WSJ.com - Can Bloggers Make Money?

WSJ.com - Can Bloggers Make Money?

Can Bloggers Make Money?
April 19, 2006

Blogs have a lot of buzz, but there's still considerable debate about whether that can translate into profits.

While many blogs remain little more than amateur diaries, several bloggers have tried to parlay their online ramblings into branded businesses. One, Jason Calacanis, co-founded Weblogs Inc., a network of blogging sites that was acquired last year by AOL. Mr. Calacanis has been an outspoken proponent of blogs as business vehicles, arguing that quality content can drive enough traffic to attract advertisers.

But longtime Internet entrepreneur Alan Meckler is skeptical. Mr. Meckler, who is chief executive of Jupitermedia Inc., believes that some blogs may achieve a measure of success, but doubts most blogs will be able to generate meaningful profits.

The two agreed to debate the issue for the Online Journal, and their email exchange is below.

Alan Meckler writes: Jason, few people if any will ever make money from writing a blog. One way to make money is to create a "blog network" as you did with your Weblogs Inc., which was sold to AOL a while back. This idea can work, but blogs in such networks are cherry-picked by skilled business people such as yourself. Therefore most blogs are not commercially viable.

Jason Calacanis writes: Alan, you are correct that the best model for making money from blogs is by "curating" and grouping them like we did at Weblogs. Engadget, Autoblog, and Joystiq have become the largest blogs in their verticals because we've packaged, marketed and sold them better than any one individual blogger ever could.

THE PARTICIPANTS

Alan Meckler, a longtime Internet entrepreneur, is chief executive of Jupitermedia Corp., an Internet media research and marketing firm he acquired in 2002. The company recently sold its research arm to focus more on running its collection of Web sites aimed at technology professionals (including internet.com) and selling online images. Prior to running Jupiter, Mr. Meckler owned a series of Internet businesses, including Mecklermedia, which he sold to Penton Media Inc. in 1998 for $274 million. Mr. Meckler frequently comments on the Internet industry through his blog at weblogs.jupitermedia.com/meckler.

Jason Calacanis is CEO of Weblogs Inc., a blog network Mr. Calacanis co-founded in 2003 that includes the popular technology site Engadget. His company was bought by AOL in 2005 (terms weren't disclosed, though a person familiar with the deal put the price at around $25 million). Before Weblogs, Mr. Calacanis was founder and editor of the magazine Silicon Alley Reporter, which folded in 2001. He then launched and sold VentureReporter, which has since been acquired by Dow Jones & Co., publisher of The Wall Street Journal and Online Journal. Mr. Calacanis maintains a blog at calacanis.com.

Now we've taken that to the next level and are offering our blogs along with AOL's massive reach. Major advertisers that are doing seven- and eight-figure advertising deals with AOL can now add a couple of blogs to their marketing program in the same buy. We call this our "reach and niche" program and we're hitting the ball out of the park with it. As we all know marketers are looking for efficiency.

When it comes to individual bloggers they have many choices now that include blogging for a network or going solo. Many bloggers are in fact making money with the automated advertising tools that never existed when I started publishing in the 1990s -- let alone when you started publishing in the 1980s. :)

Today you can start a blog, build an audience, and give the advertising slots to AdBrite or Google AdSense. With three or four ad slots you're gonna do a $3 to $10 RPM (revenue per 1,000 pages viewed) with these automated tools on average. So, if you can do 500,000 pages a month -- which isn't easy -- you can make $1,500 to $5,000 a month. That's today and without a sales person. That number will go up over time and some folks might even be able to hire a dedicated sales person at some point. Solo blogging is starting to pay rates similar to the smaller media outlets (think local newspaper or a small magazine). Walt Mossberg might not be running out the door to start a blog, but it's only a matter of time in my mind.

Alan Meckler writes: Jason, good stuff as usual for one so sharp and original! But look at the number you have in your reply --- 500,000 per month (page views) is virtually unattainable for 99.999% of all bloggers.

My blog only gets about 300,000 per month -- so with your model I might make enough money per month to buy a candy bar. And I have the advantage of getting promotion through the Internet.com home page as well as many links to other bloggers.

Your concepts are good, but once again only for a selected few.

Jason Calacanis writes: With 300,000 pages in the B2B [business to business] space you could RPM at $15-$50. That's $4,500 to $15,000 a month, or around $50,000 to $180,000 a year. You make $242,000 a year according to Yahoo Finance -- the candy bar gap is closing!

SHARE YOUR VIEW

Can the buzz generated by blogs translate into profits? Join a discussion.

However, you are correct that the majority of folks are not going to make a living from blogs, but that's because they choose not to try, not because they couldn't. If folks focus in on a niche and own it there is a good chance they could make half a living from blogging.

The online advertising market is going to grow to $18.9 billion in 2010 according to some company called Jupiter Research I found on Google. :-)

That means we are going to add $1.5 billion a year in advertising to the Internet. That money needs to go somewhere and I think blogs and citizens media could take 10%-20% of that. Right now the homepages of the big three are sold out at very high rates (Yahoo, AOL, and MSN). There is a major inventory problem on the Internet and the reason that Google has done so well is that they are spreading that money out over hundreds of thousands of sites which carry Google AdSense.

The fact is that the "long tail" of sites is largely unmonetized. Over the next five to 10 years, Google AdSense, Weblogs Inc., Yahoo Publisher Network, AOL's white-labeled version of AdSense, and Microsoft's "AdSense killer" will enable the monetization of a lot of those smaller sites.

Look at MySpace, they are the number two site on the Internet but they are making $13 million a month. They probably have the lowest RPM in the history of the Internet! That means they have a lot of growth ahead of them. Of course, the fact is they moved instant messaging to the Web (talk about back to the future!), which is largely responsible for their page growth. If you took the number of IMs on AIM and [Yahoo Messenger] and put them on the Web, they would be the number one and two sites on the Internet tomorrow... So, I'm not that impressed, frankly.

In fact, I think based on this email conversation we're gonna start a repping business for smaller blogs.

Alan Meckler writes: Jason, compelling data and information once again! Perhaps I should sell Jupitermedia and become a full-time blogger? With you repping me my life would be much easier!

But getting back to earth -- the monthly revenue sum for my blog would be within a Weblogs Inc. type environment? Again making it the non-typical blog. In fact in a small way your data makes me an "elite" blogger.

Take MySpace -- I read yesterday in the N.Y. Times that they have 50 million in the community. Every member can launch a blog with little or no difficulty. Blog growth is and will be huge. But again, while a very select few of the blogs will make significant money, most will never be worth anything because their information is worthless and therefore they will garner few monthly page views.

Blogs are fun for someone who wants a pulpit and does not care about making money. Blogs are really the "diaries" of yesteryear. Social historians of the future will have a field day mining blogs for nuggets of the mores of present day civilization. But in terms of making money from blogs, I doubt they will be anything more than an interesting subset of Internet ad revenue.

P.S. Interesting to note that my spell checker does not recognize "blog."

Jason Calacanis writes: OK, I think we've reached entrepreneurial stasis on this one: The majority will not make a living off blogging, some will. Time will tell how big the some market is, hundreds or hundreds of thousands. I'm going with the latter.

Alan Meckler writes: Blogs are really diaries or microcosms of what is happening in millions of ways in daily life -- ranging from special interests to business specialties to whatever. Obviously there is money to be made with blogs, but very, very few will bring in more than a few hundred dollars per year.

Jason created a great business model in aggregating blogs. But here again the opportunities to replicate this model will be few and far between -- the reason being that such a model requires at least one or two anchor blogs that will be attractive to advertisers. Much like great magazine empires that offer magazine networks only a few of the magazines are big winners -- these big winners help support the weaker magazines -- same with blogs.