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Blogs to Riches

Joshua Micah Marshall  

In scientific terms, this pattern is called “homeostasis”—the tendency of networked systems to become self-reinforcing. “It’s the same thing you see in economies—the rich-get-richer problem,” Shirky notes.

To see just precisely how rich blogging can make you, it’s worth visiting Peter Rojas, the cheerful, skate-punk-like editor of Engadget—and the best-compensated blogger in history. When I meet him one December evening in his apartment on the Lower East Side, he’s sitting at an Ikea desk bedecked with three flat-panel screens and looking relatively fresh, considering he’s just come off another eleven-hour blogging jag. Like most A-list bloggers, he hit his keyboard before dawn and posted straight through until dinner. “Anyone can start a blog, and anyone can make it grow,” he says, sipping a glass of water. “But to keep it there? It’s fucking hard work, man. I’ve never worked so hard in my life. Eighty-hour weeks since I started.”

For Rojas, the toil paid off handsomely. Last fall, AOL bought Jason Calacanis’s company Weblogs, Inc., which includes Engadget, for $25 million. Rojas himself didn’t disclose the precise amount he got from the deal, but he had a good deal of equity in the company and says that, technically, he doesn’t need to work anymore. Nonetheless, he’s still slogging away at Engadget because he’s still obsessed with cool new technology. His idea of a good time is hunting down samizdat pictures of the latest Palm Treo. “I didn’t intend to become a millionaire,” he says, “but I wound up there anyway.”

Very few bloggers have come anywhere close to Rojas’s struck-by-lightning success, of course. But putting that sort of good fortune aside, the blogosphere is slowly developing solid business models, which take roughly three forms.

The first—and most common so far—is the accidental tourist: A lone writer who starts a blog as a mere hobby but then wakes up one day to realize his audience is now as big as a small city newspaper. The liberal journalist Joshua Micah Marshall went this route: He started the Talking Points Memo blog during the November 2000 election recount “just for fun,” and his audience grew slowly, reaching 8,000 a day in the first two years. Then, in December 2002, he broke news of racially charged comments by Senate Majority Leader Trent Lott, and his audience surged to 40,000 daily. The blog was eating so heavily into his paying gigs that Marshall began soliciting donations from his readers; in 2003, he signed up with Blogads, an advertising broker, and by this January he was grossing in the low six-figures. Talking Points Memo has become a small company with three full-time staffers and an office in Manhattan. His daily traffic is 150,000 page views, and he now charges advertisers up to $5 per 1,000 views. “When I started it, I had no idea it would become a source of income,” he says.

A variation on this theme is when a lone blogger teams up with the mainstream media. Andrew Sullivan is the first example of an endgame strategy that may become quite common in the future. In 2000, Sullivan started his blog, The Daily Dish, as a part-time sideline, funding it via donations and ads for five years. Then in January, Time magazine agreed to lease his URL for one year, making it part of its online offerings. Though Sullivan says “I didn’t get rich,” he figures the deal will earn him almost half his income this year.

For advertisers, the whole lure of blogs is that they’re cheaper than regular newspapers and TV. Plus, blogs offer tightly focused niches, which advertisers love. “You wanna reach New York, you buy on Gothamist. You want to reach mommies, you buy on Busy Mom. How does traditional media match that?” asks Brian Clark, an ad buyer who orchestrated Audi’s blogvertising last year. The Audi campaign—which ran online for three months, and got 68 million page views, and cost only $50,000—was cheap compared with the $500,000 for a Yahoo front-page banner that runs for only one day.

According to Henry Copeland, founder of Blogads, the first big wave of advertising emerged during the 2004 election season, when political campaigners and interest groups realized that advertising on political blogs was more powerful than direct-mail appeals. “It’s really the audience—younger voters who are motivated and interested,” says Michael Bassik, a political consultant who ran online ad campaigns for John Kerry and other Democratic candidates. Perhaps more important, blogs are buzz-creation machines: If an ad campaign appears on the blogs, it’ll often become a subject of conversation among the bloggers. “They’re social connectors,” Bassik says. Yet each blog has a different sphere of influence. To get a message out widely, he’ll buy on Daily Kos because it has the largest readership of any liberal blog (though it’s also the most expensive, at $4,000 a week). If Bassik needs click-throughs—someone who’ll click on a candidate’s ad, visit his site, and perhaps make a donation—he might buy Talking Points Memo instead, which has a smaller audience but a much higher click-through rate.