Saturday, November 8, 2008

Blogging As a Business Just Got Tougher

I have many friends who tell me that blogging is a great way to earn some extra money.All you need to do is set up a blog, throw up some ads and you will make a few thousand dollars a month.

If it was only that easy. Not only do you need to provide content that is of interest to a reader but the whole online ad business is slowing down.

I came across a great post over at New Rules of, the writer speaks about how the monetization of ads is becoming tougher. The article says, " monetization of ads getting tougher as ad model struggle: This issue is facing every firm reliant on ads for revenues.’s CFO Eric Ashman said, “it is safe to say that we have very little visibility into online ad spend for the rest of the year or for 2009.” While online has held up better than offline, I think this is an important issue. I’ve said before that firms like SeekingAlpha have created new content models but not revenue models. Constrained by pageview growth and CPMs, these firms are no different from the predecessors in terms of generating advertising revenues."

The fact is that for a very small blog or online content business, on line ads can still be a nice little source of income. the real problem becomes how to scale. The aforementioned article mentions Seeking Alpha. Here you have a great example of the problem. Once the decision to become a large firm is taken, and large amount of expenses need to be taken in order to scale, the question becomes how to scale revenues?

I don't have an answer but maybe it pays to stay small in size, and avoid the problems of trying to scale the business. just a thought.

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