Newsweek Columnist Says You Can’t Make Money Blogging

By Daniel Lyons
Newsweek

For two years I was obsessed with trying to turn a blog into a business. I posted 10 or 20 items a day to my site, The Secret Diary of Steve Jobs, rarely taking a break. I blogged from cabs, using my BlackBerry. I blogged in the middle of the night, having awakened with an idea. I rationalized this insane behavior by telling myself that at the end of this rainbow I would find a huge pot of gold. But reality kept interfering with this fantasy. My first epiphany occurred in August 2007, when The New York Times ran a story revealing my identity, which until then I’d kept secret. On that day more than 500,000 people hit my site—by far the biggest day I’d ever had—and through Google’s AdSense program I earned about a hundred bucks.

Over the course of that entire month, in which my site was visited by 1.5 million people, I earned a whopping total of $1,039.81. Soon after this I struck an advertising deal that paid better wages. But I never made enough to quit my day job. Eventually I shut down—not for financial reasons, but because Steve Jobs appeared to be in poor health. I walked away feeling burned out and weighing 20 pounds more than when I started. I also came away with a sneaking suspicion that while blogs can do many wonderful things, generating huge amounts of money isn’t one of them.

Now others seem to be riding the same downward curve, with euphoria giving way to exhaustion. Michael Arrington, whose TechCrunch blog empire attracts 6 million readers each month, has gone on a monthlong hiatus after three years of nonstop blogging. His break was prompted, he says, by burnout and by the craziness of the blogosphere (he says he’s been stalked, threatened and spat on) and not by the fact that he’s been trying to sell his company for a year and hasn’t been able to find a buyer who’ll pay his price, which is rumored to be $100 million. Gawker Media, a leading network of blogs, recently laid off all but one of its writers for Valleywag, its tech blog, which has struggled for three years. In January Pajamas Media, a collective of right-wing political bloggers, shut down its ad network, which CEO Roger Simon says “was a money loser for three years.”

In late 2005 a columnist who writes for the ABC News Web site predicted that by 2010 the blogosphere would create “a whole new group of major corporations and media stars” and that “billions of dollars will be made by those prescient enough to either get onboard or invest in these companies.” (He was responding to an article I’d done that criticized some elements of the blogosphere.) This guy was right on the first part, sort of. But as for those billions? Last year the total spent on blog advertising in the United States was a mere $411 million, according to researcher eMarketer. That represents only a sliver of the $23.7 billion spent on U.S. Internet ads last year, which is itself only a fraction of the $276.8 billion spent on all forms of advertising in the U.S. By 2012 blog ad spending will reach $746 million, while overall online ad spending will hit $32 billion, eMarketer says. More money was spent on e-mail advertising last year than was spent on blog advertising—yet you don’t see anyone touting e-mail as the next big billion-dollar media business. Technorati, a blog researcher, estimates that bloggers who run ads earn an average of $5,060 per year. Don’t call the Ferrari dealer just yet.

Advertisers shy away from blogs because they’re too unpredictable and because few blogs attract anything approaching a mass audience—and even those that do face so much competition that ad rates remain pitifully low. “A lot of expectations are coming down in terms of monetizing social media,” says Paul Verna, an analyst with eMarketer. ” People have not figured out a clear way to monetize some of these vehicles.” The bad economy compounds the problem, Verna says, but the real issue is “the lack of a clear business model that can generate substantial revenues.”

To be sure, some blogs are little goldmines. Gizmodo, a gadget blog run by Gawker Media, had record traffic last month, with 98 million page views, and is “fantastically profitable,” Gawker CEO Nick Denton says. Dooce, a personal-diary blog run by a husband-and-wife team, does between $500,000 to $1 million a year, according to Federated Media, which sells ads for the site. Arrington says TechCrunch did $3 million in 2007 and even more in 2008. He says he could sell the company today, albeit for a lower price than it would have fetched a year ago.

Those success stories keep money pouring into the space. The Huffington Post raised $25 million just a few months ago. The Daily Beast, led by editor Tina Brown, raised money from Barry Diller’s IAC/InterActiveCorp. for its launch last October. (Disclosure: Diller is a director of The Washington Post Company, which owns NEWSWEEK.) Then again, The Huffington Post and The Daily Beast aren’t really blogs —they’re media companies that happen to feature, among other things, the work of some bloggers. Some A-list bloggers have found that the best way to “monetize” their work is by returning to the much-maligned “mainstream media”—like political writer Andrew Sullivan, whose blog, The Daily Dish, now runs on The Atlantic Monthly Web site. Presumably Sullivan makes a decent living. But as for that vision of the guy in his pajamas making millions with a blog? Or that one about investors raking in billions by betting on that guy in the pajamas? Take it from someone who dreamed the dream: I wish it were true, but right now it’s looking like yet another high-tech fairy tale.
Article originally published at Newsweek.com

Blogging for Your Business

It’s almost a given now that if you have a website, you also have a blog. The question for small-business owners is: Is blogging, twittering, etc., really worth your time?

A lot of bigger companies have decided it is. Just check out this list of 50 companies and how they are using social media. In these examples, I think you can find what TO do and what NOT to do when it comes to promoting your business with social media.

Check out British Airways’ Twitter account. It looks like the subject lines of items in your junk mail folder. Why would anyone follow you to see that? Those who would are more likely to be annoyed than intrigued. What’s worse, there’s no touch of any kind of human voice to these entries. A machine is cranking these out, for all we know.

That’s fine for a big company like British Airways, but a small-business owner does not have the time to write and post things that nobody reads. If you treat your blog as an advertisement, no one will read it, because people don’t seek out advertising. They seek out interesting and thoughtful content. That comes from having a personal touch and displaying your expertise on your subject matter.

THE GOOD

Here’s the blog of Marriott Hotels CEO Bill Marriott.

Notice how it’s written in first person, like an actual blog that someone would seek out. Notice the use of pictures—again, content that people would seek out. Most importantly, it’s about subjects that are interesting and beyond the scope of the company, like John McCain and the Beijing Olympics. OK, so the post from September 8 resembles the adspeak that you do NOT want to do, but looking at the blog as a whole, I think it’s pretty good.

Instead of outright promoting your company on your blog, if you write about interesting subjects in your own voice, it will actually get read—and that’s what actually promotes your company and makes social media worth your time. Read more

Medical Blogs Can Help Promote Practices, Health Businesses

Medical blogs are emerging as the public face of health care, but bloggers should be aware that patient confidentiality rules still apply, according to authors of the first US study to look at medical blogs and patient privacy.

With more doctors and nurses becoming medical bloggers, researchers have identified a need for universities and professional organisations to provide instruction and guidance on how to blog in a way that maintains professional and ethical standards.

In the new study, the research team headed by the University of Pennsylvania’s Dr Tara Lagu looked at the burgeoning area of medical blogs to see if patient privacy was being respected.

Previous research into medical blogs has tended to focus on the benefits of blogs providing health information. The new study, recently published in the Journal of Internal Medicine, examined medical blogs and looked at how often blog authors commented on patients, violated patient privacy or displayed a lack of professionalism by not revealing conflicts of interest.

The team defined weblogs, or blogs, as a journal-style website with entries posted over time. With an estimated 70 million blogs on different topics and a worldwide average of 120,000 new blogs created every day, identifying all blogs created by health professional was an impossible task. Read more

Celebrity Blog Can Make Big Bucks as Starmuscle Shows

Starmuscle.com has been highly criticized for its childish humor and unique twist on tabloid news in the entertainment world.

The amateur blog boasts that it is the Mad Magazine of celebrity blogs and takes jabs at other blogs like Perez Hilton and TMZ.

Star Muscle has just hit its two year anniversary and claims to get over 4,000,000 page views monthly.

The daily updated website has celebrity news, fights, arrests, and other Hollywood inside information. Although it doesn’t have the staff that other corporate companies keep, the small operation has been considered a success in the eyes of the owner.

From the President of Starmuscle.com, James Bostick, “I saw that pink-haired overweight freak on TV, Perez Hilton and said to myself….James you are starting YOUR OWN celebrity blog; with funny pictures, real predictions. You are going to create a fun community where people can hang out and talk gossip. So that is what we did….too bad 50,000 other people had the same idea. Oh well.”

You can visit Star Muscle at http://www.starmuscle.com