Sorry Jason and Nick, There's No Money in Blogs

In his annual end-of-year “State of the Contentsphere” column in e-Content magazine Steve Smith posits that there will be no money in 2005 for pure-play blog companies like Weblogs Inc. or Gawker Media. Rather, he says, the real value blogs hold is for established media companies who use them to retain their existing audiences. Here’s the key part of Steve’s column (note the stats)…

Blog Bucks: The wild and wooly blogosphere itself will not make money for many, including blog networks like Gawker Media and Weblogs Inc. Nevertheless, blogs are already proving to be powerful audience retention devices for known media brands. Some B2B sites report that up to 10% of daily traffic now goes to columnist blogs. 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. Accept it and get sponsors for it.

Steve, I love your writing, but you’re just plain wrong here at least as far as the pure plays go. Pure play blog companies like Jason Calacanis’ Weblogs Inc. and Nick Denton’s Gawker Media are already attracting sponsors like Audi and are making money. Are they making a king’s ransom? No. But I bet in 2005 they will turn a profit if they haven’t already. You’re forgetting that they carry far lower overhead than what the big boys need to manage. More importantly, their blogs are equally if not more influential than the mainstream media. Just look at Wonkette’s power this year.