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A lot has been said regarding “global new media network” b5media taking on $2 million in funding, but for me the most level-headed opinions always come from those totally disconnected with the investment or the company.

Nick Douglas wrote a scathing entry saying that b5media doesn’t deserve any money. Normally a dissenting view isn’t such a bad thing, but when it’s written on one of the most widely-read blogs in the tech industry, that’s tough to see. A quote from Nick analyzing their investor’s reasoning:

“With information overload comes opportunities on a number of fronts. The most obvious is authority.” Which b5media doesn’t have. Why not invest in someone who’s already established some of that?”

Varun Mathur comments and asks some pointed questions about how b5media will get content into the hands of readers:

“Also, the rest of the “blogosphere” is an informal, disorganized “blogging network”, where a blog is being created every second. That is what b5media is up against. As a user, I am interested in specific post(s), and I don’t care which blog or blogging network the post belongs to. Now, what’s the most optimal way for me to find that specific post: going to b5media’s blogging network -> finding a blog -> finding the post OR using various search tools like google, technorati, icerocket to find exactly what I am looking for?”

Varun brings up a good point (one that their investor dodges) and that’s the problem of wrapping a Web 1.0 publishing model around blog content. Users now expect to find and consume their content in a variety of ways and aren’t happy when they’re forced to change. b5media currently hasn’t a way to view all posts from a specific channel category, no way to subscribe to multiple blogs in one feed, and no dashboard for the latest content across the network. Varun is like many people who want control over how they consume content, and that’s something b5media definitely has to work on. The guys at b5media are absolutely a smart bunch, so I’m sure that they’re hard at work on some new content dashboard/portal technology as I speak.

Phil Sim questions if blog networks are worth the money, and my answer for this will always be “it depends on what you’re trying to create.” Don Dodge was miffed after Om Malik took a few hundred thousand to build out his new media empire and I think it was definitely a smart move. The key to pay-for-your-writing blog networks is to build up brand recognition where the author and blog popularity eclipses that of the network — Darren Rowse’s ProBlogger.net has a gigantic following and if I were in b5’s shoes I’d build out services that leverage the ProBlogger audience and capture a larger segment of that industry. Weblogs, Inc. was purchased (essentially) for Engadget and Autoblog even though WIN has dozens of other blogs besides those but AOL wanted to individual brands since they are the most valuable. b5media could take their funding and build out some of their more popular blogs into their own verticals, similar to what Om is doing with his GigaOm Network.

Phil continues:

“You hear increasngly around the traps of blog and podcast networks who are locking their talent into really, tough contracts – ‘we own you mofo’ – and with these kind of economics vs risk you can see why.”

The Catch-22 of pay-for-your-writing blog networks is that the network is paying the author money to build up a site and their own recognition, and after they have a nice following it might make financial sense for them to pursue their own publishing efforts, whether that’s writing their own blog or anything else. Back two years ago Peter Rojas used to write for Gizmodo but left to write for its competing site, Engadget, and his audience came with him to make Engadget the largest tech/gadget weblog on the planet. Personal branding and recognition go a long way, so the key is to give authors a big enough paycheck reason to stay once they taste the fruit from the self-publishing tree.

Say some of b5media’s blogs get really large and have a nice following — what’s stopping Jason Calacanis from offering a salary 3x as large if they come work for AOL/Weblogs, Inc.? If any of their writers are motivated more by money than by passion, it could be a real problem for b5 or for any other blog network.

And for the conspiracy theorists out there, here’s a quote from Jeremy Wright circa this past Spring:

“We won’t accept funding that: 1) significantly takes away from doing “the work” [or] 2) requires us to have an exit strategy”

Could the investment of $2 million not have been an equity deal, but convertible debt? It’s pretty much a standard deal that venture capital firms only make money from an exit strategy (acquisition or IPO) so with Jeremy being against the idea of an exit strategy maybe the deal wasn’t VC ownership after all?

Regardless of the positive or negative comments, it takes effort for any company to raise a round of funding and for that b5media should be commended. On the other hand, this now puts a lot of pressure onto the backs of the founders and authors to make their investment back, so in the upcoming months we’ll see the path they take.