[Version corrected, see first comment below.]
You can learn a lot from watching others.
Business journalist Om Malik had the good fortune to watch others in Silicon Valley during the dot-com boom and bust. He helped found and edit Forbes.com, served as an editor at Red Herring, and wrote a book, Broadbandits, about telecom industry malfeasance. At one point, he even worked for a venture capital firm. Along the way, Om starting writing a blog (monthly traffic: about 500,000 unique visitors) and developed a reputation as a thoughtful and insightful reporter who could easily navigate the techie warrens of Silicon Valley.
And then, during one soul-searching month this spring, the writer who writes about start-ups decided to stake his reputation and his income on starting one himself.
Or to put it another way: Open mouth, insert money.
The money in this case was a little less than $1 million from True Venture Partners. They’re betting that Malik can take his significant connections and experience and roll it into a profitable micropublishing venture based at gigaom.com. Malik’s new business will be called GigaOmniMedia Inc.
Malik is the latest in a string of bloggers who are finding financial backing for their news-oriented sites. Another daily news blog, Paidcontent.org, recently received modest funding, as did Christoper Carey of Sharesleuth.com.
The blog has been a tool of savvy journalists for years now. But these investments represent a vote of confidence in the technology community — which has long presaged the end of traditional journalism — that blogs can be used to support standalone journalism businesses.
Malik’s new blog-based business will begin July 1, one day after his job as senior writer at Business 2.0 magazine ends (he’ll stay on as a contributing editor).
He’s already received his first dose of competitive pressure. The announcement about his new business, which he planned to announce in private to friends and family first, was scooped by — wait for it — another blog.
We caught up with Malik to talk about blogs, business and the state of journalism.
OJR: Your blog is one of the more widely read in Silicon Valley, if not on the entire Web. What’s going to change on gigaom.com?
Malik: Well, there will be more features coming over the next 6-8 weeks. Some will be by contributors. The best thing about any of these niche sites like mine is that they’re so closely tied to what I wrote and what I say, so I have to balance out what others contribute. There will be one reporter joining me full time. There will be more details in July.
OJR: You’ll also be deploying certain “web services” to help your readers use the site, is that right?
Malik: Yes, a bunch of widgets to go with the way the site works. I don’t want to tip my hand too soon, but they will be enhancements to the site mainly.
OJR: But you’ll be writing about the same types of news, right?
Malik: Yes. My belief is that broadband is a platform and that you have to assume that going forward. Y’know a lot of things are built on top of that platform. Online gaming, MMOGs, wireless broadband, a lot of things. So what I write, it won’t just be about pipes anymore. Think of it as what I do now, but on a more expanded basis. It’ll be more focused on critical analysis than anything. A lot of people write about the iTunes store, but nobody’s writing about what powers the store, or the connection Apple needs to make it work, or the servers that power it. Just being able to do this full time is great. The ideal is that a tech leader or an ultra tech leader finds value in it. I’m a little nervous because it’s biting off a big chunk.
But I just love to write, this is what I’m made for. You can’t really lie to yourself and say you’re going to do something else. And I really think this move is in line with that.
OJR: How will the site make money? Will you continue your relationship with Federated Media? Any plans to do private analysis for individual companies?
Malik: Revenues will come from advertisements and yes, I will continue my relationship with FM. I would be looking at a sponsorship model as well. There are plans for a premium newsletter which will be delivered either as a PDF download or as a premium part of the site.
OJR: So where does Gigaom.com fit in the publishing ecosystem now? Are you a blog? A magazine site?
Malik: It’s an adjunct to whatever’s out there. It doesn’t displace anything. It only adds to what’s out there. What you’re really seeing develop online is highly focused niches. Mine is a tiny component of a very large domain, which is technology. It’s like one-tenth of news.com or one-tenth of some trade publication. But it’s basically what I know best. I think that’s why you see sites like paidcontent.org succeed, or sites like techcrunch.com succeed. They stick to one domain.
[Reporter's note: Techcrunch was started one year ago by a venture capitalist who wanted to write about new Internet start-ups. The blog has since become one of the most popular blogs online, garnering millions of visitors and earning its writer, Michael Arrington, extensive ad revenue.]
OJR: So on the one hand you have niche sites, like yours, but on the other hand are the aggregators, like Digg.
Malik: Right. Digg is basically an aggregator of news. But when you look at it you see a lot of the info on Digg isn’t coming from traditional media, but niche media. Go take a look. Hundreds of stories are there from sites neither you nor I have heard of. You take one look at one tiny site that has one tiny audience and that’s what makes life interesting, right? And this phenomenon only gets bigger because you have places like Netscape and Reddit coming along. I get the feeling they’ll only be more aggregators around niches.
Malik: Yes, exactly. Both of them drive traffic in equal amounts. At least 10 percent of my traffic every month comes from Techmeme and Tailrank in equal amounts.
OJR: But there’s a tension here, no? The authors of the 2006 state of the media report said that news aggregators are a threat to publications’ bottom lines.
Malik: I don’t think that is true. Not at all. I think the aggregators drive traffic to newspapers. The BBC, and I’m sure a few other publications, recently added a digg link to their stories. This is only going to drive traffic to the newspapers’ web sites. I mean, you’ve seen the bump that can come when a story in linked on Digg.
And I mean, one of the reasons the whole blog thing took off, to be quite honest, is that it’s easier to find things. Have you noticed that? When you go to a newspaper there’s so many layers and categories you have to get through. If you could build a professional blog that reported well and honestly, and the content was easy to find, you’ve got a business. Maybe.
OJR: So in your experience, what kind of posts work? What gets you the traffic that will keep coming back?
Malik: I haven’t a clue. Like yesterday I had this one little piece about something that was sold — some little thing, I really didn’t think too much of it — and it got such a bump. It’s so hit and miss on the Web. You never know what’s going to work. But this isn’t any different from the rest of journalism is it.
OJR: Well right now there are a lot of students going through journalism school who are seeing professional and amateur bloggers alike starting their own businesses. Any advice to those students, or anyone thinking of blogging as a business?
Malik: They just have to try it out, they have to do it. Everybody should be having a blog because it’s a showcase. Not only for your writing, but for your analytical skills. And that’s what’s really important isn’t it. You don’t have to have a high-powered blog, but you can still get traffic.
OJR: Well, you report on Silicon Valley and venture capitalists, so I have to ask you: What’s your business’ exit strategy?
Malik: I want to run this profitably. But why should I even be thinking about an exit strategy yet? This is the life we all dream of as a journalist, isn’t it? To be your own boss. This is pretty awesome. Every day I wake up and think I’m working for myself. I’m pretty happy about that.