Gizmodo and blogging-for-profit

Gizmodo and blogging-for-profit

[1,122 words] 

Somewhere in the fascinating world of weblogs, a flaming conversation has begun: is blogging-for-profit viable and where does its potential lie? A new weblog about tech gadgets called Gizmodo appeared on the blog-for-profit horizon in August 2002 and its founder, Nick Denton claims that revenue will flow in from affiliate referrals to Amazon's electronics store in much the same way that Andrew Sullivan is making money from affiliate referrals to Amazon’s virtual bookstore[1].

At his personal weblog, Nick Denton explains the rationale behind this new venture:

I have no idea how much Gizmodo can bring in revenues. All I know is that weblogs are a compelling form, gadget addicts are all online, and Amazon.com's API makes it easy to connect product with content. Most importantly, this is a low-risk commercial experiment. Most media companies suffer from overblown editorial, an ad sales force with padded expense accounts, and overly complex publishing systems with a team of primadonna sysadmins to maintain it. By contrast, Gizmodo will be a couple of hours a day of Pete's link- picking skills, some automatically generated Amazon.com links, and $150-worth of Movable Type. Media has never before been this lean (http://www.nickdenton.org/archives/2002_08.html).

It’ not surprising to see why statements and ventures such as the above trigger a plethora of reactions by bloggers and non-bloggers alike. At the first place, it sparks the good old discussion about blogging for money. This discussion usually revolves around two main tenets: first, some believe that only professional bloggers are well suited to do the job (and be paid for doing it) and thus, companies willing to pursue a ‘blog strategy’ should put one professional blogger into their payroll and assign him to cover all aspects relevant to their business as a full-time job. This is the professional blogger business model that Meg Hourihan (2002) suggests.

Others rely their hopes on donations by readers and advertising revenue. However, for such a model to be sustainable, numbers and eyeballs matter more than anything else and there are not many Andrew Sullivans out there purportedly making $6,000 per month through donations. Even Andrew Sullivan (2002) claims that there is no one-size-fits-all business model, if there is any, and that he blogs for reasons other than making money. He recognises the potential pay-off in terms of promoting one’s work to an audience quite bigger than otherwise within one’s offline reach and that one’s career prospects may be enhanced but nonetheless no one has yet offered him any money to blog. This is the case for indirect methods of revenue into which the affiliate model that Gizmodo relies upon has also come to be included.

Clay Skirky (2002) has put forward a lucid explanation as to why blogging-for-money is not tangible: 

A lot of people in the weblog world are asking "How can we make money doing this?" The answer is that most of us can't. Weblogs are not a new kind of publishing that requires a new system of financial reward. Instead, weblogs mark a radical break. They are such an efficient tool for distributing the written word that they make publishing a financially worthless activity. It's intuitively appealing to believe that by making the connection between writer and reader more direct, weblogs will improve the environment for direct payments as well, but the opposite is true. By removing the barriers to publishing, weblogs ensure that the few people who earn anything from their weblogs will make their money indirectly.

Shirky agrees with Sullivan that only indirect methods for revenue are feasible and that blogging “is mass amateurization, and it points to a world where participating in the conversation is its own reward”. Even so, Gizmodo’s affiliate model is such an indirect business model and thus, is subject to several factors that will ultimately decide upon its fate. 

Not to forget, Gizmodo has near zero costs. As a blogger reminded us of: “sure it's got a chance to be profitable. Eventually, with affiliate revenue, (maybe) some ad or sponsorship revenue and near zero costs, it will probably eke out a profit someday. Nothing wrong with profit....”.

Dave Winner responded that the odds of making a profit are slim since hordes of people interested in tech gadgets will exhibit more or less the same behaviour: they will blog and most importantly, they will blog for free. So he’d rather ‘google’ when he’s on the lookout for a new gadget rather than go directly to Gizmodo. Of course, if Gizmodo’s reviews showed up on Google, then he might pop to Gizmodo’s blog. In a follow-up to the same discussion, he pointed out that the CEOs of gadget companies will be blogging in the years to come and that’s the most direct business model for weblogs. Anything else is doomed to fail simply because of all those bloggers out there blogging for free, blogging for the mere fun of doing so.

From there on, the discussion snowballed into myriads of other directions. A blogger called Jenny Berger voiced the opinion that “Asking why blogging should be profitable is about as productive as asking why shouldn't it be profitable. Have we not yet figured out that on the Web, there is no "should," only "can?”

Another blogger, Rick Bruner, correctly pointed out that its’ very hard if not actually impossible for this Gizmodo-like model to be economically sustainable unless you have massive traffic.

Although all previous comments have their own merit, the most constructive comment was concerned with the power of engaging the market in a real conversation and that commercial value stems from a real voice unhindered from bureaucratic constraints and standardised corporate PR formats:

It [Gizmodo] looks like a great source of information, and it serves that purpose well. But most of the popular weblogs I read have other aspects that make them more compelling. Things like the personality of the editor(s) behind the weblog. Gizmodo, in its current state is pretty "dry." There's no personality or character there at all, just info. Weblogs should have opinions. Weblogs should have character. Tie it all up together with good information, and you've got a site people will come back to again and again.

So, it’s a matter of whether you speak with a real voice or not. Expanding on the previous comment, another blogger commented that “if enough readers make a "connection" with Gizmodo, if they hear something unique in the voice of the site editors, if they learn to trust the instincts of writers, they'll keep coming back”. That’s the point. Even Dave Winner who had previously positioned himself as a non-believer agreed that if weblogs have a true voice, they also have a chance of succeeding.