When I had the temerity to poke around Nick Denton's weblog business model in the pages of Business 2.0, the Gawker Media impresario responded with an entry on his personal weblog that dismissed my findings as a "blog fantasy." My contention that Denton, who had founded and flipped companies before, wasn't just indulging in a hobby and might someday sell Gawker to the highest bidder seemed to offend him. He implied that I was still shell-shocked after my personal (and entirely theoretical) windfall vanished in the bubble's pop. "It's not analysis," he concluded. "It's wish-fulfillment."
What especially set him off were my pointed questions about equity -- Denton doesn't believe in giving away any. When the original editor of his gadget blog, Gizmodo, insisted that Denton share, Denton's answer was a two-parter: 1) Blog equity isn't worth anything (because no one's buying), and 2) no, you still can't have any. That editor, Peter Rojas, promptly quit and leaped into the waiting arms of Weblogs Inc.' s Jason Calacanis, the closest thing to a rival Denton has. Calacanis gave Rojas his own blog, Engadget, and the equity he was looking for.
I bring up this ancient history lesson only as a reminder that until very recently Denton and Calacanis were the yin and yang of blog equity: Denton the closed fist and Calacanis the open palm. Any A-list blogger thinking of signing with one or the other had to consider whether they agreed with Rojas that a blog is worth owning. Their answer would outline their implicit belief in (or, some might say, wish for) a blogging bubble down the road. Hell, yes, a blog is worth owning if someone will toss you a million bucks for it.
But a funny thing happened on the way back to Dotcomland. The bloggers -- including Calacanis -- came around to Denton's point of view. They wanted a regular paycheck, not promises. They told Calacanis the same thing, and he happily obliged them. "When we started last year, we found only 1 in 20 bloggers wanted to work for free for the 6 to 18 months it takes to get a blog to break even," he wrote in an e-mail. "So, we started offering folks pay, and 19 out of 20 went for the deal."
And it's hard to blame them. At the moment, blogging is a small business enterprise, not a speculative venture. While the VCs seemed poised to swoop down a year ago, so far only the toolmakers like Six Apart (maker of Movable Type) and blog searcher Technorati have attracted any funding. It's hard to start a gold rush when no one's willing to set an initial price for the gold.
Which is where John Battelle steps back in.
Battelle, best known as the founder of the late, lamented Industry Standard (like seemingly everyone else who ever worked at a new-economy publication, he contributes to this magazine now), is sloooowly pulling the wraps off his next media venture.
Dubbed FM Publishing, it's his personal attempt at building a blog confederacy. (The "FM" actually stands for "Federated Media.") But unlike Denton, who publishes only the blogs he finds personally interesting, or Calacanis, who follows the trails of Google (GOOG) AdWords wherever they might lead him, Battelle intends to partner only with bloggers who have decided that their blogs are worth owning and who also already have viable business models.
His plan is to offer himself as a publisher-as-service to blogging entities. He'd aggregate traffic, sell category-specific advertising against the sites in the FM network, and handle the back-end business and tech issues. He's done much of this for BoingBoing, where he's been acting as "band manager," as he puts it, for more than a year to generate cash from the site. Calacanis, who is definitely a rising-tide-lifts-all-boats type, offered, via e-mail, this rosy summary of Battelle's accomplishments there: "John did an amazing job over the past six months taking BoingBoing from ad/revenue-free to ad/revenue-filled without upsetting the user base or the four bloggers. I understand it makes $40k a month and is growing ... so $500,000 a year across five folks is a nice living ... if John can do that 10 more times he has a very powerful business." (Battelle says, "We don't talk about numbers, but they are in the right range, if a bit high.") BoingBoing has already signed up as FM Publishing's first client, provided Battelle can get his company off the ground.
What's interesting about Battelle's approach is his stated intention to keep his mitts off everyone's intellectual property. "I am definitely not saying 'Turn everything over to me,'" he says. Bloggers keep their sites. What's even more interesting is that Battelle -- who is blogging the entire prelaunch experience for public consumption at fmpub.net -- is looking for seed funding from strategic investors, and that he's open to the idea of selling out someday. Taken together, Battelle's philosophy and his business plan signal that 1) blogs are valuable enough to be worth owning, and 2) he's inviting the mainstream media to decide what "enough" means in the case of ventures as small as his own.
Personally, I can't wait to see what that dollar figure might be, but that could just be my wishful thinking again.
