August 22, 2006

Why VC Investment in Blogs Is Dumb

On the same day you have articles about VCs seeing a huge opportunity in blogging and blogs making $60,000 a month in ad spend.

Mark Cuban flamed Jeff Jarvis for hating on Mark’s new blog Share Sleuth, which is a blog about trading stocks in companies they uncovered dirt about.

If it is wrong for bloggers to buy and sell stocks based on their market influence then why is it right for companies to be able to buy and sell the influence of media?

The real issue is that as soon as you take on investment a blog loses a bit of that cozy feel, and then the numbers matter more than the feeling. Which sucks, because for about every bad thing I have ever written “bad as in as noted from business friends much smarter than I” I have also had other people compliment me.

When competing with large established business interests that will eventually buy into new technologies all you really have as a competitive advantage is your authenticity. If the numbers get in the way you lose.

I am sure some companies that buy into blogging will make money from it, but most of the bloggers willing to sell are not writing with real passion. The day they sell is the day the concede their passion, IMHO.

April 28, 2006

Paying Writers in Blogging Business Models

Andy Hagans lays down some phat posts about blogging network business models. In Sorry, Rev Share Still Blows Andy states that the lack of risk to blog network owners also leads to less opportunity.

It’s About Incentives: The Economics of Blog Pay Structures Andy talks about overcoming the spam issues typically reinforced by most blog payment terms:

Depending upon the risk aversion of a particular writer the figures can change, but essentially the best payment structure is something like:

  • 80% fixed salary
  • 20% discretionary bonus contingent upon writing quality
  • Weekly posting quotas
  • 4x Penalty structure

The point is to provide sufficient stability in payment rates such that you can attract professional writers, but still maintain a sufficient motivation for quality in the form of a bonus. And finally, to tackle the problem of posting regularity include a penalty clause which is a multiple of the per post rate.

Pretty sharp stuff Andy. Few people actually post about the realities of pay scale and how to pay people to run blog networks. Clearly in giving out this information Andy is trying to reinforce his position as a blog overlord.

December 22, 2005

Leveraging Your Blog Archives

So I have in the past done this a few times, but have not done it recently, but I have talked to many others who have done it. Have you ever leveraged your archives?

By this I mean:

  • Have you ever backdated a post you wanted to make but for some reason did not make it when you should have?
  • Have you ever fixed old post errors? Did you cite the error corrections you made or just make them? Is it required to record / mention what you changed?
  • Have you ever create a test page in the archives to see how search engines would react to a new page on that topic? For example I have known some well known bloggers who put mesothelioma pages in their archives to test link bombing.
  • Some people show time sensitive ads. Is it ok to post affiliate links in blog posts? Need they be disclosed? Is it wrong to change old links in high ranking posts that could make you decent money if they were affiliate links instead of direct links?
  • Have you ever went back into an old post and edited out links to sites that became spammy or added links to sites you were working with?

Some people push blogger ethics, etc…but sometimes the content and ideas that sell are not the same ideas that regular readers would be interested in citing or reading. For example, if I had a few thousand SEO 101 pages on my SEO blog they would probably convert exceptionally well, but nobody would want to read about the same stuff over and over again. What would be the best way to introduce that content without offending regular readers who already knew a lot?

Should all new blog content come in through the home page? If so, why?

Blogs About Blogging Make No Money…

Duncan Riley announced he was restructured out of his real world job, and thus is now blogging full time.

He also mentioned that he does not yet make much money from his blog about blogging…which is probably the case for most every blog about blogging and technology, unless they sell a how to blog information product or consulting services from it. He has killer link popularity which could be leveraged for a good mint if he does a good job with it.

As far as profit goes niche channels selected with profit in mind will likely outperform most large oversaturated markets.

The Value of Talking About What You are Doing

Some people are afraid to expose what they are doing, thinking they would only be creating more competition for themselves. If you are already in a competitive field then discussing what you are doing probably will not create much more additional real competition.

Even if talking does create more competition, discussing it typically still adds personal value far faster than competition. By telling a story about what you are doing and establishing value systems on commodities it tells an interesting story that people will want to spread.

Yesterday when Andy Hagans blogged about buying a poker blog it got many direct and indirect links…probably enough that the post instantly increases the value of the poker website by 50%. It is not easy getting links at sites about poker, but if you wrap it in a blog and talk about it on active interesting channels it is.

The links he got were viral editorial links, which are the exact type search engines want to count.

December 21, 2005

Buying and Selling Blogs

Rarely do you get to read the details of a smaller financial transaction so clearly from both sides.

Andy Hagans posted about why he bought The Poker Blog and how he came to his valuation of it. Ben Bleikamp posted about how he created the site to sell.

Right now I sorta treat websites like I used to treat baseball cards…love collecting them. Only buy if you think you are getting a deal and only sell if you know it is far greater than you paid for it. One of my perhaps bad traits is that I tend to find ways to build value very cheaply and thus I do not work hard enough to exploit the full value or appreciate how much some things are worth. Having others set up guidelines on value makes it easy to help appreciate the value of certain content / websites / ideas.

Have you ever flipped a blog or bought a blog? How did you know what price was the right price?

November 30, 2005

Blog Monetization Makeover

Andy Hagans writes a slick article abou how to improve the monetization of one of Weblogs Inc’s blogs.

They would probably increase their revenue at least 50% if they listened to it.

November 24, 2005

Linkbait, Marketshare, and Monetization

Gary Stein noticed some anti blog advertising logo linkbait.

It is a bit of a bitch to monetize certain audiences. That is why you see some successful entrepreneurs running a number of for profit sites away from their main blog channels. The blog channels give you credibility that can be leveraged elsewhere, but when you combine the business model right into the blog sometimes that can cost you links, especially if people think you make large profits from it and / or if you have a web savvy group of site visitors.

As you get more successful your time has more value, and some of the best websites outright suck on the profit per unit time. Some jackasses send bogus lawsuits that can cost 10’s of thousands of dollars. With society the way it is you have to look out on the financial front or you may end up getting crushed by some greedy arbitrary assholes who should rot in hell (although I am not naming names there hehehe).

When you have no boss and a broad array of interests and are more interested in learning than making money it is exceptionally easy getting pulled a bit thin running too many channels. Hard to know when it is time to consolidate, take time off, kill a channel, or what to do. Especially when you consider the effects current and future search algorithms and monetization methods may offer.

The blog space is ripe to be tapped for large profits, and I think if I put the same effort into it as I did my website I could probably make 7 figures a year within 2 years. Not that I am all about money, but it is nice to know that if anyone ever tries to screw you over that you could make it hurt them far more than they could ever hurt you. My lawyers and this whole recent lawsuit deal taught me some valuable lesson about honesty and how that sometimes does not play an active role in the business space.

As the algorithms advance my SEO site’s time requirements increase logarithmically and people may not see that just by reading some of the day to day posts.

After you get mildly successful it is too easy to hold on thinking it will stay that way, but it never does. I need to be more effectively leveraging the stuff I have learned.

Hard to know when to let go, switch trains, or ante up all in. It’s not time for drastic changes yet, but I may look at some other stuff too.

November 23, 2005

Why Kill a Dead Blog? Archives = Free Audience

Nick Denton announced he is killing OddJack:

So we’re closing down Oddjack by the end of the month. We’d rather concentrate our energies on sites such as Deadspin, which have buzz and a growing audience, and new launches, which have equal potential. The moral of the story: it’s easy to launch sites; much harder to make them popular.

Being the smart ass that he is, Nick asked Jason when they would be closing their dead blogs. Jason responded:

Why close them? They can sit there and get traffic, make Adsense revenue, and serve as a resource for folks. I think the model is to leave these sites up… I don’t see the point in taking them down.

The two big tips there:

  • Archives have zero incremental cost. When blogs get past the break even point each additional day is more logarithmic profit growth (due to more content, more linkage data, and search engines trusting the sites more).
  • New channels are cheap. A new blog can be launched for $20. If you already have a solid well known blog you can use that market position to market the new site at virtually no cost (other than time).
  • Quality channels are a bunch of work. In spite of a ton of market research data you can’t be certain how successful a blog will be. In some markets it may make sense to make the least spammy channel, but if you are in a competitive field where there are other authors passionate about the topic it is much harder to build an audience large enough to monetize unless you put a ton of work into the blog.

Want to be a blog network mogul? A while ago I teased Andy Hagans calling him a blog overlord. He recently wrote on the subject.

November 19, 2005

The Least Spammy Channel: Marginal Improvements and Incremental Income

Diversification Maximizes Flowage:
It’s expensive and time consuming to keep learning, reading, going to conferences, creating software, updating my ebook, and blogging a bunch. Many of my friends make far more income than I do by diversifying their revenue streams and running a number of lower profit channels in parallel.

The Top Channels Will Win…Maybe
I tend to think that inevitably the audience mind share / link popularity / rankings will all converge to where the interesting channels win big. As people become more starved for time the best channels will reap huge rewards. But there is a huge problem with that line of thinking though. We are not there yet.

Between now and then many people who are not focused on trying to be #1 are making shit tons of money setting up tons of competing channels. Some are more or less automated than others.

Competing With Automation and Semi Automated Content:
It takes a ton of time, effort, and / or money to run a useful dominant channel in a competitive field. It takes minimal effort to quick quote and write me too type posts that search bots are not smart enough to detect or care about (as there are bigger fish to fry).

If a category has great interest and few blogs then it is fairly easy to run the best blog on that topic. One of my friends told me that they had the least spammy blog in a category. He told me that multiple times about different sites. It is possible to do that, even with outsourced writers, because most people are so focused on the short term.

Lacking Competition:
Within many competitive SEO channels most sites are garbage lead generation or non content sites, so although the category appears competitive most of them are a bit top heavy (focused on generic queries) and automated. There is little original legit information in many competitive categories.

Having some original content and unique text makes it easy to pop on many 3 4 and 5 word queries.

Sure you can try to launch the best site on a high profile category, but content that is not linked is not quality content (or at least it will not be getting much free traffic love from the search engines). As important as it is to build linkage data, few people trust new websites unless you are absolutely excellent at viral or hype marketing. Perhaps it is best to start content channels that are decent and then build more quality into the site as time passes and linkage data and the post archive size grow.

Competition Scales Faster Than Profits:
I also have made the error of being interested in some of the most high profile fields. A good buddy at the WMW conference told me “we all have our own niches, yours just tends to be a bit more high profile than most of ours”. Higher profile does not mean more profit, just a ton more competitive. As you move into more competitive fields the subject specific competition tends to increase logarithmically far quicker than profit does.

Remarkability vs Profitability:
If you look at many of the people who are considered remarkable on the web you will notice that what makes them remarkable and what makes them profit are often not the exact same thing. Many high profile channels don’t make shit (other than link popularity to feed into the profitable network), and many of the high profit channels are not that exciting. Some of those boring channels just happen to be in categories that have nill competition outside of useless spam.

Feeling Stuck:
If I were starting from scratch today there would be about a zero percent chance I would create an SEO Book as a business model. And yet strangely at the same time I feel like I am stuck on it, when I am certain I could make 10 times as much working half as hard.

Cheers to those smart enough to make fat wads of cash by running the least spammy channels on topics that are full of spam and have few competing channels.

Next Page »