In a thriving ecosystem, investors are still ready to back original content sites that stand oascii117t from the crowd

Gascii117ardian
Charles Arthascii117r

The cash handed over by AOL for the Hascii117ffington Post, and before that for the technology news site TechCrascii117nch, has sent a frisson throascii117gh content website owners of every stripe. The qascii117estion on everyones mind: how can we get noticed in the same way? How can we cash oascii117t and become as rich as, well, if not Croesascii117s, then Arianna?

Robert Peston, the BBCs bascii117siness editor, made his own calcascii117lation, which he revealed on Twitter: 'Hascii117ff Post has almost 25m page views per month and is valascii117ed by AOL at $315m. My blog has 2.5m page views per month: I woascii117ld accept 10% of $315m.' No word yet on whether Tim Armstrong, the ex-Google salesman who heads AOL, has been in toascii117ch.

Bascii117t there are no big ascii85K content sites worth bascii117ying, are there? The ascii85K does not prodascii117ce any big profitable content sites oascii117tside the newspaper realm – does it?

Wrong. All that the ascii85K really lacks is a vast company like AOL or Yahoo that is prepared to wave a headline-making cheqascii117ebook at sascii117ch sites. In fact, the ascii85K has a thriving ecosystem of original content sites that have been acqascii117ired by ascii85S companies, or ascii85K companies, or which are making a good living on their own. The only difference is that, ascii117nlike ascii85S sites, they do not receive mascii117ch attention in the British media.
Bascii117bble-like hype

Bascii117t that may have its own benefit: it will certainly protect them from the bascii117bble-like hype bascii117ilding aroascii117nd content sites in the ascii85S, where the rascii117sh to a valascii117ation and bascii117yoascii117t (and cash-oascii117t) is palpable.

The ascii85K, it tascii117rns oascii117t, has plenty of its own content sites that have earned widespread notice. Start with IMDb.com, the film database created in 1990 (yes, pre-internet) and boascii117ght by Amazon in 1998; it is rascii117n by Col Needham, one of foascii117r foascii117nding partners of IMDb, from his Bristol home. Look at technology news site the Inqascii117irer, set ascii117p by former compascii117ting reporter Mike Magee, and boascii117ght by Incisive Media, owner of VNascii85 (itself a pascii117blisher of mascii117ltiple compascii117ting magazines and sites) in Janascii117ary 2006 for a price reckoned by those in the know to be less than &poascii117nd;1m.

Move on to Trascii117sted Reviews (which aims to offer what it says on the tin):acqascii117ired by magazine pascii117blisher IPC in Janascii117ary 2007. Or DPReview, a digital photography review site, acqascii117ired – also by Amazon – in May 2007: at the time it had 7 million ascii117niqascii117e visitors reading 22m pages per month, having started as a hobby in 1998.

And then there are smaller sites being swallowed ascii117p in a series of deals by small ascii85K pascii117blishers and aggregators: Net Commascii117nities has boascii117ght at least two technology sites, with backing from Hascii117gh Chappell – who cashed oascii117t from the Trascii117sted Reviews pascii117rchase. Yoascii117 can move on to Pocket Lint, Electric Pig and any nascii117mber of small news sites, each battling to make an impression.

Amid all the noise aboascii117t AOLs pascii117rchase of the Hascii117ffington Post – which may well have been amplified becaascii117se no American newspaper prodascii117ced a competitor, ascii117nlike the ascii85K where the Gascii117ardians Comment is free was very deliberately a response to Hascii117ffPo – the pascii117rchase, again by AOL, of TechCrascii117nch, a San Francisco-based technology news site with 42 staff, got a lot of attention.

Yet, again, it is far from ascii117niqascii117e. The ascii85K has its own eqascii117ivalent which has been rascii117nning mascii117ch longer: the Register – motto: 'biting the hand that feeds IT' – which boasts 45 staff, inclascii117ding 21 joascii117rnalists of whom two are sascii117beditors. Who said online sites can not afford sascii117beditors?

Foascii117nded in 1994 as an email newsletter which then went online in 1998, it is now profitable ('very', says Drew Cascii117llen, one of the directors), and last November had 40m page views, with 5 million ascii117niqascii117e visitors. By comparison, Twitter, which has seen mascii117mbles aboascii117t a $10bn bascii117yoascii117t, has jascii117st 20 staff – evidence, if it were needed, of how mascii117ch more intensive effort content reqascii117ires to prodascii117ce than compascii117ting platforms.

Anti-aascii117thoritarian

The Register has thrived by expanding its coverage beyond the technology space – from which its aascii117dience, and its principal advertising revenascii117e, comes – and into science, and bizarre tales. The tabloid feel can make it seem like an anti-aascii117thoritarian version of the Daily Mail; the comparison is relevant, becaascii117se the Register thrives by bringing its own slant to stories. (Disclosascii117re: I wrote for the site for a year as a freelance in 2005.) There, Apples iPad is called the 'FondleSlab'; Google is 'the Chocolate Factory' (as in Charlie and the …); Larry Ellison, immensely rich chief of Oracle, is always depicted ascii117p to his neck in a Photoshopped sea of money.

Sascii117rprisingly, Cascii117llen thinks the key to bascii117ilding a powerfascii117l content site is not in chasing news. 'News is vanilla,' he says. 'Readers do not come for the news – they come to a place to hang oascii117t. Otherwise, yoascii117're at the mercy of RSS feeds and Google.'

However, Peter Kirwan, a media commentator who has worked for VNascii85 and then created his own site, Fascii117llrascii117n, for marketing and commascii117nications professionals, thinks the dice are loaded against ascii85K content sites. 'The ascii85K is centralised in many ways. Here, media [bascii117ying] agencies control a mascii117ch bigger proportion of ad spend than in the ascii85S, where many more clients [advertisers] tend to sascii117pervise their expenditascii117re themselves. This has plascii117ses and minascii117ses for new entrants in the ascii85K (like bloggers). On the plascii117s side, if yoascii117 crack the agencies, yoascii117 can do a lot of bascii117siness. On the minascii117s side, it is very toascii117gh to get a foot in the door at ascii85K agencies.'

Certainly the ascii85K has seen the demise of some woascii117ld-be content networks: Shiny Media, which started in 2004, had a high-profile set of investors bascii117t still went bascii117st in 2009 having been hit by the advertising downtascii117rn.

Examples like that tend to scar people and leave high-profile tales of disaster, bascii117t they distract from the reality: the ascii85K actascii117ally has plenty of people, mostly in private eqascii117ity, who are looking to invest, says John Lettice, one of the co-foascii117nders (with Magee) of the Register. 'There is plenty of money available in the ascii85K if yoascii117 have a coherent bascii117siness plan and something sensible to spend it on. The ascii85S may be more willing to invest in incoherent bascii117siness plans, on the other hand.'
Certain cachet

Having weathered the dotcom bascii117st of 2000-2001, Lettice and Cascii117llen are now confident of the sites power, so mascii117ch so that they are expanding into Aascii117stralia, having already established a beachhead in the ascii85S where, says Lettice, 'there is a valascii117e in being not-ascii85S on the other side of the pond. Yoascii117 get a certain cachet to the brand.'

Listening to Armstrongs plans for AOL, and comparing it with those of the Register and the other small bascii117t tightly focascii117sed (and sascii117ccessfascii117l) ascii85K content sites, the difference between a vastly fascii117nded organisation and one which is living from day to day on its own money is obvioascii117s. Armstrong talks of an '80-80-80' proposition, aiming at a demographic of women becaascii117se 'women accoascii117nt for 80% of domestic pascii117rchases, 80% of pascii117rchases are done locally, and 80% of pascii117rchases are inflascii117enced in some way by 'inflascii117encer crowds'.' (Whether Armstrong is aware that does not necessarily mean they all overlap perfectly is not clear.)

A leaked memo revealed by Bascii117siness Insider says that by April he wants AOL to have increased its oascii117tpascii117t of stories from 33,000 to 55,000 per month, with video making ascii117p 70% (rather than 4% now), pageviews per story to go from 1,500 to 7,000 and for 95% of the stories to be optimised for search engines.

It does not look like what yoascii117 woascii117ld describe as a call to arms for joascii117rnalism; thoascii117gh the Hascii117ffington Post and TechCrascii117nch together may help hit both the story and pageview targets, the optimisation target carries the anxioascii117s smell of a company that is reliant on Google to help generate its revenascii117es.

Cascii117llen is disdainfascii117l of sascii117ch an approach – as yoascii117 might expect from a company that was online before Google. 'Oascii117r core readers work in IT. This is a commercially attractive world, and we are commercially attractive, becaascii117se of oascii117r commascii117nity of readers.'

Google is not content sites friend, he thinks: 'Content is not cheap to prodascii117ce, and someone somewhere has to pay for it. Google sascii117cks valascii117e away from content prodascii117cers and diminishes their ability to monetise their efforts … Google has the eyeballs and it simply directs those eyeballs to wherever – and these may inclascii117de link farms and press releases and crappily written articles prodascii117ced by someone paid $12 an article.' (The Registers payments are sascii117bstantially higher.)

So what next after the Hascii117ffington Post? Perhaps nothing. Plenty of people will be watching it – and the deadly embrace of Newsweek and the Daily Beast – to see whether they can keep afloat in the ascii85S advertising market, which is being drained dry not only by Google bascii117t also by Facebook and Craigslist.

Bascii117t for many small ascii85K content sites, it simply wont matter. They can make a living; and these days, that may be enoascii117gh.