Businessweek on Henry Blodget: Passages on the future of news sites

I dug into this Business Week profile of Henry Blodget from the the Business Insider a few weeks ago.

Blodget is the editor of TBI — a business and technology aggregation and content site dubbed the ‘hooters of the internet’ — after being forced out of a financial analyst career for fraud allegations.

I wanted to share two passages from the piece that spoke widely to discussions around the future of news.

First:

At his office, Blodget provides a dem- onstration of how he manages the flow of content on TBI. “For a Friday afternoon where everyone’s watching World Cup, this is doing pretty well,” he says of the story sitting at the top of the home page, “The 30 Most Famous Yale Students of All-Time.” The Web slide show features photos of Yale alumni with biographies pulled from Wikipedia. The main illustration is an image of Claire Danes—titillating photos of women are a TBI trademark. Blodget points to a red number on his screen indicating that the Yale slide show is receiving about 400 clicks per hour. The number doesn’t actually represent a whole hour’s worth of data; the counter is immediately extrapolating from the clicks it’s getting to estimate how much traffic the story will receive in one hour’s time. This ability gives TBI editors an idea of how something is performing within a minute of posting, so they can adjust the presentation accordingly. A photo or headline could be changed, for example, to see if it improves traffic. “Maybe there’s a story down the page that’s doing extremely well, so we’ll put it right on top and it will suddenly explode, because it’s what people want,” Blodget says. “We’re very much reacting to what our readers want to read.” [Source]

And

Ryan and Blodget soon figured out that micropublishing—creating advertising-supported content for a very small, precise audience—didn’t work economically; advertisers are more interested in reaching mass audiences than they are in pinpoint targeting. Blodget added new content and expanded the site into a collection of blogs under the TBI banner—Wall Street, tech, media, and the like. He started aggressively using search engine optimization, or SEO—essentially finding out which subject are Googled most often and writing posts about those subjects, leading to coverage of everyone from The New York Times‘ Paul Krugman to Tiger Woods to Al and Tipper Gore. He also raised money—about $3 million in venture capital funding in addition to another round he is completing now, and his staff has grown from 3 to 30 employees.

The strategy seems to be working: According to Blodget, his site is getting about 4 million unique visitors per month, which translates to about 2 million people. TBI counts Mercedes-Benz, American Express (AXP), and Harvard Business School as advertisers, and Blodget claims that TBI will break even this year; he hopes that display ads soon will be only one part of the company’s revenue. He wants to develop a business model similar to the blog TechCrunch, which makes a significant portion of its revenue by hosting multiday conferences, a ticket to which costs almost $3,000. Blodget is also trying to launch a business-to-business subscription service that would provide companies with the kind of detailed analysis he once provided on Wall Street. [Source]

He made TBI by launching a bunch of niche blogs and says he makes the real money with the niche blogs put together — not one site, but the collection of them together.

Finding alternative revenue sources is fundamental and niche advertising is a key but cross-platform, networked-based sponsorships are valuable, lessons for News Inkubator.