Michael Arrington says that $25 million was invested in blogs and blog networks in 2007. He doesn’t see it as a good sign.
I believe the money is being, for the most part, wasted.
If a VC hands you a check, their intention is not to hang around for 20 years while you build a nice lifestyle business for yourself. What they want to see is an exit, preferably a 10x or higher exit, within 3-4 years. But something tells me that few of these networks are going to be able to grow quite as easily as they think and reach those liquidity events. The talent is, increasingly, locked up. Even when new talent is discovered or trained, every niche has serious heavyweights already there with page views and advertising dollars to back them up for a long fight.
At some point it’s going to become painfully obvious that the only way to get to a massive valuation is for the top talent to band together in a company where they each have an equity stake and therefore a reason to work all night on that next great story. They’ll each have their own space to stretch their legs and let their personality run around a little. Someone needs to pony up a big round of financing around an existing blog, or perhaps a new entity, and then start rolling them up into a big fat CNET crushing $200 million/year in revenue business.
At some point the word blog may lose all relevance. Maybe it already has. For sure, Arrington’s not describing blogs above, he’s describing startup media businesses in the tech sector.