Technology Review's Jason Pontin on Power Blogging

If you look at the economics behind blogs, something perhaps more serious is going on as
well. So, sure, there have been big media companies before around certain personalities
and yet they manage to grow beyond those personalities because there actually was a
business model supporting them.

The problem with blog is that even the most wildly successful ones like the Daily Dish by
Andrew Sullivan, they’re not actually bringing in huge, huge revenues. The CPM, they're
getting it. They cost for thousand. For page impressions, they're still relatively, relatively
small. So, not only are they attached to individual personalities like Nick Denton, like
Omalik but they aren’t really in a position where they can begin to grow and make capital
investments to really expand into proper media companies.

GigaOM which is probably the best example. So you begin with a personalized blog and
try to grow bigger, had I think two of the full-time reporters and staff and some support
staff but it was still very much owned. I believe it’s across the internet media space if
small, smaller size which are the delivering under a million or between a million to three
million uniques a month can begin to demand serious CPMs from a large number of
repeat advertisers. And by serious CPMS, I mean 25, something like that. I don’t think
these are sustainable businesses.

At the moment, almost all the most successful online brands, even if they have huge
traffic tend to go and support those online businesses with additional products either print
or events or the like. It’s very difficult at the moment to support an online ground by
itself. At the same time the traditional print advertisement is collapsing, sponsorship
advertisement events isn’t much healthier. So we’re in a -- this is like the general theme
of my remarks. We’re in a very uncomfortable position in publishing at the moment.

We all know that audience behavior and advertiser demand is driving publishing online,
you need the dollars onto there. And in some point, we’re going it hit an inflection point,
a crossover where there’s no money left basically in the old business. And there’s not yet
enough new money in the new business. And if we can't work out our way between
media buyers, the advertisers, aggregators like Google and publishers like me to value
content creation then, we’re going to hit a wall. And it's not going to benefit anyone.