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Business 2.0 seems to confuse being successful and getting major ad dollars on a blog with becoming mainstream. Although we can see their 1.0 thinking, the gloriously lo-fi NSFW Fark turning mainstream? Not farking likely, fellas.
Boing Boing, a four-person operation that bills itself as a directory of wonderful things, is on track to gross an estimated $1 million in ad revenue this year. The digital-media news site PaidContent.org, headquartered in the second bedroom of a Santa Monica apartment, is set to post even more than that. And Fark.com, a site packed with sophomoric humor run by a lone guy in Lexington, Ky., is on pace to become a multimillion-dollar property. In short, some of the most popular blogs, long the bane of the mainstream media, are themselves becoming mainstream. - Business 2.0
Fark is incredibly cost-efficient: Almost all of its content is generated by its readers, and aside from [Fark Founder Drew] Curtis it has just two contract employees, both tech guys... The beautiful part is that virtually none of the content (pictures, videos, etc.) is hosted on Fark, which simply links to the goodies. This means that, despite its huge traffic, Fark doesn't incur the crushing bandwidth fees that eat into profit at sites like video trove YouTube... [Maxim's] Dennis approached Curtis because Fark's audience demographic matches Maxim's. Curtis won't disclose his current revenue but insists that he can soon log monthly ad sales of $600,000 to $800,000. Battelle expects Fark to become the first indie blog to earn a million dollars a year in profit. "Fark's going to get there," he says.
Fark and the others deserve their success and the ad dollars because they've entertained and informed for the other 29 days of the month that the magazines are trying to catch up.
Before you get your hopes up toooooo high that your blogging payday is right around the corner, Don Dodge, formerly of Alta Vista and Napster, says that the blogs that are making those million-dollar deals are literally one-in-a-million. His thinking is that there are 50 million blogs, and only the top 50 are the ones being courted by those with the deep pockets.
... remember there are 50 million blogs, so the top 5% is still 2,500,000 blogs that are getting most of the attention and advertising dollars. That is a lot of blogs to be in the top 5%. Even the top 1% of all bloggers includes 500,000 blogs. If your blog is one in a million, or one of the top 50 blogs in the world, the VCs will probably be happy to talk to you. Om Malik and Arianna Huffington are in the top .001% of all blogs and will do well on a cash flow basis. But, as Dr. Kedrosky says, I don't see this as a solid VC investment with 10X returns.
If Om Malik wants to pay me $1,000 a month to write for his network...great!! Sign me up. But even if Om signs up a 100 bloggers and pays them $1,000 a month, that is only $100K per month or $1.2M per year. What do you do with the rest of the $5M?