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Blogging networks cashing in?

I‘m wasn’t sure what to make of blogging network b5media taking in $2 million in venture capital money.

b5media is self described as “a blogging network by bloggers from around the world covering the subjects they are most passionate about.” Some of their principal players such as Jeremy Wright, Darren Rowse and Shel Israel are stand up guys who’ve made great contributions to the blogosphere.

Congratulations from all over the blogosphere poured in last week with word of the funding. But I’ve never viewed closing on VC money as something to treat as a win. VC money is the beginning of a lot hard work. What may have started out with organic growth with ad revenue now turns into a project to turn $2 million into $20 or $30 million. Not to say it cannot be done, but it will be a lot of work meeting the demands of competing interests. And not every blog network will be acquired by an AOL like Weblogs, Inc.

Are we at the dotcom hysteria of the late 90’s where get big fast and cash out is everyone’s goal? I hope note. This results in a lot of sites, services, and products that end up defunct.

My approach has been to grow my blog business organically through profits and when needed a line of credit from a bank. Now, I’ll admit this is coming from someone who brought in VC money in a previous business. It needed to be done to compete in the get big fast dotcom craze of the late ’90’s. But my original business model sure got altered in a hurry by people who, in my opinion, did not understand the business as well as I.

But some different factors are in play with b5Media that may make VC worthwhile. They have a lot of people in their blog network, all with probably different levels of ownership. Likely means expenses exceeding revenues in a situation where no one or two in the group are going to fund it on their own. Cash may be required to survive.

Plus I agree with Rick Segal, a principal in one of the participating VC’s in b5media, there’s an increasing demand for worthwhile information with an unknown end game as to the value of that information.

…blogging is not the end game. Online Bulletin Boards, Journals, Newgroups, etc, have all been around for years and there is nothing inherently new about people expressing opinions, telling stories, sharing recipes, etc. It is not, in my view, about the act of blogging.

What is different today are the habits of a generation coming right up my proverbial tailpipe. They share a passion for information, the sharing of information, and most importantly the critical examination of information as a community. We’ve seen famous people busted for saying/doing dumb things, amazing ideas get accepted lighting fast, and unknown issues become major mainstream causes virtually overnight.

In addition, I agree with Rick that there’s something to Doc Searl’s vision/theory of the intention economy. We now have an attention economy where sellers via ads try to get your attention. An intention economy is one where we have informed buyers via blogs and online social conversations with buyers letting sellers know what they want.

For $2 million, a relatively small investment, to harness the fire of Jeremy Wright, the PR vision of Shel Israel, the blogging execution skills of Darren Rowse, and the passion of the niche bloggers in the network, VC makes sense. It will be interesting to see how things play out.

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