by Dana Blankenhorn
  Volume IX, No. XX

This Week's Clue: Blog Business Models

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This Week's Clue: Blog Business Models
SSP (Shameless Self Promotion)
Best of the Week
The American Diaspora
ZDNet Open Source
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2004 a better year for yourself, your business, and your family.


For the Week of May 16, 2005

I spent the weekend at Blognashville, a gab-and-egofest for about 100 (mostly male, mostly middle-aged) bloggers at Belmont University in Nashville (a pricey pimple on the bottom of Vanderbilt) to fuss over Glenn Reynolds (much nicer in person than online) and to search for meaning.

The big question: how will we make money off this?

People are investing a ton of time and effort in blogging. Volunteers get burned out if they can't find money. All institutions are built on money. At Nashville we all felt we were in the gold fields and no one seemed to have made a strike.

There's a Clue there. Nearly all those 49'ers (and Alaska 98'ers) who went in with pick and shovel failed. It was those who went in with a business model, professional mining companies or merchants such as Levi Strauss, who succeeded.

Some 99% of blogs (including mine) go about the publishing question backwards. That is, we look at the process from the writer's point of view, not the reader's. This is forgivable in that bloggers are writers, but this is one of the key differences between writers and publishers. Publishers create for the market.

That is, publishers define the readers they want, the content those readers need, and the advertisers they will hit-up to pay the bills. They then order the production of the product, and keep an eye out to make sure it meets the readers' requirements.

In other words, the difference between blogging and journalism lies entirely on the business side of the shop. Publishers are just as likely to pay for lies as bloggers are to make stuff up. The difference is the publishers create lies that appeal to their audiences, while bloggers write lies that appeal to themselves.

This is easy to understand when you look at the professional blogs that are run by publishers - Weblogsinc, Gawker Media, and Paid Content. Jason Calacanis, Nick Denton and Rafat Ali defined the readers they wanted, created a business model, then hired writers to fulfill the mission.

In contrast I found, at blognashville, that even the most-popular bloggers are mere dilletantes. This is a term Glenn Reynolds applied to himself. Dave Winer, with whom I spent pleasant hours, is also doing his blog on-the-side - his business is RSS. I was surprised to find myself the most knowledgeable businessperson in the room, and I'm a complete failure.

When you're led by amateurs you can't expect professional standards to be upheld. Yet, on the editorial side, blogs often do just that. It's on the business side where they all fall down.

Still, I saw several potential business models at the conference:

  • The Tom Sawyer Business Model - Get people to do your work for free. This is what the free blogospheres like MSN Spaces, and even some political sites are all about.
  • The Flo Ziegfeld Business Model - The free blog gives you a taste of the paid goodies inside. This is what Drew Kaplan is doing at dak2000. He calls his advice items "Easter Eggs," which get people to spend money with him. Podcasting is mostly built around this business model.
  • The Karl Rove Business Model - The blog makes the pig sponsoring it look worth kissing. A lot of consultants are trying to do this within corporations, get them to sponsor blogs that humanize them. Organizational blogs are often of this type.
  • The Zack Exley Business Model - The blog acts as a recommendation engine that pushes people toward giving to the sponsors' favored causes. Zack has pioneered this at Moveon. Great business model, but losing politics so far.
  • The Chuck Barris Business Model - The bloggers are selling themselves, looking for work. I sometimes feel very much like a Gong Show contestant. "A lot of people who never made money performing think the Internet will let them do this," said Henry Copeland, who launched Blogads.
  • The Wyatt Earp Business Model - The independent blogger is attached to a larger organization and gives it his credibility in exchange for money. The blogger is looking to become a hired gun. I do this at ZDNet. Romanesco does this at Poynter.
  • The Charles Foster Kane Business Model - Advertising. One publisher on Friday night insisted that "CP/Ms have to go up." But online ad space is practically infinite. They don't.

Then there were the idealists who said that you don't need a business model, that blogging is about passion, and that recognition should be enough. There's something to be said for that. I've been working without pay for years now. But there is also such a thing as burnout. Everyone who has ever been a volunteer understands this. And many technology movements have moved, like blogging, through stages of interest, excitement, prediction, exhaustion and failure.

Blogging is now in the third phase.


Shameless Self-Promotion

I'm now helping to produce a special blog on Open Source for ZDNet.

I work as a freelance writer in Atlanta, and am on the development team for EgoScout, a new kind of mediator for mobile phone users.

My last non-fiction book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards. Write me for a PDF copy of my latest novel, "Baptists are for Dunking."

On my Mooreslore blog I've written a new novel, "The Chinese Century." It's a story told in real-time, with real characters, but entirely fictional, dealing with the consequences of the falling dollar. I'm beginning a sequal, "American Diaspora," exploring the themes of the first book but with more fictional characters. It's a true alternate history, but set in the present day.

You are encouraged to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Best of the Week

Intel's New Direction

As of today Intel's new direction is better. Better doesn't always mean more. In the case of microprocessors it can mean putting more computers on each chip (multi-core) or running with lower power. In terms of communications it can mean a host of attributes, from security to coverage to throughput.

Scaled Credibility

Dmitri Eroshenko is warning the Internet advertising space that the sky is falling due to click fraud.

New Left

In 2005 a lot of liberals are scared of right-wing extremism, the way their parents were scared of long hair back in the day.

East of the Blog, West of the Media

Generally, my opinion in the past was that the market decided who should be a journalist, and who was "just" a blogger. But that may not be right.

Social Mobility

The strength of an economy, like that of a society, depends on social mobility. That means the poor can rise to wealth. It also means the wealthy can end up poor.

Pitch Credibility

Why is it that politicians have done a better job on the Internet than publishers? It has to do with a concept I call Pitch Credibility.

Where a Blog Business Model Starts

A shared registration database would be a good place to start.

The Myth of Scarcity

The bidding war between Verizon and Qwest for MCI is based on a myth of scarcity. That is, both think they can make the deal pay by squeezing customers for the scarce resources represented by the MCI network.

The Lies of Market Research

Market research companies specialize in the third kind of lie, namely statistics. While these companies were originally created to help clients deal coherently with the market, that's no longer the sole source of income.

Last Word on VOIP

I have not written much about Voice Over IP in this space because I'm not an expert in it. (Yes, I hear you say, this never stopped you before.)

WiFi Ground War

The political battle over WiFi shapes up as a classic match between private interests and the commons. But it is in fact a battle over real estate.


The American Diaspora


Table of Contents

ZDNet Open Source

DePoliticizing Open Source

The Little Red Hen Business Model

I Don't Want You to Talk, Mr. Gates

The Value of a Software Ecosystem


Clued-in, Clueless

Clued-in is Henry Copeland. I met the Blogads founder last weekend in Nashville. Very smart fellow.

Clueless are 99.9% of bloggers, about business anyway.


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