Paying Bloggers as a Business Model

Photo by BRUCE CHAMBERS, THE ORANGE COUNTY REGISTER

This article appeared in the Orange County Register and was a very nice promotion of Know More Media.

Monday, November 13, 2006

Paying bloggers as a business model

Brea company shares ad revenue with bloggers who are part of their network.
By JAN NORMAN
The Orange County Register

As the number of Web sites soared into the hundreds of millions, companies like Yahoo and Google were started to help Internet users find the content they wanted.

Now, as the number of Web logs, more popularly known as blogs, has moved past the hundred million mark, blog networks are springing up to organize the chaos of these informal, frequently updated journals.

The vast majority of blogs are still the random musings of individuals. Think of a teenage girl's diary.

But increasingly, blogs are dispensing news, technical know-how, topical insights and gossip. And that's what companies like Know More Media, a Brea blog network, hope to corral into profitable business models.

Hal Halladay and Tim Stay started Know More Media in 2005 as an online publisher of business blogs written by experts in their field. They pay their bloggers a few dollars per posting and share ad revenue.

In 10 months, the network at http://www.knowmoremedia.com/ has had more than 2 million visitors; October traffic alone exceeded 500,000, up 45 percent from September.

Know More Media already ranks seventh among blog networks for number of blogs and 22nd overall based on such factors as pages indexed on Yahoo and Google.

Halladay and Stay have been monetizing the Internet since the '90s. They started Freeservers.com to build and host Web sites and sold the company to About.com for $40 million in 1999.

They didn't intend to retire, just move on to the next venture. But the aftermath of the dot-com bust wasn't pretty for people trying to make money with Internet businesses. The pair wrote a business plan for a social networking site for sharing photos and music long before MySpace.com came along but couldn't attract investors.

"It was the wrong timing," Halladay said. "The tools weren't there."

Networks are another effort to organize blogs. Others are collators such as Technorati.com, directories including Blogtopsites.com and communities including Blogcritics.com, according to Australian blogger Darren Rowse, founder of another blog network, b5media. "New movements often start as fairly chaotic and disconnected entities but generally over time will self-organize and form clusters."

BlogNetworkList.com, a Web site that compiles a comprehensive directory of blog networks, noted that each is experimenting with different models. Some are large networks with their own content, others concentrate on driving a lot of Web traffic to a few sites through extensive use of hyperlinks, and still others try to form loyal communities.

Know More Media "looks for practitioners who know their stuff. … We create the tools for them to write their blogs, and we host their blogs," Halladay said. "They aren't journalists, and we don't edit what they write. You're going to find typos and writing that won't get an 'A' in a journalism course."

Diane Ensey in Washington writes two blogs for the network, http://www.alistreview.com/ about the Internet's most popular blogs, and http://www.dorealtime.com/ about Web-based collaboration.

"I had a personal blog and thought it would be nice to get paid," Ensey said. The value of a network "is a one-stop (site) for readers and support for the writers. We have 50 or 60 blogs advertising each other."

She estimates that she spends two to three hours a day writing the blog for which her pay totals about $500 to $1,000 a month.

"The payments are insignificant compared to the authority and business opportunities I have gotten," she said. "My technology business has increased a third since I started blogging."

Although Know More Media's more than 50 bloggers write in English, some live in the Philippines, Malaysia and India. Their topics include customer service and leadership, all with a business focus.

The company is seeking 30 more bloggers immediately, and Halladay envisions the network growing to several hundred authors who will build communities of people interested in narrow business topics.

"We might have someone who runs a dry cleaner writing about and for people who understand the industry," he said. "We could have thin slices (such as) restaurants, accounting and, separately, tax issues."

Know More Media charges advertisers $8 to $12 per 1,000 impressions. Halladay and Stay know from some of their other Internet ventures that certain hot topics can draw $45 to $50 per 1,000 impressions.

"Business (blog) advertising rates can be substantially higher than for nonbusiness sites because advertisers want to reach the audience for this information," Halladay explained, adding that his network's traffic is approaching the level that is attracting interest from large companies with multi-million-dollar Internet ad budgets.

"Our goal is to establish legitimate news and information destinations where business people want to come, learn and engage in conversations about business," he explained.

If Know More Media proves its concept – it's approaching profitability although the company won't give specific financial data – it could develop separate blog networks for other broad categories.