November 14, 2005

One Year Wait…

Most successful internet people I have talked with have had one thing in common: a one (or more) year wait.

Surely by freak accident or market timing some people stumble upon a good idea or business opportunity which is instantly profitable, but most web based business models require significant investment in time. You don’t need as much money on the web as you do off the web to get by, but you need to be willing to wait.

Many of the people making a packet off contextual advertising overnight also had sites that had built up trust in the search engines for a number of years. If your initial results are not amazing right off the start do not give up too early.

Also sometimes a site has much greater longterm value if you worry about making it as linkable as possible off the start, and then look to profit later.

It makes sense for people to sell how quick they done well because a story like that makes it easier to:

  • get press mentions (unfortunatley society seems a bit much focused on money and stating success in terms of dollars is newsworthy if the results are fast)
  • sell a system to help others be as successful as they are doing the same thing

If you are around long enough, and look at the patterns in the search results and press you will notice they often overlap. If you take it a step further you can see that perhaps the story being sold to the press sometimes sends some marginally profitable businesses into hypergrowth.

Seth Godin has a book called All Marketers Are Liars, which talks about story telling to consumers. Frequently the press likes the same types of stories as consumers do, because at the end of the day they have to compete on slimming margins due to the robust number of alternatives to mainstream press and the limitations to bias in mainstream news.

Post partially inspired by a chat with Andy Hagans.

November 8, 2005

Leveraging Authority

So the person who writes the Weblogs channel for About.com recently created a blog network which she is mashing up with B5 media.

Whenever there is a new launch of any sorts it is bound to take some criticism from competitors and onlookers, but this is a way for mutual gain by leveraging authority and distribution. The fact that New York Times owns About.com also grants more authority to those blogging there.

I think some people forget how new the web medium is. Beyond how new it is as a whole it has only recently got easy enough for just about anyone to be able to profit from it. Combine that with

  • the social nature of blogs
  • the tracking and feedback tools that come along with them
  • the ease of link acquisition with running a well read channel
  • search engines like Google getting smarter at looking at unnatural linkage paterns
  • search engines like Google tuning up the duplicant content filters to the point that it kills off the business model of many empty shell affiliate feed and product database type sites
  • the ability to leverage Google’s advertising base & other contextual programs like Chitika

and it starts to make a bit more sense why everyone and their dog is quickly trying to put themself atop some sort of channel driven network.

You don’t have to be a good salesman if you can get an audience. All you need is the audience and the targeting is moreless automated.

Recently NickW launched Performancing, which will surely be a stellar site about how to make money from blogs. This post by Andy really highlights how much profit potential there is on the web.

I spent most of today screwing with information architecture of a clients empty shell merchant site, knowing eventually it will lose marketshare and profitability to someone who makes their site social / a cause. I would much rather be out linkbaiting somewhere.

October 11, 2005

The Non Profit Blog…No Such Thing!

NickW on creating Threadwatch:

None of this would have come about without TW, the social currency, and the raising of my personal profile doing that site has helped me make some cool connections with some very interesting people, so those that scoff at the total lack of business model on that site (at least for now) take note, it may well pay off in the end, albeit indirectly 🙂

All websites are for profit sites. Profit is not always in terms of dollars though. Even when it is sometimes they flow best indirectly.

October 10, 2005

Socially Conscious Self Generating Blogs & Business Models

A few years back MicroSoft used to use LookSmart to power their search database. This meant that LookSmart listed sites would be listed near the top of the MSN search results. Simply write yourself a good relevant title, submit to LookSmart, and pay per click for all the MSN traffic you can eat.

But, there was an even better way for this then nearly bankrupt kid to get MSN traffic. For free. LookSmart used Zeal as a backup directory to feed noncommercial content into the LookSmart database. It also allowed you to list pages instead of sites.

For any topic you wanted to collect feedback about you could:

  • do a bit of research
  • write a page
  • edit your way into the search results for hyper competitve single word queries

I was a fairly depressed person for a number of years (and still sometimes act like a jerk or screw myself over without reason). My behavior got me interested in depression and anti depressant drugs.

I created pages about most of the major anti depressant drugs and then people started emailing me with comments thanking me for the small bits of information I had on that site. I then started getting so much email that it was overwhelming, so I decided to allow people to leave feedback via a blog, and I created Depression Blog, which is essentially a forum without deeply specific thread titles. Each thread is “name of drug” feedback.

The benefit of a blog over a forum are:

  • does not require a login
  • you can customize the fields to make it hard for automated bots to spam
  • since most people do not think of it as a forum they are more likely to state exactly what they want to in a single informative post
  • after a few people post the rest will likely follow suit with their style

For the longest time I did not put ads on the site because I wanted to keep it pure. Recently I put ads on it, and it looks like the site will probably generate around $500 a month.

I am collecting feedback about a topic that is typically heavily marketed to be pro drug manufacturer, and the feedback shows it is not always rosey. Many of the side effects people mentioned were similar to ones I noticed from when I used to dabble in hard core drugs. Some of those side effects are not listed on the lables.

All in all, that site:

  • gives depressed people an outlet where they can express themselves
  • lets them realize not everything is their fault, showing them that others are dealing with the same things
  • see they are not alone in their struggles, and that the drugs effect different people in a wide range of ways

Add to the above that

  • the site is almost entirely self generating
  • it creates a nearly livable income with minimal effort or maintenance
  • that profit can also be used to help buy further distribution for the site

Now MSN no longer uses LookSmart, but MSN search is still easy to manipulate and there are other networks that provide free and fast feedback loops which can be used to help generate self generating sites and business models.

Some people may argue that my creating of Depression Blog is me profiting off of the suffering of others and that the site is dishonest. I say it gives them an outlet and collects information that probably would have never been collected. It may also help people learn to look deeper within to solve some of their problems (and I still need to do a bit of that too).

Automated sites can have a social conscience, and are far better for the web than the cut and paste news story blog business model is.

Off the start they can take a bit of time to set up, but many of those types of sites can run on autopilot after about a month or two. If you create 20 sites generating $20 a day you are making 6 figures a year without the hassle of having a boss or customers.

The initial vision of the web was a version that allowed anyone to edit it. An open form box where people can express themselves about a topic relevant to their life and mind helps collect a broad base of human experience that may have never otherwise been gathered.

October 9, 2005

Link Citation as a Proxy for Value

People follow links. Search engines also act as users, and largely determine document quality scores based on linkage data. Based on the direct and indirect value links are a great proxy for value.

After the AOL purchase of Weblogs, Inc., Tristan Louis quickly created a chart of blog value based on the number of sources.

Based on a selling price of $25 to $40 million the value of a source linking to your site is anywhere from $564.64 to $903.42.

The average link is not worth that much. The biggest things that the study failed to account for are:

  • The value of links widely ranges. I have bought links for $3, and have also paid thousands for a link.
  • The average link quality of the Weblogs, Inc. network is higher than the average link quality of the average blog.
  • The reason their average link quality is higher is that Jason Calacanis has built significant linkage data through PR efforts with traditional media.
  • If you pulled those media links out of the equasion I bet the Weblogs, Inc. network would be lucky to get more than half their current traffic volume.
  • I do not think Technoroti tracks most traditional media websites.

Tristan then questions:

Should we now assume that traditional media companies are willing to pay between $500 and $1000 per site that links into a blog?

As mentioned above, reducing links down to average and then just looking at Technorati sources leaves much to be desired.

Jason Calacanis was quick to discount the value of the linkage data in the deal. Jason also frequently talks about how Weblogs, Inc. spends no money on marketing. If you are not spending money on marketing then your value comes from the attention you get other ways, and most of that is driven through the link popularity.

You could get a more accurate view of their link popularity by looking through Yahoo! linkage data, but it would take a while to filter through that many sites.

  • [linkdomain:www.engadget.com] = 1,810,000
  • You can view through the linkage data and filter out sites, but when they have around 100 sites in their network that gets to be a good bit of effort.
  • If you wanted to filter out their cross linking the best way would be to filter out the network links on one of the smaller channels that is only a few months old. Then you know you can subtract that much link popularity from each site as being due to cross network linkage data.

Profitablility, attention, and influence are the real measure of a blog’s value, but attention & influence are hard to measure.

The real reason I mentioned this link = value measurement is that Tristen threw out something debatable that many people are absolutely going to love to link at. Wow, my blog is worth X is probably going to appear on hundreds of blogs.

Some amazingly well known bloggers have already syndicated the idea:

Henry Blodget Returns

Interesting to see a name which was so established, and then ripped to pieces, and then he jumps right into the web fray again.

Is this apology authentic? It sure sounds the bit, but then again he is linking off to his research in that post. Research that will soon be sold as a high end service. Either way I find it fascinating that he mentioned his past and has the comments open. He is certainly a bit more courageous than most are.

Many people bet their financial stability on his over optimistic predictions. Then, he states:

the SEC alleged that some remarks that I and my colleagues made in emails were inconsistent with professional opinions in our published research, and charged me with civil securities fraud

I will not presume guilt on his behalf, but I think his blog is definitely one to watch. A great salesman. His authentic sounding voice will once again give him great power in the internet stock space.

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