Niche Blogging Will Continue To Challenge Big Publishers

| About: Time Warner (TWX)
Business 2.0 has unveiled 16 new blogs. Whoa! More than a dozen?  At one time?  From one publisher?

As Herb Greenberg, a fellow runner and blogger, e-mailed me, "There are simply too many blogs.  There is going to be a huge shakeout."  While a  shakeout in business often means lost jobs, in blogs, it just means less to read. Wouldn't that be wonderful? 

We'll know more about blogs next week, when Technorati publishes its quarterly review of the 'sphere.  I suspect we'll see some shakeout in terms of bloggers who have begun posting less frequently.  The novelty of blogging must be wearing off, if not for the writers, then for the readers.

Where do you find the time to add 16 blogs to your online day?  I suspect you don't.  The only response is to be more demanding in your reading.  Bloggers who write about Windows Vista today and Willie Nelson's new CD tomorrow are going to get squeezed out of the Blogrolls.  Publishers, like Time Warner (NYSE:TWX), the owner of Business 2.0, are going to get squeezed, too. 

As bloggers push for readership, they will focus tightly on their beats.  Slivers of slivers of subjects will get intensive treatment, to the delight of some readers and the dismay of some ad sales people.

Big/old media traditionally have sold ads by tonnage, a price per thousand readers/viewers/listeners.  With Web sites, that system of doing business has been under attack for years.  Now, with podcasts and blogs and video blogs, it's even more so.

Some times you have to go through hell on the way to heaven.  Web content publishers are pursuing smaller and smaller niches, while some advertisers are still looking for canyons full of audience.  Online sales people lament that some advertisers value online readers at 10% of a print customer.  It's going to take a long time for the value proposition to change.

Think of what's going on as the "Google Ad-Word-ization" of content. Just as attorneys are paying Google $51 for a click on the keyword "mesothelioma," marketers  know what counts is quality not quantity.  Vonage spent $254 for each new customer it signed up last quarter.  The average revenue per customer was about $26.  That is not a good business model. 

Do you have any doubt Vonage (NYSE:VG) would eagerly buy ads on a Web site or blog that could deliver its message to someone who, (1) has broadband, (2) wants to save money, (3) makes a lot of long distance calls, (4) has service from Verizon or another telcom, (5) and likes to be the first on his block with the new stuff.  That's a prospect!

Publishers are learning this new math, the hard way. Just as with general interest magazines, general interest blogs will shrink and fade.  I hate to say it again, (Dan Farber) but small is the new big.

Disclosure: I own shares of Time Warner


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