August 2005

The Business of Blogging

Could it make money?

By Andrew Madden

The case: Blogs are the soapboxes of the Internet era--independent platforms for everything from personal diatribes to political discourse to tech-gadget reviews. But with their growing popularity, could blogs also become media platforms capable of making money? Two entrepreneurs are trying to find out.

Depending on whom you talk to, Web logs, or blogs, inspire excitement, alarm, or a yawn. They are the personal diaries that now litter the Web, composing a newish online medium that is simplicity itself.

Most blogs consist of musings posted to idiosyncratic and amateurish websites. But while blogging is a favored mode of expression for blowhards of every stripe, it is also the basis for a new crop of editorial products with high-quality content and loyal readerships. Over the past several years, blogs have become platforms for political discourse, Hollywood gossip, and insider information on subjects ranging from the latest Apple operating system to presidential-election results.

Several factors have contributed to the emergence of blogs. First, they can be started with very little, and very inexpensive, editorial content yet are capable of exerting extraordinary influence. Blogging software is inexpensive -- or often free -- and easy to use. Low bandwidth requirements and Web-hosting fees keep the ongoing infrastructure costs of maintaining a blog very low. And new, easy-to-use advertising services such as Google AdSense, which frees content creators from having to deal with actual advertisers, have breathed fresh life into online media.

The accessibility and ease of use of blogs have had a dual effect, a simultaneous erosion and improvement of quality. At the low end, blog-platform sites like LiveJournal and Xanga provide an outlet for hobbyists and diarists. More-serious bloggers, however, have increasingly approached their sites as they would any other sort of editorial platform, with regular publishing schedules and clear editorial missions. These bloggers tend to use more-sophisticated software than do more-casual bloggers. One such tool is Movable Type, made by San Francisco-based Six Apart. Movable Type is customizable and can help make a blogger's postings look professional.

All these trends are leading a number of media entrepreneurs to wonder whether blogs can generate meaningful revenues or, for that matter, offer a legitimate alternative to the business models of existing media companies.

Two of those entrepreneurs are Brian Alvey and Jason McCabe Calacanis. They are the cofounders -- Alvey is president and Calacanis is chairman and CEO -- of Weblogs Inc., a network of 80 blogs. The pair bootstrapped Weblogs with their own funds, and barely 18 months after the network's January 1, 2004, launch, they were already earning revenues. But it remains to be seen whether the business model will deliver profits.