Is there money in blogs? The ever-sharp JD Lasica asks the question and then points to posts by Steve Smith (no) and Steve Rubel (yes). Smith argues that "blogging is less a business model than a thoroughly compelling communications model that keeps users coming back two and three times a day more effectively than standard content refreshes." Rubel points to the chain-blogging companies founded by Nick Denton and Jason Calacanis as the proof of business concept.
Well, they're both wrong - and for the same reason. It is a business model, but it's not about content.
Blogging is a phenomenon, but it's not new. Calacanis knows this; we published competing blogs back in the Silicon Alley days, but we didn't label them as such. They were newsletters, or online magazines, or communities, or whatever. They were online content - news and other items served quickly and with attitude and opinion. And yeah, we even had typos.
So in that sense, the revolution unfolded a decade ago. People communicate online. They publish. They argue. They send little goofy pictures to their friends. They type "L8R Dude" on computers. Yawn-o-rama, baby. It's 1996. And Bill Clinton's in the White House.
Which brings me to the business model. Which is software and hosting and services. Look, everyone's got a story to tell. Some stories will be compelling. Most won't. And only a very few bloggers will be compelling over time. But what is clearly exploding is the desire to tell a story and the ability to do so. This is where the software comes in. I think anyone who was publishing online in 1995 would tell you: we would have killed someone (probably our partners) to get our hands on publishing tools as good as TypePad, based on standards and formats as wonderful as open source and RSS. This is where the action is at.
Funny thing about Denton and Calacanis and their bog empires. I see they're making some dough now, and that's wonderful - especially for the army of underpaid, underemployed writers out there. But I tend to read Jason's blog and Wonkette, and that's it. There may well be a business model in creating the Primedia of blogs, all special interest and cross-selling. But it won't be huge and, I hate to say this, it won't be earth-shattering.
But the software is. TypePad is a fast-growing company. Because I invest in what I use, I'd buy stock if it was public. I also use a bunch of other tools on this little side venture of mine: BlogRolling.com, BlogAds, Google's AdSense and Search, Technorati, Bloglet, MyYahoo, Feedburner, Bloglines, Kinja, Feedster, Sitemeter, and Amazon. My revenue? Well, there is some and I'm thrilled at getting paying advertisers - not for the dough, but because people are reading and reacting, about a thousand of 'em a day. I think Fred feels the same way. And I'd bet even the megastars of blogging, like Jeff Jarvis (who is worth reading everyday) and Glenn Reynolds (who is most definately not) aren't in blogging for the dough - and they're the Oprah and Rush of blogging!
So blog on folks, I'm there with you. But don't expect to be paid for it - expect to pay for it. And invest in the software, that's the real action.
UPDATE: Fred weighs in on the question on his blog, and Jason in the comments section here. Both make good points. Go read Fred's, but his basic point seems valid: "There's money in blogs, for sure, and I think the big bucks will be made in scalable platforms that leverage all that is happening in the blog world." Hey Fred, that's what I meant to say - you said it better! Jason says hes basically doing just what Fred suggests with Weblogs, Inc. Hey Jason, can you add one desperately-needed feature? "Comments tracking"? Good stuff.
UPDATE II: Jeff Jarvis does a great job of creating a summary of potential revenue streams for blogging. Jeff's a true believer and I'm a confirmed skeptic in this area, but here's his take:
There's no question that there are big, society-changing things here and that people will make and lose big money on their bets. But which bets will win? Well, your guess is as good as mine.
UPDATE III: Silicon Valley VC Tim Oren jumps into the discussion. His take: From my point of view, the most differentiating characteristics of citizens' media are low barriers to entry, and precision. They are the two faces of the long tail phenomenon: Low entry barriers enable the creation of diverse content by diverse people, precision in access lets readers find matches to their tastes without unendurable overhead. More on his terrific blog.