Maroon Ventures Blog

Today the acquisition of Ars Technica by Condé Nast (publisher of Wired magazine - among others) hit the blogsphere. The acquisition was rumored to be in the $25 million range. Ars Technica is officially a technology blog but in reality a bit more. I would put it more into the tech blog/community world as it does contain quite a bit more than the usual tech blog. However, couple of points: 1) there is no corresponding print product, 2) there is no anccllary ecommerce play (e.g. cnet) and 3) there is no corresponding broadcast product. Ars Technica is just that - a destination technology site on the internet. Some key stats:

• Purchase Price $25,000,000
• Monthly Unique Visitors: 1,500,000
• Monthly Pageviews: 4,000,000

Okay, let’s have some fun. Let’s assume that this acquisition helps set the market price for the internet blog pure play. What it this acquisition telling us?

• Value of the Monthly Unique User: $16.65/unique
• Value of the Monthly Pageview: $6.25/pageview

Pretty interesting metrics there for any publisher working to build an online audience around a blog. Now, let’s take a look at it from an eCPM basis. Let’s assume that Ars Technica has zero negative or positive growth in traffic for the next 3 years. I know, bad assumption but based on the rise and fall of tech blogs - it might not be too far off. This acquisition tips the scales at an effective CPM of $173.61 per 1000 page views. That is to say, all things frozen traffic wise, you will need to average an eCPM of $173.61 over the next 36 months to break even - just from a revenue standpoint. 

NOTE: TechCrunch is reporting that the uniques are more on the order of 4.5 million rather than the 1.5 million that Comscore says. But its not as fun to use that number.

N.B. - I still don’t own an iPhone.

I’m deeply worried about the economic woes the newspaper industry is facing. I’m even more worried about what will become of journalism amid this turbulence. As news moves online and the economic model turns upside down, will the capital J survive?

In the April issue of Wired magazine, a profile of the all-out war between geek blogs Engadget and Gizmodo shows there might be hope. (I’d link to it but couldn’t find it anywhere on Wired’s website. Hmm. That might be another post. On the magazine industry’s online woes …).

The article details the cutthroat battle between the two blogs to win audience and nab the best and fastest gadget scoops. As I was reading it, I quickly recognized several of the heated newspaper battles I’ve been involved in. The Birmingham Post-Herald (now defunct) vs. the Birmingham News. The Albuquerque Tribune (now defunct) vs. the Albuquerque Journal. And the Rocky Mountain News vs. the Denver Post (now in a joint operating agreement). The adrenaline and competition in those battles bred some great journalism. There also was excess and questionable practices. But I think in the end, the readers won for having two or more competitors vying for their attention

The Wired article details the race to dominate gadget punditry in all its excess and glory. And it made me believe that maybe the capital J will survive. The heated journalistic competition that once drove the great newspaper battles is just moving online with different rules and economic models. Does it make sense for bloggers to get paid based on the traffic the generate? Don’t know. But I’m sure we’ll find out as that model and others evolve. And I love the idea of two or more snarling online competitors dogging local public officials the way Gizmodo and Engadget’s bloggers dog the tech industry.

Perhaps the thing that gave me the most hope in the Wired article was this quote from Gizmodo’s Brian Lam

“Bloggers and trade journalists, so desperate for a seat at the table with big mainstream publications, have it completely backward: You don’t get more access by selling out for press credentials first chance you get, kowtowing to corporations and trade shows and playing nice; you earn your respect by fact-finding, reporting, having untouchable integrity, provocative coverage, and gaining readers through your reputation for those things.”

Amen. Bring it on …