Jason Calacanis writes:
Here is the new model:
1. Start a blog with adsense and make spare change.
2. Scale a blog to 250k to 1M pages a month and become big enough for Federated Media, AdBrite, and Blogads to care about you (i.e. sell your inventory)–now you’re making a living.
3. Scale over 1M pages a month and become big enough that you can afford your own sales group and fire Federated Media for taking 40% of your money because your cost of sales will be 15-20% as a stand alone business.
This is exactly what happened at the start of the Internet. DoubleClick used to do ad sales just like Battelle is doing at Federated Media. They got out of that business because the reward for helping a client to phase three was that they fired you–it sucks as a business (I still can’t understand why John got into it… I think he actually wants to help authors, which is noble, but I think as a business it doesn’t scale).