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October 06, 2005
Blogging's AOL Moment
The dot-boom ended when AOL bought Time-Warner. (People forget that AOL shareholders got 60% of the combined company's shares.) Will the blogging boom also end with an AOL purchase?
I ask because friends of mine in the business are thrilled over AOL's purchase of Jason Calacanis' Weblogsinc for a price reported to be $25 million. (Russell Buckley thinks AOL overpaid.)
Calacanis' company is probably the biggest in this space, but $25 million is less than the cost of a single good magazine title.
The bloggers are happy because they assume this means they now all have high-paying jobs with AOL. I don't know if that's true or not.(Jobs, yes. Highly paid? I don't know.) I'm wondering, however, just how big a business phenomenom rolling-up the news end of blogging can be, if the top group in the field is worth only that.
While AOL is said to be giving Calacanis autonomy, plus a five year contract, the question occurs how much autonomy will he get, and what kind of budget? After Blogger was bought by Google similar promises were made, but Blogger has yet to fulfill its technical or financial potential, and Six Apart (which remains independent) still hosts more blogs than any other platform. (This blog is run on a Movable Type 3.2 system.)
I've criticized Calacanis in the past (and he's criticized me for it) but if this business is so good why is it worth so little?
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