Valleywag
The new tech boom is nothing like the last bubble! Honest — this time we have blogs!
It was silly enough when tech blogger Om Malik took a few hundy thou for his GigaOM blog network, even sillier when we heard that lawyer Michael Arrington tried to get venture capital for his blog TechCrunch (his deal fell through). The whole point of blogging is that it hardly costs anything, so it's easy to pull a profit within a few months. Why would these two take funding that beholds them to investors?
And why the hell did the little b5media blog network take $2 million in funding?
One of the investors tries to explain, but he gives all the wrong reasons.
- "With information overload comes opportunities on a number of fronts. The most obvious is authority." Which b5media doesn't have. Why not invest in someone who's already established some of that?
- "The next opportunity is a chance to execute on Doc Searl's [sic] vision/theory of the intention economy... While many will dismiss this as just blather about making money with ads, I believe there is more to it." No there isn't. The "intention economy" is Doc Searls rediscovering the targeted advertising market. Nothing special.
- "Finally, there is Shel Israel." Exactly. The blogger has spent more time and words on the Internet than Perez Hilton, Gawker's Jessica Coen, and probably not too much less than Boing Boing's Cory Doctorow, but he's not even a B-lister to their A-list. Shel's tendency to waste hours on comment-thread arguments makes him a liability.
- When the investor capitalizes the company name differently than the company's web site does, that's a red flag.
But hey, if someone wants to throw $2 million at the most overhyped of the dozens of small-time blog networks, at least it'll make it more fun when the company implodes.
b5media raises US$2 million [b5media]
Our B5 Media Investment [Rick Segal]
Comments
My little amigo Nick,
When you decide to skewer somebody, you do it with verve. I raise my morning Cuba Libre to you.
Blogs are horrible... hey wait, that's not right?
speaking of implosions, I saw one last weekend..
http://paulstamatiou.com/video/MOV06207.MPG
scathing
When keepin' it real goes wrong...
I'm sure if Duncan and the boys had funds lying around from previous successful company buyouts then they would invest it into b5 like Nick Denton has done with Gawker. But they didn't, so they couldn't, so VC is the next best thing. What would you have them do, stay small?
Not everyone has a big warchest lying around from previous company buy-outs, Nick, to invest back into their new business. Duncan and the lads didn't, so they couldn't, so they chose the next best way to grow. What would you have them do, stay small so that they couldn't compete with Gawker on a level playing field? Oh, right.
bah, double post.
In my opinion, 9rules is a much better blog network (although it differs greatly from b5media, Gawker and Weblogs Inc).
Then again, I might be slightly biased as a 9rules member; but so might you as a Gawker blog :P .
These investors must be living in a timewarp, one where arts and crafts blogs written by stay at home moms and 20 blogs on crappy TV sitcoms can return on an investment. Gawker has various uber-successful blogs, WIN has Engadget and Autoblog, what does b5media have?
I'll tell ya.
http://www.sacreddollsandbears.com/
Sacred Dolls and Bears.
Om took funding so he could hire FT writing staff, as well as support PT technical staff for the GigaOm site. he also did it because he could get it, and because he knows/trusts the folks at True.
Mike likely hasn't taken funding yet because he's already profitable and doesn't need to, or he's holding out for a term sheet he likes; he could certainly get a deal done if he wanted.
can't speak for other folks in the category, but those two are head of the class. you're right in general blogs should be cashflow positive from the get-go, however for folks trying to build a multi-person / multi-site operation the capex isn't the same as if you're just an indie blogger.
(that said, i'm sure Vwag is doing just fine -- keep up the good work Nick, and you too could be smokin' fatties with the folks on Sand Hill ;)
So Mike, I guess you are trying to say that a successful blog written by a stay at home mom is crap? So sad you have to sink so low to say such a thing.
Deserve it or not, they got it.
Also blogs are a lot of work, they're news outlets. If you have 100 blogs and are only able to produce content on them once a day how can you keep up with those blogs that are pumping out 2, 3or 10 articles a day. You can't, so you hire more writers, you need money, there's the need.
You become more of a news reporting company that uses the blog format rather than the rage against the machine blogger type that it appears you associate with.
Sweet article though, it's good that someone has the balls to speak their mind rather than everyone else sucking up to every popular blogger out there in hopes to get a mention (oh wait, I think I might be in that category)
FYI - I just completed an interview with Jeremy the b5media CEO. Check it out here:
http://www.centernetworks.com/interview-with-b5media
Start a discussion:
Login with your username and password below. Or comment on this post via email.
Forgot your username or password? New User?