Blogonomics: Nick Denton, Value Investor

Is Nick Denton going shopping? It certainly seems that way: he tells Fishbowl NY that "there are a couple of struggling properties that we’re looking at".

How could Denton be looking to buy up new web properties even as he’s cutting back his own, both in terms of the number of blogs he owns and the number of staff on the ones he’s keeping? The answer is that the key ingredient needed to make a profitable blog is time.

Media buyers tend to be slow-moving beasts: you can show them all the pageviews you like, but if you’re trying to sell them on a single blog, it really needs to have permeated their consciousness. So it can take years for a blog to become profitable, and the best time to jump in can be not at inception but rather just before it reaches critical mass.

Right now, adspends are way down, and media buyers are cutting any remotely marginal spending — which often includes blogs. As a result, many of those blog properties are indeed struggling. But if and when the online ad market recovers, it will be the established brands to whom the media buyers will first return. A relatively small investment now, to keep a blog ticking over for the time being, might well pay large dividends in the future — especially since the acquisition costs for blogs might even now be lower than the money that has been invested in them to date.

It’s probably also the case that Denton’s ad-sales team can add quite a lot of value to certain properties at very low marginal cost to Gawker Media. If nothing else, they’re more likely to get their phone calls returned than someone representing a single, more obscure, blog.

Besides, Denton is an empire-builder by nature, and the best time to conquer new territories is when they’re weakened by external forces. There are probably blogs out there whose only options right now are to close down or to sell to Denton. Which might not be good for them, but is probably the sort of opportunity he’s been waiting years for .

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One Response to Blogonomics: Nick Denton, Value Investor

  1. fgdf says:

    The world’s top luxury,gorgeous,fun.

    for a woman,Exudes a fatal attraction


    all in there.

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