Content Matters: Blogonomics

Consumer Reports Acquires An Edge

In case you missed this during the holidays, Consumers Union, parent of Consumer Reports magazine, has acquired the Consumerist blog from Gawker Media. While the deal size is small - estimated to be $1-2 million by Silicon Alley Insider, it's a terrific acquisition for Consumers Union.

Consumer Reports is an amazing brand. It's one of the few (non-sex-related) consumer brands that has proven it can sell paid subscriptions via the web, with over 2 million online readers. Their challenge has been demographics. Their print readers are in their sixties and seventies, while their online readers are in their forties and fifties. If they simply stay the course, they'll need to rely upon cryogenics to have a sustainable model over time.

I've previously suggested that Consumer Reports look to bring in more user-generated content to liven up their site. While their efforts to-date have been slow and cautious, the acquisition of Consumerist suggests they are ready to take a bigger plunge. Consumerist attracts a different demographic, with 70% of their readers being males age 18-34. They deliver high quality content but retain the edginess and snark of the Gawker brand.

The biggest challenge in any acquisition is the integration of disparate cultures. I can't imagine two more different cultures than the sensationalist page-view-driven world of Nick Denton compared to the nonprofit, avoid conflicts of interest at all costs world of Consumer's Union. Yet in many ways, Consumerist never fit the true Gawker mode. While the writing style is similar to other Gawker titles, it's focus made it difficult to attract advertisers. Of course, as a Consumers Union site, that won't be an issue. And while the Consumerist readers seem unlikely to buy print subscriptions to Consumer Reports, they're certainly targets to sell car buyer reports and other CU titles and could serve as the centerpiece of a user-generated content component for CU.

Publishers seeking to build online traffic should continue to look at blogs as possible acquisitions. In this market, it won't cost very much to buy traffic which can later be monetized in various ways.

Barry Graubart on January 06, 2009 in Blogonomics, Content Business, M&A, Social Media | Permalink | TrackBack (0)

Technorati Tags: Blogonomics, Consumer Reports, Consumers Union, M&A, the Consumerist

Who's making money in online news?

With the possible exception of porn, no industry has been more impacted by the Internet than news. But while most of the focus has been on how web-based news has killed the traditional newspaper business model, less attention has been paid to how the new sites have changed the ways in which consumers consume the news.

New consumption models, combined with a seemingly endless array of sources, have resulted in a vast, highly fragmented industry, chasing limited advertising dollars.

That’s according to a new report by Lauren Rich Fine, research director for ContentNext Media. Fine recently joined ContentNext (publisher of PaidContent) after a nearly 20-year career following media and newspapers for Merrill Lynch.

In this challenging market, which sites are seeing strong traffic growth and who’s making money?

Not surprisingly, the dominant online news brands are many of the same that you’d see in the offline world. Brands like CNN, MSNBC, the New York Times and Gannett are all among the ten most visited news websites. Three online-only sites are in the top ten – Yahoo!, AOL and Google. But while the big media brands may dominate overall traffic, independent niche news and blog sites are growing rapidly and rising in importance. Fueled by the 2008 U.S. elections, sites like HuffingtonPost, Politico and RealClearPolitics.com saw their traffic at least triple this fall, surpassing that of many more well-known brands. These sites tend to differ from the more traditional media, in that they provide more opinion and commentary and typically have a defined bias, which helps users self-select the news sites they wish to read.

The scale offered by larger organizations clearly helps in monetization. Smaller sites are dependent upon ad networks, while large sites or groups of smaller sites under a single owner can maximize CPM rates through use of a direct sales force. Yet, the study points out that smaller, focused sites can be profitable through aggressive cost management.

The report also looks at recent M&A transactions, noting that only 7 news-related acquisitions have occurred in the past 18 months, with another 14 investments. Of those seven deals, the largest was a traditional media deal, Cablevision’s acquisition of Newsday. Only two were for political commentary sites: Forbes’ acquisition of RealClearPolitics.com and Roll Call’s purchase of Capitol Advantage, suggesting some sites may have missed their peak opportunity to sell during the 2008 campaign.

On the venture investment side, two sites, Digg and the HuffingtonPost received large amounts, both 3^rd round investments. The remaining investments tended to be smaller, early round investments. According to the report, the challenge for these sites in attracting venture investments is that their upside remains modest, while capital requirements are also fairly low (obviating the need for large VC investment). That suggests that entrepreneurs seeking to build niche sites should stick with angel investors and build the business organically.

The report, Size Doesn't Matter: An Analysis of Online News and Political Sites, includes case studies and profiles of many top online news sites, and is available for purchase at the Alacra Store.

Barry Graubart on December 17, 2008 in Blogonomics, blogs, Content Business | Permalink | TrackBack (0)

Technorati Tags: ContentNext, news, online news

After the Election: How Will Political Sites Fare?

Traffic to news and political websites soared in the months leading up to the election. So, now that the election is over, how sustainable is that traffic?

Nate Silver, of fivethirtyeight.com, which was created to track the political races, takes a quick glance at traffic patterns in the week following the election, as compared to the three months prior to November 4. This quick analysis was done using Alexa rankings, which are significantly less reliable than say a Gallup poll. With that caveat in mind, the results are still interesting.

TheAtlantic.com, which features popular bloggers like Andrew Sullivan and Marc Ambinder, has actually seen its post-election traffic exceed that during the pre-election period, as have the Drudge Report and the Huffington Post. My guess is that political junkies following reports of cabinet appointees and the final Senate races are consolidating their efforts on these news and analysis sites while general news sites and those focused solely on the horse race have seen their traffic dip. The Atlantic may also be helped by Sullivan's heavy coverage and commentary on post Prop 8 activities in California and around the country, along with analysis of the future of the conservative movement in the US.

Here are the numbers, courtesy of fivethirtyeight.com.

TheAtlantic.com         125%
DrudgeReport.com      124%
HuffingtonPost.com     109%
NYTimes.com               97%
WashingtonPost.com    82%
FOXNews.com              78%
TalkingPointsMemo.com 71%
DailyKos.com           68%
Slate.com                    67%
RedState.com              66%
NationalReview.com      63%
FiveThirtyEight.com      59%
Politico.com                55%
Pollster.com                37%
BarackObama.com      37%
Electoral-Vote.com      30%
RealClearPolitics.com 25%
RasmussenReports.com 15%
Gallup.com                 12%
JohnMcCain.com          9%

To no surprise, traffic to JohnMcCain.com has slowed to a trickle. Pollsters Gallup and Rasmussen have also seen traffic dry up. One site that may find reason for concern in these numbers is RealClearPolitics. While RCP was aggregating poll data, they aim to be much more of a political news and commentary site and the drop off in traffic suggests they have not yet found a sustainable audience.

As for Nate Silver's own 538, it has held 59% of its traffic, which is probably better than they might have expected. 538 has been pretty active in tracking the recount efforts in Alaska and Minnesota and the Georgia runoff, so perhaps that's keeping their traffic alive. In his post, Nate promises to soon share his future plans for the site. Previous notes have indicates that the statistician hopes to leverage his site to project likelihood of legislative initiatives passing.

I was surprised that none of the political media sites were acquired earlier this year, in anticipation of gaining election-focused traffic. Perhaps there was concern among acquirers that the traffic was not sustainable, or the bloggers were simply too busy and focused on the elections to analyze their sites as a business. If any of these sites can maintain their traffic in the coming months, they'll have proven their long-term viability and should easily find suitors.

Barry Graubart on November 22, 2008 in Blogonomics, Content Business, Current Affairs | Permalink | TrackBack (0)

Technorati Tags: Andrew Sullivan, blogs, election coverage, fivethirtyeight.com, Nate Silver, the Atlantic

Conde Nast Portfolio and Blogonomics

It's no surprise that Conde Nast is cutting back spending, particularly at Conde Nast Portfolio. After all, Time, Inc. is cutting more than 600 positions and the bloodbath will only get worse as the advertising spend drops further as we head into 2009. Conde Nast had been somewhat sheltered by being privately held, but there was little doubt they would have to cut costs as the economic situation worsened.

What is surprising (at least to me) is that the bulk of their cuts are being made to their online properties. According to the NY Times, Conde Nast will cut publication of the printed magazine from 12 to 10x per year, while "most of Portfolio’s Web site staff would be dismissed and that much of the content unique to the site would be dropped."

Portfolio is one of the few printed magazines to which I still subscribe. I don't read it cover-to-cover, but I've found it to be good beach reading - part serious, part fluff, but well-written and laid out.

What Portfolio had done well, however, was to develop a strong group of online blogger voices. And those blogs are the reason many readers come back to the site (or at least via RSS). While it's not easy to monetize those pages, they are creating an audience of users who visit the site on a regular basis and who provide the credibiity for the brand. I've previously named Felix Salmon's Market Movers blogs to my list of ten best financial blogs, but Portfolio also has interesting bloggers covering economics, media and other segments. It seemed that Portfolio was positioning itself well for the new economy while also supporting a traditional media business. But, alas, it seems that when push came to shove, Conde Nast was more comfortable selling pages in a glossy book than in driving online growth. While that may be a good short-term decision, I think it will hurt them in the long run.

The good news is that it appears that Felix will remain at Portfolio.com, at least for the near-term. And in his own analysis of the situation, Felix reiterates the arguments that I've long been making - that bloggers are an economical way to build traffic and a brand:

But if you are going to invest in your own editorial content, bloggers are often a very smart way to go. They're lean, since they need very little editing and often work from home. They build a reliable readership: in a world where loyal readers are defined as those who visit five times a month or more, blogs often get readers coming back more than once a day, especially if and when the comments streams get lively. And, yes, they're cheap, compared to any other original content. On a dollars-per-word or even on a dollars-per-pageview basis, it's hard for other forms of editorial content to compete with bloggers.

Barry Graubart on October 31, 2008 in Blogonomics, blogs, Content Business, Finance | Permalink | TrackBack (0)

Technorati Tags: blogonomics, Conde Nast, portfolio.com

Some Bloggers Making Big Bucks

Last week, Technorati wrapped up its 2008 State of the Blogosphere study. Part 4 of that study focused on blogonomics. According to the study:

Among active bloggers that we surveyed, the average income was $75,000 for those who had 100,000 or more unique visitors per month.

Of course, any calculation of average is swayed by those at the high-end and I suspect that's even more so in this study. The study notes that the median for this same group was just $22,000 per year and my guess is that a number of participants may have "rounded up" their estimates.

My takeaway from the study is that there remain a handful of "professional" blogs and blog networks that are generating strong page views and reaping the rewards with CPM rates comparable to other websites. This makes sense as many of these are simply an online version of what might have been a magazine were it launched ten years earlier. For aspiring bloggers the reality is that you're more likely to earn beer money than to be able to quit your full-time job.

Barry Graubart on October 05, 2008 in Blogonomics, blogs | Permalink | TrackBack (0)

Technorati Tags: blogonomics

Financial Blogging Panel at Blog World

So, here I was worried that we wouldn't have anything interesting to talk about at the Blog World Financial Bloggers panel this Saturday. The Dow drops a thousand points and suddenly everyone's interested in Wall Street again.

If you're planning to be in Las Vegas for Blog World, be sure to circle 2:45pm Saturday for this panel. For those who've been following my "ten best financial blogs" series of posts, three of the top five will be represented on the panel - Paul Kedrosky, Felix Salmon and (Wallstrip founder) Howard Lindzon. And the fourth panelist will be Jim Ledbetter, who timed the launch of Slate.com's new The Big Money to coincide with Mondays' five hundred point drop.

We'll discuss the current investment climate but will also dig in on topics such as blogonomics, blogs' impact on the rumor mill, the convergence between trade publishing and blogs and many other topics. What questions do you want me to ask? Put your thoughts in the comments below.

If you plan to attend Blog World, drop me a note when you're there. You can email me at barry - at - graubart - dot - com, or send me a tweet @graubart. I look forward to seeing you there.

Update: Dow Jones Newswires has posted an advance article on the Blog World financial blogging panel.

Barry Graubart on September 18, 2008 in Blogonomics, blogs, Events, Finance | Permalink | TrackBack (0)

Technorati Tags: Blog World, Financial Blogging

The Ten Best Financial Blogs

In a couple of weeks I will be moderating the Financial Bloggers’ Panel at BlogWorld in Las Vegas. Financial blogging was one of the first growth segments for blogging and there are numerous compelling financial blogs today.

Like the financial markets themselves, financial bloggers are somewhat more diverse than blogs of other industry segments. They run the gamut from macroeconomics to fundamental analysis to technical analysis blogs. The bloggers include many practitioners from the financial community, economists, academics, business writers and numerous individual investors.

Over the next few weeks, I will post my list of the Ten Best Financial Blogs. For purposes of this list, I am including blogs that are financial in focus and excluding those which are focused on a given market segment. I’ve also limited the list to blogs which are free and open; FT Lex is one of my favorite blogs but they keep it behind the pay wall, so it won’t make the cut. Last, I plan to exclude aggregators. SeekingAlpha and Blogging Stocks are great sites, but they aggregate of dozens of blogs, so they don’t qualify for this list.

So, what makes a blog a top ten blog? Like any top ten list this is a qualitative decision based upon my likes and dislikes. But here are a few of my criteria:

It should make me think; the blogosphere is an echo chamber and there are dozens of places to get the news. My top ten are sites where the author has uncovered new information or provides new perspectives on existing data.
If not entertaining, it should be at least readable. There are limited hours in the day and I can’t spend my time reading drab comments. Some on my list are downright funny, others are a bit snarky but all qualify as infotainment.
It points me to things that I would have otherwise missed. One of my favorite blogs (though as an Alacra blog, it wouldn’t be fair to include it in my top ten list) is our own Research Recap. The primary role of Research Recap is to help financial and business professionals find nuggets of useful information which they would have otherwise missed. While none of them are quite as focused as RR, most of the blogs on my top-ten list view this sharing role as part of their mandate.

I welcome in the comments your thoughts on the blogs I’ve selected and those I may have missed.

Barry Graubart on September 03, 2008 in Blogonomics, blogs, Content Business, Finance, Ten Best Financial Blogs, user generated content | Permalink | TrackBack (0)

Technorati Tags: Blog World Expo, blogs, financial blogs

Blog World Financial Blogger Panel

I’ve been asked to serve as moderator of the Financial Blogging panel at BlogWorld, to be held September 20-21 in Las Vegas.

We’ve got a great panel planned. The panel, entitled “How Financial Blogs Influence the Markets” features four compelling panelists:

•    Paul Kedrosky, author of the Infectious Greed blog and frequent CNBC guest. Paul is also a senior fellow at the Kauffman Foundation and a strategist with southern California quant firm Ten Asset Management.
•    Howard Lindzon, founder of vlog WallStrip (acquired by CBS) and author of the Howard Lindzon blog. Those who’ve seen Howard’s television appearances or follow his tweets @howardlindzon know that he’s funny and provocative. Much like possible VP candidate Joe Biden, when Howard opens his mouth you have no idea what he might say.
•    Felix Salmon, author of the Market Movers blog on Conde Nast Portfolio.com. Felix has the eye of a skeptic and often points out gaps in premises taken as fact by others. His days working for Nouriel Roubini keep him from seeing the rosy side of things. He’s been a leader in discussions of blogonomics and, of course, maintains the (sort of) weekly Ben Stein Watch, where he notes the often ludicrous statements made by comic actor cum financial writer Ben Stein.
•    Jim Ledbetter, editor of The Big Money, a new financial website to be launched by Slate.com. Jim, a veteran financial writer, formerly served as deputy managing editor of CNNMoney and previously was a senior editor at Time and editor-in-chief of The Industry Standard Europe.

The panel brings together a mix of practitioners and financial journalists, independent bloggers and media-owned properties, all bringing unique perspectives to the discussion. And, the panel is geographically diverse with two Canadians (Paul and Howard) and a Brit (Felix).

Blog World should be a fun event. Other speakers include Steve Rubel, Chris Brogan, Robert Scoble, Doc Searls, Jane Hamsher, Zappos CEO Tony Hseih and dozens of others. If you’re not already registered for BlogWorld, here’s the Blog World registration page.

Financial blogging is one of the more interesting segments of the blogging space. Despite the huge financial news presence of companies like Bloomberg, Dow Jones, Reuters and various newspapers, blogs frequently are ahead of the mainstream media in grasping the significance of key trends. Alacra’s own Research Recap was writing posts about the emerging subprime crisis months before the Wall Street Journal picked it up. During the panel, we’ll discuss why that’s the case. Other topics I plan to cover include blogonomics, the impact of microblogs like Twitter and whether blogs are rapidly becoming the new form of trade publication.

What questions would you like to see the panel discuss? Post your ideas in the comments or send me a tweet @graubart.

See you in Vegas...

Barry Graubart on August 20, 2008 in Blogonomics, blogs, Content Business, Events, Finance, Social Media, Web 2.0 | Permalink | TrackBack (0)

Technorati Tags: Blog World, conference, financial blogging

Blogonomics: Top Targets and Potential Suitors

A few months ago, Doug McIntyre at 24/7 Wall Street published a list of the top blog acquisition targets, along with potential valuations. The list was fairly comprehensive and already, two of the companies have been picked off - Ars Technica by Conde Nast and PaidContent by the Guardian.

Now, 24/7 is back and they're taking the list to a new level, trying to act as matchmakers. The new list, which adds a few new blogs, proposes likely acquirers for each target. For example:

Huffington Post to the Washington Post
Gawker to Time Warner (People/TMZ)
Perez Hilton to Viacom/MTV
Seeking Alpha to MSN/Money

The full list is on the 24/7 Wall Street site. I continue to expect that the second half of this year will bring at least 3-4 more blog acquisitions. B2B blogs are the new trade magazines but without the traditional cost structure. I think it's likely that TechCrunch, GigaOm and Mashable will be acquired soon with financial blogs not far behind. The political blogs like HuffPo, Talking Points Memo and Drudge would be well-served to shop themselves right now as political interest heats up. I'd guess their values will drop by a quarter or more after inauguration day.

Barry Graubart on July 18, 2008 in Blogonomics | Permalink | TrackBack (0)

Technorati Tags: 24 7 Wall Street, blog valuation, blogonomics, M&A

Guardian Media Acquires PaidContent for $30 Million +

Congratulations to Rafat, Staci and the PaidContent team.
Kara at All Things D is reporting that UK-based Guardian Media Group has purchased the Content Next, parent of PaidContent for "north of $30 million".
PaidContent recently celebrated their fifth anniversary and has been a case study in how to develop a professional media blog, growing the business with multiple sites and adding events.
This reinforces what I've said previously about blogonomics. Expect more deals to come in the next 6-12 months, especially with the cheap dollar.