When John Battelle latches (leeches?) onto an industry, history says that industry is just about to have a painful collapse.
That's what happened when the Industry Standard magazine made its name. The rise of that glorified trade publication was directly tied to the fall
of the first Internet bubble. Battelle slithered away, leaving countless wrecked lives and a stain on the technology world for years to come.
And then he crawled out of his bunker, sniffed the air, smelled that peculiar odor of a balloon about to pop, and launched a sketchy business based on the big fad of 2002 ... web logs.
Can you guess what the bubble is this week?Monday's New York Times
had a curious article about a pioneering (and successful) blog company suddenly downsizing, due to a decline in advertising and increased costs. Gawker Media is shutting down some of its failed sites and also fired several top editors. A consumer-magazine editor was brought in to make the content more mainstream.
Gawker Media is owned by the same English technology journalist
who once ran another bubble business, the Silicon Valley networking party called "First Tuesday." Credited with turning blogs into a viable business, now he seems to be retreating. Why?
First, advertising is a fickle thing. Particularly the entertainment advertising upon which so many websites depend. A change in the advertising industry's conventional wisdom, cutbacks by the studios: it wouldn't take much to prick the current exuberance. Better to sober up now, before the end of the party.
Even though readership is up, it sounds like ad money is down. Everybody knows July is a dead time of year for ad sales, but this complicated decision was presumably made well before it showed up in the New York Times.
Hype popped the last bubble. Every prospectus was filled with big numbers, and venture capitalists quit verifying those numbers. That's what Battelle was counting on this time around.
For example, go to the Federated Media website
and Battelle's star blog is right there, boasting "more than 2 million unique visitors" per month.
Yet Nielsen/Net Ratings (the only Internet-readership company trusted by big advertisers) reported only 605,000 unique visitors to Boing Boing
in July 2005. Yes, that was a year ago, but Nielsen/Net Ratings pegs Boing Boing with 20 percent annual traffic growth.
And that would put Battelle's flagship site at 726,000 unique visitors a month ... far less than half
of the 2 million claimed by Federated Media.
That kind of Enron accounting should serve as a giant red flag over not only the latest Battelle scheme, but the whole irrational exuberance
of the blog bubble.