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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.

About four years ago, Darren Rowse of ProBlogger.net started his first blog and was hooked. Since then he’s started at least 16 more blogs on various topics that can all be monetized, and he’s now one of the most famous “professional bloggers” in the blog world. Darren’s a friend of mine, and I always head to his site to learn quick-hit tips on AdSense placement and lots of other topics. Now, this exposition is probably unnecessary as many people know who Darren is, but as one of the first people to actually produce blogs as full-time revenue producing outlets, it’s good to keep in mind what his roots are.

Professional blogging means different things to different people, but the common thread is that you are essentially producing your blog with the intent of making money as either the sole purpose, or one of the top purposes. I’m no authoritative voice on pro blogging since I don’t write here for that purpose, but here are the various ways people can earn money in the blog world:

• Start a blog, make it big — Sites like Dooce weren’t started with an ulterior profit motive, they were created because the author wanted to voice their opinions on various topics. Over time (and thanks to various mainstream media mentions) her blog became so oft-visited that she threw ads up there and now writes full-time thanks to sponsors.
• Start a blog, make it semi-big, start more just like it — It’s difficult to produce a blog that gets a ton of visitors, but it’s less difficult to produce a blog that gets a fair amount of visitors. If you produce a blog that makes say $500-$1,000 per month from all advertising (AdSense, Text Link Ads, affiliate, etc.) then it’s normal to think, “why not have a few of those?” You then start up a few more blogs, write with the same amount of gusto as the first one, and now you’re making a few thousand a month from 3-4 blogs. This is sometimes a precursor to an individual creating their own “blog network” in an effort to span traffic across their blogs.
• Start a blog, get some traffic, slap some ads on it, start a dozen more — Another version I see is the blog that’s a fine line between a splog and just a link-heavy weblog. Typically these are news-based (instead of opinion-based) with either a longish quote from another site and a link-out, or a quick paragraph summary and then a link-out. Rarely do you see long opinion pieces on these types of sites, mostly the content there is produced in an effort to publish frequently and get relevant AdSense ad blocks up.

This isn’t an exhaustive list but it does show some of the more common ways people make money from their blog. The common threads in my opinion are the drive to constantly produce content and the goal of making money. If you replace “produce content” and swap in “innovate” I think that’s basically any entrepreneur’s mentality. Professional blogging and starting a company seem to be pretty similar — find something you believe in and put your head down until you’re successful.

The Fallacy?
Besides money, the other common thread is that bloggers trying to earn a living from their blogs have full ownership of their sites. I have no experience writing for other blogs if I don’t own them, but that’s a growing trend now with some blog networks. The majority of blog networks pay writers to post entries on network-owned blogs, and although they do pay out percentages (or flat rates with the larger networks) I think the writer is still making less than they could on their own. Starting your own blog and building an audience is difficult, but you get to decide on the layout, design, branding, URL, topics, ad placements, etc., but if you write for someone else’s blog you definitely don’t keep all the money, and you probably don’t have a lot of say over what ads to run, where they’re placed, the name of your blog, the design, etc.

For example, Medium Dreams is a blog owned by b5media.com with a three-column layout that’s used on nearly all their blogs. A horizontal AdSense link bar is on the very top of the page, followed by a header graphic, and then the three columns have a large square AdSense block atop the right two. The layout is pretty standardized, and I imagine if the author said they wanted to produce a hot layout like Shaun Inman, Jason Santa Maria, or Veerle (with different columns, colors, typography, ad placements, etc.) I’d imagine the answer would be no.

Making Lots of Money
I know a lot of people who make 4 figures or more from their blog per month, and they all own their blog. I’ve heard that blog networks (other than Weblogs, Inc and Gawker) really can’t outlay the thousands per month it takes for somebody to be a full-time blogger, so they pay a lower flat rate or a percentage. Now here comes my theory which could be totally wrong, but here goes:

People that are paid writers for a blog they don’t own (and aren’t paid nearly full-time wages) are less passionate for the blog medium.

People who love blogs as a medium have had them for awhile, have been tinkering with their blog, adjusting the layout, messing with the design, and are writing constantly.

People who are paid to blog for others seem to only do it for the quick money. They don’t want to be bothered with the responsibility of hosting (a few bucks a month) or monetizing (copy and paste ad code) or tweaking (isn’t layout tweaking supposed to be fun?) so they leave that up to someone else. They write not because they love the topic (because if they did, wouldn’t they have already started their own blog?) but because they could make $50, $100, maybe a few hundred dollars per month. It seems to me that if someone was truly passionate about their topic they’d be actively working on their own site on that topic, posting furiously, trying to build something of value.

To me, starting your own blog and working it up is like being an entrepreneur with an innovative business idea, whereas writing for someone else’s blog is like buying a Taco Bell franchise — no real innovation, no creativity.

So all that being said, I have a challenge to the professional bloggers out there who blog for networks and don’t own their sites: are you making a living from this? I’m not talking a few hundred or a thousand a month, do you make enough from your unowned sites that you can pay rent/mortgage, utilities, car payments, etc. etc.? I’ve yet to find someone who makes that much off of sites they don’t own, so if you’re that person I want to hear from you.