The Economist writes:
Now, however, a third category is emerging: the mom-and-pop blog. In the old days, we used to be called newsletter publishers, says Om Malik, a technology writer who quit his job at Business 2.0 magazine in June to work full-time on his blog, GigaOm. He has hired two other writers, and his blog now attracts about 50,000 readers a day, generating tens of thousands in monthly revenues. Costs, including salaries, are around $20,000 a month.
One big reason why his blog works as a small business, says Mr Malik, is that an ecosystem of support is appearing. Like Ms Armstrong, he farms out advertising sales and administration to a firm called FM, launched last year by John Battelle, who once ran magazines such as Wired and the Industry Standard. In his old business of magazines, says Mr Battelle, the cost of acquiring an audience was stupendousat Wired it was about $100 per subscriber. The cost of building a readership for a blog, by contrast, is nil. Once you have a lot of readers, however, the bandwidth costs become significant, and most medium-sized blogs cannot afford to hire the sales people needed to generate sufficient revenue. So FM’s 15 sales people negotiate with advertisers on behalf of blogs they represent, keeping 40% of the resulting revenues.