Slate's Daniel Gross declares blog-based businesses over before they started in this article:
As a cultural phenomenon, blogs are in their gangly adolescence. Every day, thousands of people around the world launch their blogs on LiveJournal or the Iranian equivalent. But as businesses, blogs may have peaked.
It goes without saying that if I thought Gross was right, I wouldn't be starting Dealbreaker, but I don't think he makes much of a case here. (And I normally like his writing.)
First, he's woefully short on evidence/actual data. If there were thousands of commercial blog networks in existence, he'd be in a position to reasonably handicap, but at the moment there are only a handful of major players (Gawker, Weblogs Inc, etc) and single digit sample sizes don't have much credibility. If there is a "blog business" sector large enough to qualify it as an industry, or a sub-industry, or a micro-industry, it's miniscule. (Raise your hand if you make a living blogging. Anyone? Anyone? Bueller?) There are not actually very many people doing this *as a business.*
Secondly: Interpreting Bob Pittman's desire to get out of Daily Candy as "smart money leaving the blog business" presumes that (A) Bob Pittman is smart money (I know people who would disagree with that) (B) Daily Candy is a blog (it isn't) and (C) Pittman wants out because he thinks the business is unattractive; not because Daily Candy has been around for years and is, as these things go, a fairly mature business, and ready for an exit.
So what else has he got? Media overexposure. If you've read about it thirty times in the New York Times Styles Sections, it's obviously over. If he wants to argue that blogs are culturally over, then that might be an indicator. But I don't see online ad rates going down because of it or any bottom line indications that it's a shitty or dying business model. Sure, hype precedes bubble, but I don't think you're going to see Gawker Media imploding anytime soon, anymore than dot com hype wiped out the Internet when the bubble burst.
What I think *will* happen, and it's already happening, is that VCs, many of whom have been sitting on massive overhangs, cleaning up portfolios and still recovering from the last tech boom's hangovers are going to throw money at blog-related technologies. And most of it will be dumb money and most of those companies won't be necessary. And there will be an inevitable reckoning of sorts.
But blog companies like Gawker and Weblogs Inc are fundamentally *media* companies. They're editorially driven, not technology driven. And if voice-y online editorial content supported by advertising doesn't work as a business, Gross might want to quit his job at Slate right now.
Posted by Elizabeth Spiers at February 17, 2006 12:30 PM