of Tech Crunch’s increasing reach and scope, Mashable has the opportunity to become the leading brand in the specific space, in fact.
- Revenue potential:
Given Mashable’s audience and size, it can generate decent revenues from advertising alone but clearly, if Cashmore can build up a real consulting business around the brand, the advertising business can look pretty small next to the services business… especially if he finds as many consultants to match his roster of writers.
- The traditional publisher it reminds me most is…:
Any publication that is issued by a professional services organization.
- Exits:
Depending on how meaningful Cashmore can make the consulting business, Mashable has various growth opportunities, and as such, numerous exit routes, too.
4- GigaOm
- About the Founder:
I’ve personally met Giga Om founder Om Malik a few times and certainly consider him a friend and mentor. The man knows publishing, technology, new media… and common sense. With that being said, Malik came to NYC in 1993 to write for venerable Forbes. He’s also written for Red Herring, Business 2.0 along with occasional writings for the Wall Street Journal and Crain’s NY Business. Incidentally, not many people know this: but he was, briefly, a venture capitalist.
I think this gives Malik an interesting appeal as a writer, because he surely does not regurgitate press releases and spew the company pitch. Malik will tell you what’s on his mind. He’ll tell you if something seems off or fishy.
- From being a one-man shop to an actual company:Malik has managed to use his network of writers - and True Ventures’ funding - to lure many talented writers. Liz Gannes and Chris Albrecht are very good writers, but I am biased because I read some of Malik’s blogs more than others. He has an impressive roster of full-time and part-time writers that certainly give Malik a lot of points in this category.
In fact, in December 2007, Malik suffered a heart attack, he has recovered but the fact that his company did not miss a beat speaks volumes about the team he has put in place. In addition to the staff of writers, it should be noted, GigaOmMedia’s operational bench is also second to none.
- From property to network:
Malik’s blogging empire includes
- GigaOm: broadband and telco news,
- WebWorkerDaily: productivity at the office
- NewTeeVee: online video
- Earth2Tech: admittedly a play on the burgeoning Green herd mentality (hey, he was a VC at one time)
- FoundRead: a sort of editorially curated bookmarking site, I presume.
- Focus: mass vs. niche
Clearly the sites in Giga Om Media’s network have a penchant for broadband, which is what Malik’s background lies in. I do not see Malik ever branching out to lifestyle, for example, and I’m not sure anyone wants them to, either.
- Tale of the tape:
According to Federated Media, GigaOm (the site) generates 1,250,000 pageviews/month, round it up to 1.5M-2M for the entire network.
- Long term business opportunities:
Clearly an actual publishing business already, I see Malik emulating Rafat Ali and adding country-specific sites as well to go deeper into the sectors they cover.
- Revenue potential:
Limited to technology and consumer electronics, but by virtue of these being big enough categories and his readership being extremely valuable, GigaOmMedia will do fine. The CPM he can charge are probably considerable. As a wise man once said, The Economist does not need to publish a 200-page magazine to generate boatloads of money. Neither does GigaOm.
- The traditional publisher it reminds me most of is…:
Fast Company, Industry Standard, Ziff Davis
- Exit:
Despite all of the talk that one day CNET might buy Tech Crunch, I see some considerable personality conflicts before the lawyers are even called in. However, I certainly see CNET making a run at Giga Om. I could be wrong because CNET has a lot of writers and GigaOm has a lot of writers…
3- Tech Crunch
- About the Founder:
Michael Arrington launched Tech Crunch in 2005 to cover Web 2.0 startups. A former corporate attorney, Arrington has an interesting career that spans law firms and jobs in business development/counsel roles in the domain name industry in the US and Canada.
According to Google, over 14,000 other sites link to TechCrunch, and Technorati says TechCrunch is the 16th most influential blog in the world. Named ‘Best of the Web 2006′ by BusinessWeek.
- From being a one-man shop to an actual company:
Tech Crunch is synonymous with Michael Arrington, no doubt. Of all of the networks, Tech Crunch faces the biggest risk of not being able to go from a one-man show to a cohesive unit because TC’s coverage was never objective nor abstract, it was always subjective and personal, coming straight from the gut.
As such, striking the same balance with new writers will always remain a challenge.
To his credit, Arrington has surrounded himself with a cornucopia of talented writers over the years, including Marshall Kirkpatrick in the early going. Today he employs blogging pioneer Duncan Riley and has even managed to lure Erick Schonfeld to the cause; Schonfeld is a gifted and experienced writer who has become his Co-Editor. Yes, I know, that title will have to change over time if Schonfeld is to remain part of the team in the long-run. I think Arrington realizes that, but also recognized that he could not set Schonfeld up for failure by bringing him on and appointing him Editor from the get-go.
- From property to network:
Tech Crunch remains the 800-pound gorilla in the industry, let alone within Arrington’s empire… but he has nonetheless churned out TC UK (who itself has had an interesting history, especially in the backdrop of the TechNation debacle), along with CrunchGear and MobileCrunch. Personally, I’ve visited the other sites all of 5 times, but that’s my shortcoming and not a result of the writers. In fact, it makes total sense for Arrington to have carved out those two sites.
I must say that his CrunchBase database listing companies’ has potential to be something interesting, though given the state of flux of most of the “companies” TC reviews, I find that it might turn out to be a perennial distraction too. Certainly give his team props for trying to do something out of the box. All in all, I like it and hope it survives and develops; it sure beats its inital incarnation (TC readers will know what I am referring to).
- Focus: mass vs. niche
Tech Crunch is actually somewhat focused but it has no doubt gone from covering startups to covering startups and established companies, no doubt. Tech Crunch’s massive success dwarfs the other sites: there’s a UK version, along with spinoffs in mobile and consumer electronics, there’s also Crunch Notes which gives a glimpse into the sojourn of launching a publication online and the challenges of startup life… In all fairness, Crunch Notes occasionally provide good fodder but is usually a big echo chamber with details I am unaware of, but that, once again, is not a knock, just an observation.
While many have pointed out that TC does not represent consumer trends and is in fact very niche, the simple fact is that it’s grown to be the largest “niche” site, with over 500,000 RSS subscribers.
- Tale of the tape:
Tech Crunch is the king of pageviews amongst this peer group, with 5,510,000 pageviews per month, according once again to Battelle’s Federated Media.
- Long term business opportunities:
Some days, I think TC founder Michael Arrington will burn out, others I think he is on his way to becoming a cross between Bob Guccione Jr. meets Roger Penske. Puh-lease let me explain.
He reminds me of Guccione Jr. simply due to the Axl Rose affair where he was willing to step into the ring and actually fight Rose after the Guns ‘n’ Roses front man called him out in Use Your Illusion’s Get in the Ring. Bear in mind, while Rose had the tough guy persona, Guccione Jr. had been taking karate for a decade. That’s right, Rose backed down. In some ways, Arrington does not back down from anyone, regardless of the merit of the debate and independent of whether he’s right or not.
Why Penske? Penske was a great driver who risked his life every week at races. Eventually, someone made him realized that his time - and life - was better spent making deals and what not. So Penske gave up the driver’s seat for the business duties. I am not sure if Arrington is Penske or the anti-Penske because as a lawyer and entrepreneur, Arrington’s track record is not as impressive as his track record as a writer and publisher is, so maybe, he should hang the legal briefs and business plan and simply write his heart out. Legend has it that he would blog away at his desk until he literally passed out.
That’s something I went through when I wrote my second book (on Alexander the Great) in 6 days in 2004, the difference was, I did that for 6 days and realized I did not want to do it 24/7/365… Arrington seems to have done it for two years so he deserves a lot of credit for his stamina, persistence and determination.
All to say, Arrington’s legacy remains to be seen: time will tell if he is Priceline or Pets.com, but like both Penske and Guccione Jr. the man is a fighter and takes no crap. Agree or disagree with him, I like that about him and despite the warts estimate that he will be around in one form or another for years and decades to come.
- Revenue potential:
One word: considerable.
Tech Crunch not only has a solid readership in terms of quality of its audience, but it has racked up considerable media mentions, something that sways media buyers looking to spend ad dollars. Lastly, Tech Crunch’s relative high audience ensures that it can actually earn ad dollars, too. Admittedly, 5M pageviews is tiny by maistream publishing standards, but for a blog that was largely a one-man operation for its first year of operations, it’s pretty impressive.
Tech Crunch has already branched off into events and conferences.
- The traditional publisher it reminds me most is…:
Industry Standard meets Red Herring with a dash of Penthouse (if we are to continue the Guccione example, after all).
- Exit Strategy:
Well, Henry Blodget has already pointed out the inevitable CNET possibility. I’d also throw in News Corp. for no reason other than Tech Crunch’s CEO Heather Harde was a dealmaking maven at Fox Interactive Media…
2- Content Next (Paid Content)
- About the Founder:
Rafat Ali launched Paid Content over five years ago so that he could showcase his writing skills in the hope of getting a job. At a time when companies were laying off writers and new media was the butt of the joke, Ali hustled and beat everyone to the story. Today, he sits arguably at the top of the echelon in the industry’s leading publication covering media.
- From being a one-man shop to an actual company:
Gradually, and we mean gradually, Ali has hired a wide array of writers. Today he is backed by Staci Kramer as Co-Editor (Ali remains Publisher and Co-Editor). CNM employs numerous writers that include David Kaplan, Joseph Weisenthal and company.
- From property to network:
After launching a site devoted to wireless news, MocoNews.net, Ali proceeded to scale his network by going against the grain: instead of slicing up the topics by segment, Ali seems to be focusing more on geography now, with sites in the UK and India, dubbed ContentSutra.com. Both sites have strong writers under the leadership of Robert Andrews and Nikhil Pahwa respectively.
- Focus: mass vs. niche:
Context Next Media’s focus remains media, and with the line between old and new media becoming blurrier and blurrier, we think that the B2B and B2C topics up for grabs for Ali across the numerous geographies should represent considerable upside over time. When the dust settles, Ali will have built a mainstream brand.
- Tale of the tape:
One of the few sites not repped by Federated Media, I suspect CNM does about 4M pageviews per month, though the company’s mailing list is the real gem and crown jewel. The number of media executives, bankers, investors and entrepreneurs who start their day with Paid Content remains very high, even since Gabe Rivera launched his genius TechMeme product.
- Long term business opportunities:
Considerable.
Ali has built the top brand in the space, the WSJ or Fortune of online media. The hustle, determination and can-do attitude at a time (when he launched) when few took him seriously (by virtue of the industry’s mood) are sources of motivation for any entrepreneur, writer and aspiring publisher. What Ali has been able to do, out of LA (so much of what he covers is NY-centric, which is three hours ahead of LA!) is simply amazing. Today, of course, Content Next Media is fairly global.
The company has also brought in an impressive operational team and is backed by the dean of venture capital, Alan Patricof, whose Greycroft Partners invested in CNM in 2006.
- Revenue potential:
You don’t need to be an advertising guru to realize that Paid Content is printing money. The site boasts about sponsorship packages which shun CPM-pricing models, signaling that business is booming at CNM. The company’s conferences and mixers are adding velocity to the company’s top line, and with a lean structure (the company only last year got an actual office), we’re sure that the bottom line is healthy, too. Lastly, the site has in the past tinkered with reports and studies, but seeing Ali give some of these away suggests that the company is - like most publishers - looking for more ad-supported inventory and not seeing the kinds of return in subscriptions as it is in advertising.
- The traditional publisher it reminds me most is…:
Variety and Fortune meets Playboy. Let me explain.
Variety is quite simple: what Variety is/was to entertainment news, Paid Content is to media news, which is always related to entertainment.
Why Playboy? Well, Hugh Hefner worked at Esquire, asked for a $5 raise and didn’t get it. When Esquire moved from Chicago to NYC Hef stayed behind and launched Playboy. Today, the rest is history. In the same vein, Rafat could not land a job five years ago yet today he is the first to report on job changes, industry news and mergers and acquisitions that change the landscape.
Why Fortune? Well, Fortune is the Cadillac of publications in the space, and online, Paid Content remains the gold standard.
We’re not saying that Paid Content will never be dethroned, in fact, it’s close on any given day. But much the same way that people like Henry Luce revolutionized the print industry, Rafat Ali deserves just as much credit for changing the online space… so there’s a hint of Fortune, too. I’d also toss in Dow Jones, for a few reasons: seeing Ali hold court at the Waldorf=Astoria, interviewing Gordon Crovitz (the publisher of The Wall Street Journal) at the recent Future of Business Media conference, I could not help but think of the common lineage between Dow Jones - once a humble newsletter - and Paid Content, whose newsletter wakes up hundreds of thousands of readers every day from Mumbai to Madison Avenue.
- Exits:
WSJ, Time Warner, CBS (Marketwatch founder Larry Cramer sits on his board, he was formerly President of CBS Digital before Quincy Smith came on board. Read our “meritless post” on this last rumor here).
1- Valleywag, part of Gawker Media
- About the Founder:
Frankly, it’s hard to talk solely about Valleywag and not put it in the context of the Gawker Media network, since that’s the point of the post. As such, it’s worth noting that as a blog network, Gawker Media is the GE, MSFT, Google, Facebook, etc., of its space.
Founder Nick Denton was always a step ahead: an Oxford educated former journalist for The Financial Times, Denton did the whole business networking thing before it became common place (First Tuesday), content syndication (Moreover) and then blogs before Movable Type conjured anything other than Johannes Gutenberg’s printing press.
Denton’s net worth has been estimated at over $250M, fueled by the sale of First Tuesday and Moreover, as well as his holdings in Gawker Media, which he funded with his own personal money.
- From being a one-man shop to an actual company:
While Gawker Media is synonymous with Nick Denton to those in the industry, to its readers, I doubt that it is, and this is key. Since its inception, Gawker Media has lured and developed more writers than most established publications.
- From property to network:
If we’re going to ask how well Gawker has gone from a property to a network, we need to start not with Valleywag, but with Gawker, the flagship property. As of January 2008, Gawker’s sister sites include 15 different weblogs, including Defamer, Fleshbot, Deadspin, Wonkette, Lifehacker, Gizmodo, Consumerist and Kotaku… oh, and Valleywag.
- Focus: mass vs. niche:
We might be repeating ourselves, but Denton has cornered the market. No other blog network can match the brand equity Denton’s blogs command, offer the audiences he can offer across as many verticals that Gawker can. Especially once Time Warner bought Weblogs Inc. for $25M, Denton’s Gawker Media became one, if not the most valuable and sought after privately held publishing company in the world, which just happened to be powered on blogging software.
- Tale of the tape:
Denton is notorious for publicly announcing the traffic on his sites. Gawker Media’s traffic is heads and shoulders above all other blog networks.
- Long term business opportunities:
Gawker can - if it has not already - enter merchandising, movies, and even, dare we say it, print (though we doubt it will).
It can also have a sizable and interesting mobile business. Of course, to do that, it needs a better grasp of video opportunities, which all of these companies generally fare poorly in.
- Revenue potential:
The estimates are all over the place, but in my opinion, the company currently does $20M in annual revenues (or just under $2M per month on average, I suspect its strongest month is November when it does about $3-4M in revenue). That figure is very feasible given its traffic, brand equity across all sites, demographics and the proximity to Madison Avenue…
It is conceivable for Gawker Media to become a $100M in annual revenue company within 10 years, if not sooner. With 20 blogs, that’s only $5M each per year, a rather attainable figure. Flesh out the more seedy sites like Fleshbot and adjust accordingly upwards for premium categories like Gizmodo and you will see that it’s not very hard to command a revenue figure that impressive.
- The traditional publisher it reminds me most is…:
Hearst or Conde Nast.
- Exits:
While founder Nick Denton says otherwise, this is a no-brainer: News Corp., Time Warner, Hearst or Conde Nast. Though Time Warner did buy competitor Weblogs Inc., and is looking at unloading all non-network AOL properties and content sites.
Ultimately, however, I see Denton refusing to sell and becoming the Hearst or Conde Nast himself. Mind you, the revenues might not come close, but in terms of mindshare and relevance - particularly online - he’s almost surpassed them.
CONCLUSION
We hope you enjoyed this list of tech-focused blog networks. All right, now like any self-respecting blogger, bash away.
Upcoming posts to come include:
- Top VC blogs (ex: AVC, Paul Kedrosky, etc.)
- Stand-alone blogs to watch out for in 2008 (ex: TechDirt, Alarm:Clock, Center Networks, Daily Tech, Laughing Squid, Gaping Void, Lost Remote, etc.)
- Big company blogs (ex: Boomtown, Tech Trader Daily, Business Week, CNET, Betc.)
- Entrepreneur blogs (ex: Jason Calacanis, John Battelle’s Searchblog, Max Levchin, etc).
Suggestions are welcome for all as we formulate those lists.
Editor’s notes:1 - Weblogs Inc., whom Time Warner acquired was excluded from the list by virtue of not being a privately held company, but surely deserves consideration on this list but will probably pop up in Big Company Blogs.
2 - Moreover, I suppose it is worth mentioning that HipMojo.com and the Blogger Mojo network are directly / indirectly competitive to some / many of the sites mentioned above.
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