MySpace today fired 500 of 750 employees internationally. This is on top of the 500 people they fired from a staff of 1,000.
I know the idea of starting a company and opening offices is growth, revenues, job creation and profits, but you cannot encourage entrepreneurship in an environment where laying people off is impossible and so punitive to the employer.
Unlike our recent domestic restructuring announcement, what we are announcing today is a formal proposal we intend to implement, rather than an executed plan. As required by laws in countries where we operate, we will not implement the plan until we have consulted with potentially affected employees.
Read more.
I want to run this man’s fan club, seriously.
Russia’s answer to Michael Arrington, search engine Quintura’s CEO Yakov Sadchikov comes across some interesting figures on the Russian online advertising market, estimated at $260 million from January to June 2008. This is up 73% year-over-year, according to a report from MindShare Interaction. More interestingly is the fact that contextual advertising accounted for $161 million (or 62% of total online advertising spending), while display advertising accounted for $99 million (38%) of total online spending.
The business daily Kommersant breaks down the top 10 online display advertisers in Russia, including:
- Ford Motor Co. ($4.6m),
- MTS ($2.5m),
- Megafon ($2.3m),
- General Motors ($2m),
- VimpelCom ($1.9m),
- Peugeout Citroen ($1.6m),
- Nissan ($1.5m),
- Samsung ($1.3m),
- Honda ($1.2m), and
- Procter & Gamble ($1.1m).
Partially because I was born in a Russian-built hospital in Tehran, I’ve always been somewhat interested in Russia, its history, and its recent resurgence. The country is a fascinating story in the re-making, what with the rumors surrounding outgoing President Vladimir Putin’s massive fortunes, and the stratospheric rise the country’s fortunes have experienced of late. Consider some stats I came across:
The average monthly Russian salary was:
- $200 in 2003,
- $303 in 2005,
- $545 in 2007.
according to Kommersant and Pravda. Obviously, there’s plenty of upside.
And that’s for the average employee, as in all countries, the highest earners earn far, far more. A CEO earns $150,000 per annum, or just over $10,000 per month, according to this report, and that was 2007, I suspect it’s gone even higher.
In fact, the top CEOs get up to $24,000 per month, according to this.
Connecting the dots: as Russia’s massive population - which a few short years ago was showing troubling demographic signs - increases its purchasing power, expect online advertising rates to follow suit. Here’s comScore’s Top 10 Russian sites:
Is this math correct? Who knows… but YouTube and Google’s legal team sure is busy these days:
Gestevision Telecinco SA, a Mediaset unit that owns Spain’s most-watched TV station, sued YouTube last month for copyright infringement and illegally posting its video content on the Web.
According to a sample analysis run by Mediaset on June 10, at least 4,643 videos belonging to the company were found on YouTube. That equals more than 325 hours of broadcasting without corresponding rights, the company said.
Mediaset claims that, based on the number of its clips available on YouTube and the hits generated, the broadcaster lost the equivalent of 315,672 broadcasting days.
The claim of 500 million euros corresponds to “immediate damages,” Mediaset said in the statement. Lost advertising revenue linked to the videos may add to the amount of compensation demanded, Mediaset said.
The Louvre has sold its name to an Abu Dhabi group that will recreate a satellite museum in the desert:
The Abu Dhabi initiative has stirred an uproar in French art circles. “It’s scandalous,” says Didier Rykner, an art historian who has collected more than 5,000 signatures—including some former top Louvre curators—on a petition opposing the plan. Critics say such megadeals make it harder for less wealthy museums to obtain art on loan. Loyrette says the Louvre still lends individual works free of charge, but for exhibits drawn exclusively from its collection, “we ask for a fee, which is perfectly normal.”
The Louvre can’t afford to sit still, he says. The French government now covers only half of the museum’s $350 million annual budget, down from more than 70% when Loyrette took over in 2001. “We are expected to find private funds for new initiatives,” the lanky, 56-year-old art historian says in his office, where the antique furniture is piled high with art books and catalogs. He’s doing just that. On July 17 the Louvre broke ground for a new Islamic-art wing that includes $54 million in financing from Saudi Prince Alwaleed bin Talal and French companies.
Admirers say Loyrette’s freewheeling intellect and personal charm make him an almost irresistible fund-raiser. Harry Fath, owner of a Cincinnati property-management company, met Loyrette at a reception and invited him to Cincinnati. Loyrette accepted and spent a weekend with Fath and his wife, chatting about opera, enthusing about the city’s architecture, and giving a talk to the local art museum board. “By the end of the weekend, I gave him a check for $50,000,” Fath says.
That’s one helluva’n effective houseguest!
Question from reader…
Q: Do you think Microsoft and other investors invested in Facebook at a lower valuation than the reported $15B?
A: Yes and no.
I think MSFT invested at the $15B valuation, but then the Samwer brothers and Li Ka-shing probably managed to get their stakes at a lower valuation. However, to pull this off, the transaction had to be delicate. I am not reporting on any so-called sources or anything, just my two cents and common sense: “smart/strategic investors” always try and sometimes get discounts. I think to get into Germany and China, I could see Facebook giving someone a lower valuation… but by lower, I do not see it being less than $10B. In fact, I don’t even think the valuation per se was $10B but the same $15B. What Mark Zuckerberg should have done, if he were as shrewd as some make him out to be, is to get the Chinese and German investors agree to $15B but then get an additional 25 or 33% options if they hit certain milestones…
This way, MSFT does not feel like they are fleeced - for they too are a strategic investor - but it gives Mr. Li and the Samwer brothers an incentive to drive Facebook’s entry and penetration in China and Germany.
So to answer your question, yes and no.
I think Europe could surpass the US ad market if for no other reason that different markets means different languages and different ad campaigns. In other words, it’s harder to find efficiencies when you have to duplicate the same message across 10 or so sub-campaigns.
According to IAB, Europe added 4B Euros year over year, I do wonder what factor the USD/Euro exchange rate had on this:
Obviously, the conversion matters. From 2000-05 I took a company from $0 to $10M sales… in USD. We were based in Canada and with the USD/CAD at 1.5, that was actually $15M of revenues for us. Imagine that. Now, I cash in US checks and I lose money. Anyway, someone might want to remind the IAB to account for this… and while we’re at it, someone might want to remind America the Greenback is in the toilet (that is how many USD’s it takes to buy 1 Euro):
Read more here. Found via Center Networks. Also check out some of WatchMojo’s French and German clips.
The US is notoriously behind Asia and Europe when it comes to all-things-mobile, so upon learning that online video has grown 178% in one year in the UK… I wonder, how much has wireless video grown?
Probably much, much more. It’s a shame: wireless companies are shaving in the dark, largely. I am a firm believer that the Web promise will turn into reality… wireless? Not so sure. I’ve never seen so much money being pissed away with nothing to show for it.
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.
A month ago, I got an email from Robin Wauters asking us to help him promote Plugg, a Web 2.0 Conference focusing on Europe.
A social media consultant, Wauters was one of the bloggers of the now-defunct Blognation blog network. As we exchanged some thoughts on the conference, I asked him a series of questions on Europe and decided to publish it below.
HipMojo.com: What’s your background?
Robin Wauters: I’m a graduate in corporate communication with a fascination for the web ever since I got a dial-up internet connection as a teenager. I’ve worked sales, internet marketing and online media jobs before becoming an independent social media consultant / professional blogger. I’m particularly interested in Web 2.0, more specifically the way new web applications combine social elements and technological innovation for something that has impact on internet culture and on society as a whole.
HipMojo.com: How long have you been blogging?
Robin Wauters: I was fairly late to the blogging game. I had been reading blogs since 2003 but set up my own blog about marketing only at the end of 2004. I kind of rolled into professional blogging when I become a consultant in social media (mid-2007) which I was able to combine with my interest in technology, innovation, multimedia and marketing.
HipMojo.com: Describe the Belgian Tech and New Media scene?
Robin Wauters: Answering that question would probably lead me a little too far, but you should check out the SAP Global Survey Shel Israel took with Kris Hoet, Marketing Communications Manager for the MSN/Windows Live European team.
HipMojo.com: Without getting into all the details, how was your experience with BlogNation?
Robin Wauters: Back when I got asked to cover the Belgium web scene for Blognation, I thought it was a phenomenal idea, and I still do. There remains an apparent need for an international blog network covering innovations coming from different countries, particularly Asia and Europe. Most of technology blogs today are very US-centered, and sooner or later someone will fill the hole that’s left. Maybe even Blognation, the sequel?
Apart from that, it was a great team to be a part of, and I got to know a lot of people through Blognation, both in Belgium and abroad. The whole team ended up with a hole in their pockets one way or another, but all in all most people have gotten some good things out of it as well.
HipMojo.com: Tell us about Plugg?
Robin Wauters: Plugg is basically a unique Web 2.0 Conference in the sense that we’re not trying to get as many big names from all around the world for the sake of listing them as speakers or participants. Instead, we focus us on Europe, and the start-ups and investors who are building companies that can compete with similar ventures from say, Silicon Valley. Plugg features a Start-Ups Rally, which is a competition for European start-ups to enter free of charge, next to an array of compelling, European speakers who will bring useful content to the audience.
HipMojo.com: Why should people from outside of Europe attend?
Robin Wauters: To be honest, I doubt many people outside of Europe will be interested in attending, unless they have a clear interest in knowing what’s going on here (e.g. press, internationally focused investors, web companies looking to set up a European office, etc.).
HipMojo.com: Ok. Why should people from within Europe attend?
Robin Wauters: There are plenty of events in Europe where people can go to see interesting speakers from the US or Asia, but I’ve always felt that this doesn’t help the European web industry to take the next step as good as a Europe-focused conference could, and I know I’m not alone with that opinion. If people want to see what Europe has in store when it comes to Web / Mobile 2.0, they should come to Plugg.
HipMojo.com: Europe is seen as being ahead of the US in terms of wireless but behind with regards to the Web. Is that an accurate statement?
Robin Wauters: I think the biggest problem with that comparison is that you’re comparing a country with a continent consisting of dozens of countries. Some European countries have a high mobile penetration rate, others don’t. Some have large percentages of broadband users and intensive internet usage, others don’t. I do agree, however, that mobile is bigger in Europe than it is in the US, although I think it could rapidly change. It’s also true most web innovations come from the US because you benefit from tight ecosystems boasting universities, entrepreneurial incubators, VC’s, etc., something Europe simply doesn’t have.
HipMojo.com: I understand why having a EU works in the context of economy and trade, given how much language is important online, will we ever have a virtual EU on the web?
Robin Wauters: No, and I’d argue we don’t need one either. Dealing with cultural and linguistic differences makes companies more flexible. Understanding these differences makes it easier for European companies to adapt when looking for international roll-outs.
HipMojo.com: Netscape, AOL, Yahoo, Google, MySpace, Facebook… list me equivalent companies emanating out of Europe.
Robin Wauters: There’s no European browser, nor is there one portal. Yahoo, AOL and Google tend to score well in every country they operate, although they always leave enough room for local portals and vertical search engines to gain sufficient market share. When it comes to social networking, MySpace, LinkedIn and Facebook definitely have a degree of popularity throughout Europe which will only increase once they start localizing, but there’s also Netlog (the ‘European MySpace’), Bebo (US company but thriving mainly in Europe), Xing, Viadeo & Ecademy (social business networks), etc. I noticed you left out (Microsoft) Live, which is strange considering the enormous popularity the MSN portals, Live Spaces and Messenger in almost every European country.
HipMojo.com: Good point. What did you think of the Samwer brothers’ investment in Facebook.
Robin Wauters: A smart move by seasoned entrepreneurs / investors, nothing more, nothing less. I think discussions about the fact that European investors should be funding European start-ups instead are irrational and unnecessary.
HipMojo.com: What are some trends to look out for in 2008?
Robin Wauters: I’m quite sure the major web companies like MySpace, Facebook, AOL, etc. will start paying attention abroad again and really start localizing. By ‘really localizing’, I’m not talking about opening up an office in Dublin or London, but an actual presence in every country, with custom content & local partnerships. I think we’ll see less major acquisitions in the web industry but more IPO’s, and I think the budgets for interactive marketing will continue to increase, which also means we’ll keep seeing small yet ambitious web start-ups pop up as they have been doing since 2006.
HipMojo.com: The global markets have been rocked in early 2008… will this continue throughout the year or will be see a return to more bullish outlook?
Robin Wauters: The former, for the above reasons.
HipMojo.com: What can we expect at Plugg?
Robin Wauters: Great speakers, surprisingly interesting start-ups, fantastic good and high-quality networking.
Thanks for your time. Find out more about Plugg here.
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