If you’ve wondered how Michael Arrington became one of Silicon Valley’s biggest stars over the past few years, Elias Bizannes breaks it out down in an extensive post.
TechCrunch has thrived for a number of reasons, including being at the right place at the right time. Arrington and TechCrunch emerged at a time when the online start-up world was beginning to emerge again after a nuclear winter following the end of the dot-com boom. There was an appetite for news about interesting companies, and Arrington delivered it in spades.
To his credit, Arrington became more than just a popular blogger who carved out a comfortable living by just writing. He started several other blogs, threw parties, launched conferences, invested in new start-ups, and built the TechCrunch brand through a flurry of public appearances.
It’s truly impressive and one of Silicon Valley’s biggest Web 2.0 entrepreneurial success stories.
But what does the future hold for Arrington and, arguably, other Web 2.0 dojos such as Om Malik (GigaOm), Richard MacManus (ReadWriteWeb), Pete Cashmore (Mashable) and Allen Stern (CenterNetworks) in 2009?
With the economy sputtering and venture capitalists reluctant to finance start-ups, it will be interesting to see how the leading Web 2.0 news organizations respond strategically so they can thrive during tough times.
One of the fundamental questions is whether there will be enough “juice” to support growth or, for that matter, the status quo. If advertising declines, particularly by attention-seeking startups, how will that impact TechCrunch, GigaOm, ReadWriteWeb, et al? And if the number of new start-ups shrinks, does that create less editorial fodder to attract readers?
In other words, if the Web 2.0 world becomes less active and engaged, how will that affect the businesses that cover it?
What TechCrunch, GigaOm, et al have going for them is strong brands that should give them the wherewithal to weather the storm. If times get difficult, the stronger players, in theory, should be able to survive while second and third-tier players struggle.
As well, the leading players have two other advantages: diversified operations (multiple blogs, conferences) and the relatively low operating costs. (GigaOm also has $4.5-million of venture capital).
My sense is TechCrunch, GigaOm, et al will be able to navigate difficult times, although they’ll have to be more pragmatic about expanding operations. If they can make it through relatively unscathed, they’ll emerge as stronger entities and have no lack of opportunities to pick up assets (blogs, etc.) that aren’t so lucky.
Technorati Tags: techcrunch, om malik, michael arrington
20 Comments
Thanks for including CN in your list Mark! – Happy new year!
I expect that there will be consolidation. VC has slowed down, so there will be less money available for advertising. The other real problem for all these guys is traffic is moving from blogs onto social networks and they haven’t yet figured out how to deal with social networks properly yet. Arrington is already attacking them, which shows he knows what’s going on. He told me that 2% of his traffic already comes from Twitter, which is pretty significant. 60% comes from Google, so only 40% comes from other blogs or social networks. Growth has already stalled for many of the ones you mentioned, according to Compete here: http://siteanalytics.compete.com/centernetworks.com+techcrunch.com+gigaom.com/?metric=uv
News about startups just isn’t as interesting lately and that’s got to be troubling for everyone mentioned here.
I should note that Mashable’s traffic is up recently, according to Compete, which is also troubling for TechCrunch. I don’t get that, though. Mashable lately hasn’t been as interesting as ReadWriteWeb, in my view. I think there’s a blog post in there about that. http://siteanalytics.compete.com/centernetworks.com+techcrunch.com+gigaom.com/?metric=uv
Robert,
Thanks for the insight. It is pretty interesting to see how Twitter is driving a lot of blog traffic as opposed (or in addition to) direct, RSS feeds, etc.
There will be layoffs, as there have always been during downturns in advertising. None of them will go under, though, because they can pretty much all shrink back to one-man operations. They just can’t become media empires. If there are consolidations, it will be because someone (Arrington would be my best guess) gets disgusted with this business and moves on to another one.
The Web 2.0 space is definitely in for change ahead. We already know that the blog / web empires are being broken down by virtue of the traffic that feeds them, e.g. twitter, friendfeed, facebook, social median, strands, etc.
As this social sites continue to gain precious control of inbound traffic, Web 2.0 “dojos” will have to not only learn how to respect that new traffic, but also learn how to leverage it! Scoble is a pioneer in that regard as he’s wisely embraced Friendfeed, which I see is the next generation blogging platform. Friendfeed is more than just an aggregator now…it is THE hub of conversation and will only get bigger – a true threat to the old blog silos.
Also challenging is a plethera of environmental factors such as failing global economies, dying industries, shrinking margins, and unprecedented layoffs. Even today’s news about all-time low holiday spending spells trouble for Web 2.0. EVERYONE is spending less, including Web 2.0 customers. The pinch is coming …are you ready for it?
Susan Beebe
http://twitter.com/susanbeebe
http://friendfeed.com/susanbeebe
Most the content creators you mentioned are famous now because they jumped on the board before the web 2.0 wave came. They saw it from afar and was ready. Hopefully they haven’t lost their ability to leave one wave and paddle back for the next one…
Few thoughts here…
To Robert’s comments, it’s not an either or scenario. Social networks and search will help all of us filter out the noise and hone in on the signal. Some of this will be blog content. Other times it will be media content. (For example, I found this post via Susan Beebe’s Facebook link.)
Second, I would also expect to see these sites diversify their revenue streams beyond advertising and events. Research is a good area and one that probably leaves Forrester and others overpriced. Om is already publishing solid white papers. More to come I suspect. Databases are another. Crunchbase may have unlocked value.
Finally could there be a premium offering for subscription blogs? In other words, maybe there’s a premium version of TechCrunch that is for VCs and reasonably priced.
Steve
Hi!
I don’t think there is a massive need for consolidation, simply for the fact these guys are a dog in a garage operation that don’t have huge costs to push them into an acquisition. Falling revenues maybe, but unlike the traditional media, they won’t be affected as much as there overheads are low and controllable (ie, contract labour).
I think there will always be a market for this information. I don’t think there is less interest in start-ups as Scoble says because people have an economic incentive in keeping up with the news. What I think is a bigger threat, is the attention economy and huge amount of sources now available to people. Arguably with the microblogging services, we no longer need a big blog to break the news, but just a company to post an announcement and to have a strong presence on Friendfeed.
Robert, setting aside the fact that 60% + 40% + 2% = 102%, it doesn’t follow that 40% of Techcrunch traffic comes from “other social networks”. It’s much more likely that that traffic comes from non-social-network sources such as bookmarks, blog aggregators, and syndication partnerships.
I’m sure they will come up with something to cover – you’re right, there won’t be as much as the last few years — but these guys are pretty creative and good writers. I think they’re smart enough to shift with the times.
The internet isn’t going anywhere, there are things to talk about.
The comments here are well-informed.
All web companies are going to feel some effect, but tech bloggers have a number of huge strategic advantages: very low burn rate; a massive base of influence; more connections and visibility than virtually any other players in the space.
It’s gonna be a challenging but fruitful year!
Techcrunch will survive — he’s diversified enough and high enough profile to continue on without being hurt too badly. I’m guessing enterprise topics will become more prominent again, which positions TechcrunchIT well. He’s got great writers and the brand.
I want to see ReadWriteWeb thrive because I think they have great, relevant and detailed content. I’ve been disappointed in Mashable lately, unsubscribed from them last week.
Bottom line is this: Even in recessions, people read and look for information. As long as that information is available, they’ll continue to thrive and survive. I’ve no doubt that Techcrunch will be one of the survivors.
If TechCrunch was located in Greenland, then I would say they are in for tough times. The only way that these people would stall is if the news stalls. Fortunately for us, we like to move in a forward motion.
There may be some scaling back, but that’s mostly it. If you got a readership, the only way they’re gonna leave is if their either don’t see eye to eye with you anymore, or they just can’t get to the site.
RWW is taking a professional approach which I think will dominate that space over time …. and regardless of what ‘we’ may think, overall it’s a small space ….with room for just a few honest and dedicated players
Good morning, Mark and hope you had a Merry Christmas / Happy Holiday.
I think Om should make it through relatively unscathed because he tends to cover deeper and wider issues in the space. He’s also got VC funding in the bank and with this being pretty much a variable business, I don’t see how he couldn’t stretch it into the next upswing.
You know I’ve been pretty vocal about my criticism of Arrington and TechCrunch right from the first e-mail message I sent you after TC40. From a business perspective, TC has done more damage to the Web 2.0 ecosystem than anybody else by glorifying Web 2.0 “companies” that I can only categorize as “no biz model, no utility, kid powered apps”.
By doing so, he encouraged other entrepreneurs to do the same, which led to a wasted generation of programming and brain power.
Arrington clearly did not learn much from Pets.com and other useless companies of the dot-bomb era. He got caught up in the hype of me-too apps that promised a gazillion page views and eyeballs — but failed to articulate how they would generate $1 of profit. Look no further than the carnage of his dead pool as evidence of TC’s reporting failures.
Web 2.0 should have been about focusing on leaders that deliver useful apps that could meld into the mainstream and create value. Freshbooks should have been the poster child and, yes, companies like AGORACOM should have been highlighted as well. Why? Freshbooks/AGORACOM and others were able to use Web 2.0 technologies to deliver real value into the marketplace. Real value for customers, users, founder and investors.
Had he focused on these kinds of companies, he would have encouraged a generation of programmers and entrepreneurs to take a different, less cool but far more productive path that would have yielded a far better result for the entire web 2.0 ecosystem.
Instead, Arrington got caught up in his ego and chose to focus on those that would come lapping at his doorstep. What he failed to realize was that real entrepreneurs like Mike McDerment didn’t have the time or inclination to pay homage to him by visiting his ridiculous house, thereby eliminating any chance of meeting and reporting on real companies.
Even guys like me that dropped nearly $20,000 to sponsor TechCrunch 40 could not get his attention for more than 2 minutes. Not only did he not come by to thank us for the sponsorship – a common courtesy – my attempt to arrange a 5-minute sit down with him was rebuffed with a curt and rude “no”.
5 minutes with a sponsor,are you kidding me?
His business and personal approach tell you everything you need to know about the future of TechCrunch. I don’t think he’ll go under but his focus on lapdogs and “the elite” has alienated a lot of middle ground.
Sooner or later, that is going to hurt your business. I know that I’ll never sponsor another TC conference again.
Give me Mesh and StartUpNorth anyday.
Regards,
George
Is there really going to be a huge issue here? How expensive is it to run a blog?
Sure, they have some employees, but it isn’t a capital intensive operation, so I think they will easily be able to weather the storm.
I am pretty sure that both blogs and social networks will do good, I don’t get the “blogging is dying” idea – it’s transforming for sure, but being a cornerstone of social networks in itself, and being something that most social networks is build upon. In addition to succesful blogging and online presence in social network, you really need to supply it with initiatives and offline events.
So I think the fundementals and the recipes for web 2.0 is secured for a while ahead
Om Malik is a suck up. Total tool.
Om Malik is a good entrepreneur.
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[...] eine Empfehlung: Elias Bizannes (Liako.Biz) hat einen sehr guten Artikel darüber geschrieben, wie Michael Arrington zum Blogger wurde. So entstehen Medien und Meinungsmacher [...]