BUSINESS BLOGS
BUSINESS BLOGS
category: business
04 Oct 2008

I am calling BS on Nick Denton.  Let me explain.

Yes, no one is immune to the economy, not even online media.  However, I think Nick Denton is using the recession and accompanying slowdown in advertising spending to cut some fat.

“Here’s the heart of it,” opens up the rising media mogul, “we are cutting 19 of our 133 editorial positions and suspending bonus payments at the start of next year.”

Methinks: 133 editorial positions?  Editorial folks.  Add some bodies in administration, sales/business development, technology and you get a big company.  Don’t get me wrong: with 20M uniques, Gawker Media deserves to have a big headcount, but Denton probably realized that he let his company’s success bloat his masthead, which is, you got it: the mistake magazines made decades ago… a mistake they never rectified, and a mistake that today explains their dire predicament.

Ultimately, Denton has “panicked” before.  The Brit native admits:

And, yes, this is not the first time I’ve predicted doom: in July 2006, when we “battened down the hatches” and closed down Sploid and Screenhead; and in April this year, when we spun off Idolator, Gridskipper and Wonkette.

But now the credit crisis is clearly going to affect every sector of the economy. Advertising buys typically plunge after the Christmas shopping season, and 2009 is obviously going to be exceptionally difficult. We have to prepare for the worst, now, rather than when the worst comes upon us.

Yes, the worst is upon us, however, things will get far, far worst for print, radio and TV before it really gets dicey for fiscally prudent and cautious managers online.  We’ve never splurged in headcount at WatchMojo.com, so guess what, we’re adding headcount, investing in new technology and attacking clients more aggressively to win business.  Mind you, we’re in online video, which is growing rapidly; whereas Gawker is in the old media of new media, text.

Regardless, my guess is that Denton will use the headwinds in the broader marketplace to let go of people that did not fare in his plans and use the opportunity to avoid making a mistake magazines did ages ago when they began to believe their own PR.

Sure: the economy is the clusterf*** to the poorhouse, but anyone with a killer instinct recognizes that now is the time to clean up shop and put the pedal to the metal.

I could be wrong, but I don’t buy any of Denton’s antics today.