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Dana Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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Moore’s Law defines the history of technology. It held that the number of circuits etched on a given piece of silicon could double every 18 months as far as its author, Intel co-founder Gordon Moore, could see. Moore’s Law has spawned constant revolutions since then, not just in computing but in communications, in science, in a host of areas. Moore’s Law applies to radios, and to optical fiber, but there are some areas where it doesn’t apply. In this blog we’ll take a daily look at new implications of Moore’s Law in real time, as it rolls forward to create our future.
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October 06, 2005

Blogging's AOL Moment

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Posted by Dana Blankenhorn

jason calacanis.jpgThe 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?

Comments (4) + TrackBacks (0) | Category: Business Models | Business Strategy | Investment | Journalism | blogging | e-commerce | online advertising


COMMENTS

1. John on October 6, 2005 01:07 PM writes...

I will agree that buiyng blogs is marginal
they will dissappear soon, no value is created
they should chase the guys like Quintura at http://www.quintura.com who will really make them independent on search engines and provide a next generation search technology based on context of the query

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2. Thuktun on October 6, 2005 01:26 PM writes...

I wonder if some parallels might be drawn to VA Software, formerly purveyors of a Linux distribution and hardware, buying OSTG née OSDN, owners of Slashdot and other community-driven news sites.

(I ask "I wonder" because I really don't know enough about all these aquisitions and their successes or failures.)

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3. pwb on October 6, 2005 01:47 PM writes...

if this business is so good why is it worth so little?

As I presume you know, the answer is obvious.

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4. Mr. Snitch! on October 9, 2005 04:14 AM writes...

$30 mil or so for a two-year-old company composed mainly of a bunch of writers? I'd bet 99% of businesses would kill for that payoff in that time period.

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