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November 30, 2005

Blog exit plan? We're just getting started

Stephen Baker

I'm reading more and more about the market value of blogs--and believing very little of it. Maybe I'm blind to opportunity, but I think the overwhelming majority of our blogs have little or no market value unless the blogger is included. And that's less a sale of a blog than a blogger getting a job.

Others see things differently. Consider this post from Performancing.

Here are their questions:

Do you as a professional blogger have an exit strategy?

Where do you want your blog business to be in say 2 years time?

Are you positioning your blogs with an eye to a big payday or for long term organic growth?

Who might be likely purchasers of your blog business?

Have you considered the potential for a stock market flotation at some point?

Am I missing something, or are we getting way ahead of ourselves here?

07:32 AM

M&A

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? Exit Strategies Are for Quitters from http://www.ideagrove.com/blog/index.html#112938568736465461

Having read Peter's entire post, I can't say Stephen is being particularly fair. Peter is only making the point that "there will eventually be consolidation in the blogosphere as there has been in every industry before it. Casting a cursory eye towar... [Read More]

Tracked on November 30, 2005 10:20 AM

? Are Blogs Worth Anything Without the Bloggers? Maybe? from B.L. Ochman's weblog - Internet and corporate blogging strategy, and online marketing trends, with news and commentary

Peter Brady at Performancing envisions bloggers going public and Stephen Baker at Business Week thinks that's not bloody likely. The truth is somewhere in between. With stunning optimism, Brady suggests that bloggers should have an exit strategy for th... [Read More]

Tracked on November 30, 2005 01:35 PM

Welcome to the real world, Stephen. Maybe you are getting close to the point where you will spend some time discussing the merits of managed, measured off-line forums?? You have my number.

Posted by: Doug Skoglund at November 30, 2005 08:26 AM

Doug, Just to be clear: I think blogs are plenty powerful. But as businesses, they're not easy to sell.

Posted by: steve baker at November 30, 2005 10:25 AM

I think your absolutely right Stephen, we are getting way ahead of ourselves here. In fact I am often posting about how bloggers in general, need to pour an awful lot of cold water over themselves, and get some serious perspective.

However, I spent many years business modeling on billion dollar real estate projects and if there is one thing I have learnt, it's the importance of a coherent business strategy which may have to include a cursory look at how you might exit in the future. Should a business plan for a blog/blog network be any different. Maybe Jason Calacanis is best placed to answer that one.

I would be the first to agree that most blogs have negligible value as it stands (I should have made this explicit in my post) and it was not my intention to highlight a floored get rich quick strategy, although I think the folly of that was clearly stated. Nonetheless, are we saying that within the timeline of a conventional 5 year business plan, there is no prospect for blogs and blog networks to become valuable online real estate, because I'm afraid that I must place myself in the eternal optimist camp, if that's what's being insinuated.

I think the confusion here was down to me not being explicit as to the time frames involved in potentially realising an exit and for that I apologise. Blogging is an embryonic industry of that there is no question and it has a lot of growing up to do before we see some of the big consolidation deals I alluded to in my post. But is it really that silly to think that scenario maybe a possibility 3,4 or 5 years from now? Is it silly for a blogger to give that some consideration when writing his business plan this evening?

Thanks for highlighting this Stephen, it is sometimes all to easy to leave an important piece of explanation from a post.

Posted by: Peter Brady at November 30, 2005 11:41 AM

Peter,

I think we should distinguish here between two types of bloggers. One type, the vast majority, writes their own blogs. The second type, people like Calacanis and Nick Denton, hire bloggers. Those people would be insane not to have a business plan. For the rest of us, it certainly makes sense to have a plan: How much time am I going to spend, how am I going to drive traffic and advertising, etc. But even successful bloggers face the issue I mentioned in the post: They're not selling the blog, they're selling themselves. Buzzmachine, for example, is a very successful blog. But how much would it be worth if Jeff Jarvis sold it without including his own services?

Posted by: steve baker at November 30, 2005 11:52 AM

Blogging is not about "the blog." It's about the content -- which is derived from the person (or, persons, in some cases) providing the content (i.e., the blogger).

Sure cites like Gawker with more than one poster are much more business operations than just blogs. They are media.

But, most blogs are nothing without their blogger. Take away the blogger, and you have white space.

Mike

Posted by: Mike Driehorst at November 30, 2005 01:21 PM

Thanks Stephen you make some interesting points.

I think you misunderstand me here. I am talking medium to long term. How many people will be starting a blog this very day with no thoughts to the commercial side, but will soon discover there maybe a business opportunity. Who knows, they may ultimately end up employing others to write content on multiple blogs and who knows they might even be in a position to sell that business a few years from now.

Are you seriously suggesting that they should not write a business plan because their not in the same category as the Dentons and Calacanis' of this world.

As far as selling the person instead of the blog I think you are still thinking now rather than 3,4, 5 years down the track, which is what i was trying to allude to in my post. I suspect the face of blogging will have changed a great deal by then. That you will have many disparate commerical blogs and networks out there with predominantly multiple content providers (as per the weblogs and gawker businesses) which will ultimately end up in mass consolidation. I am not saying that one man bands like Jeff Jarvis will disappear, the complete opposite. But what I believe will happen is a big increase in the number blogs operating with multiple writers. You only have to look over the last year to see how much that way of doing things is growing. If this turns out to be the case then the one man band of today who grows into a multiple content provider may end up being a target for consolidation. Afterall, how many bloggers are already operating multiple blogs, is it such a great leap of thought to consider that they may some who eventually employ multiple writers as well? Which brings me back to the purpose of my post, which was to maybe give some cursory consideration to that scenario or maybe even think about whether that is where your blog business should be heading.

Even if we are talking about one man band's like Buzzmachine are we apportioning zero value to the construction of a readership, archive material and the ubiquitous link count associated with that domain. By the way I have never and will never give any credence to the ridiculous link valuations you see. I'm just saying that these are surely things a future acquirer would give consideration to, in conjunction with the quality of the writer.

Further, having worked in the real estate industry for many years I have seen the problems first hand of acquiring serviced based companies with key figurehead personnel. In every situation that I came across, that was more than adequately overcome by hand cuff deals of various descriptions. I see no reason why that could not be applied to the acquisition of a successful single source blog.

Jeff Jarvis take note :-)

Interesting debate.

Posted by: Peter Brady at November 30, 2005 01:30 PM

Bloggers are simply stand-alone columnists, or perhaps news transmitters. I read somewhere Marconi's early description of telegraph vs radio:

"Telegraph is like a 3,000 mile dog lying down. His tail is in England and his head is in New York. You tread on his tail in England, and he barks in New York. Radio is just like telegraph. Except there's no dog."

In the same way, I think blogs are like newspapers. Except there's no newspaper.

In other words, sure there's some value, a little, but not 3,000 miles-worth of VERY expensive undersea cable, nor a thousand employees and a lot of dead trees.

Posted by: Andrew Denny at November 30, 2005 03:45 PM

Steve,

As a multi blogger participating at one time in three group blogs and a personal one, I must agree with Peter Brady's comment above on the future, and sooner than the 4 or 5 years that Peter's forecasting. While some things I must keep under wraps for my own good :) I'll throw out some revenue generation possibilities around a blog - with or without the "blogger".

1. Famous author writes a blog which is a serial novel - if it was rivetting enough, wouldn't you pay to read the next installment, say a month in advance, or even, pay for the archives i.e. the book, or the story, in a blog

2. Group blogs on specific event oriented conferences - note the popularity of ITConversations in downloads of conference proceedings. I predict hosting your own conference blog, allowing password protected access to registered attendees, and post conference selling password to those interested in videoblog downloads, PDF's and powerpoints. I see the market particularly in research and universities - they are already accustomed to paying for research documents and articles.

3. Group blogs managed by an editor, on one topic or niche, like PSFK for example or the Core77 blog. Couldn't every 5th post be a teeny little sponsor's message? Ever so much more elegant that nasty old RSS feed advertising which just jars the reading process.

Enough there, but the potential in an individual's ability to keep chronological archives of their daily lives is already being mentioned as "virtual ethnographic research" considerably cheaper than the real thing if you're studying Shanghai or Seoul. Here's the link http://blog.vanderbeeken.com/2005/11/virtual_anthrop.html

I am looking forward to the future.

Posted by: Niti Bhan at December 1, 2005 01:04 AM


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