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Gigaom: The Life and Death of a Venture-Funded Media Startup

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Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#11

Post by mtbcoder »

Throwaway90283 wrote: post #4
shubhamjain wrote: post #2

I find surprising that sites like Gigaom and Dr. Dobbs which actually try to provide value to their users with original content, die because their ad revenues are not suffice to cover up their costs, while site like Buzzfeed, filled with clickbaity headlines, and dumb articles, pass $100M in revenues[1]. Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues. [1]: http://www.capit…

Why is it surprising? It's faster and cheaper to write clickbait articles, and they have a wider appeal. People are much more likely to click and share something with the name, 'What Disney character are you?' or 'Top 10 reasons you should start going out on Tuesday nights', compared to anything on Gigaom. It takes a lot of time to write proper articles, to check the facts, to follow up with sources, and to maintain…

> I'm sure they could trim the fat

Indeed, the article mentions they were paying for office space in both Manhattan and San Francisco.

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#12

Post by [deleted] »

toni wrote: post #10
dagw wrote: post #8

Earlier quoted context omitted.

The huge difference is that I imagine that the vast majority of people subscribing to Janes don't do it with their own money, and as such aren't very price sensitive. I imagine that mosy people subscribing to GigaOm are almost certainly doing it with their own money. Also IHS (the people who publish Janes) have a whole host of other products and well as consulting services, so they can easily afford to run Janes.com…

I agree that Janes' subscribers are using their corporate credit cards to pay the subscription costs, but I also think that Gigaom had the potentials to walk into the same path. Take a look at the first screenshot in the story[1], Om Malik describes the site in 2006 as a "broadband weblog". The kind of quality articles on Gigaom were not comparable with link-baity nature of TechCrunch/Mashable or Engadget/Gizmodo. Th…

[deleted]

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#13

Post by higherpurpose »

shubhamjain wrote: post #2

I find surprising that sites like Gigaom and Dr. Dobbs which actually try to provide value to their users with original content, die because their ad revenues are not suffice to cover up their costs, while site like Buzzfeed, filled with clickbaity headlines, and dumb articles, pass $100M in revenues[1]. Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues. [1]: http://www.capit…

That's not really what I got from the article. What I got is that they spent $8 million on god knows what and within a year they were already in debt and they couldn't pay their creditors anymore = bankruptcy.

I think they tried to expand rapidly into new business models and lost all the money and then some. I don't think it was because they weren't getting enough money from ads to sustain the news business, or at least I haven't seen anyone seriously put forward that theory so far (from the company).

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#14

Post by VLM »

higherpurpose wrote: post #13
shubhamjain wrote: post #2

I find surprising that sites like Gigaom and Dr. Dobbs which actually try to provide value to their users with original content, die because their ad revenues are not suffice to cover up their costs, while site like Buzzfeed, filled with clickbaity headlines, and dumb articles, pass $100M in revenues[1]. Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues. [1]: http://www.capit…

That's not really what I got from the article. What I got is that they spent $8 million on god knows what and within a year they were already in debt and they couldn't pay their creditors anymore = bankruptcy. I think they tried to expand rapidly into new business models and lost all the money and then some. I don't think it was because they weren't getting enough money from ads to sustain the news business, or at le…

"they spent $8 million on god knows what"

Their opex was incredible. Look at salaries alone just what was mentioned in the article, somewhere around 4 dozen people? That's less than $200K/yr salary per person don't forget they had a website and office space and misc expenses and presumably the employees had benefits (per my W-2 form my families health insurance cost my employer $24K last year, and there's only 4 of us).

There is a simple math problem that explains the problem. Eight million per year in opex divided by six million visitors a month means somewhere around ten cents per page view cost. If you get more than a buck or so worth of ad revenue or "whatever" per page view you win. If you get five cents of ad revenue or "whatever" per page view you rapidly run out of money and close. The number of sites that get a buck of revenue per page view is pretty small. The other strategy is yellow journalism "click here for 10 things you never knew about hacker news" and hope for 60 million page views instead of 6.

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#15

Post by dagw »

toni wrote: post #10
dagw wrote: post #8

Earlier quoted context omitted.

The huge difference is that I imagine that the vast majority of people subscribing to Janes don't do it with their own money, and as such aren't very price sensitive. I imagine that mosy people subscribing to GigaOm are almost certainly doing it with their own money. Also IHS (the people who publish Janes) have a whole host of other products and well as consulting services, so they can easily afford to run Janes.com…

I agree that Janes' subscribers are using their corporate credit cards to pay the subscription costs, but I also think that Gigaom had the potentials to walk into the same path. Take a look at the first screenshot in the story[1], Om Malik describes the site in 2006 as a "broadband weblog". The kind of quality articles on Gigaom were not comparable with link-baity nature of TechCrunch/Mashable or Engadget/Gizmodo. Th…

could have been the Janes of IT industry

Which part of Janes? If you look at the whole portfolio of service offered by iHS, then they are much closer to something like Gartner Group than a publishing house. I imagine that the real money comes from writing custom reports and consulting work, with the high technical and very expensive years books coming in second. Their books and magazines are probably as much a marketing tool as a revenue stream.

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#16

Post by majani »

shubhamjain wrote: post #2

I find surprising that sites like Gigaom and Dr. Dobbs which actually try to provide value to their users with original content, die because their ad revenues are not suffice to cover up their costs, while site like Buzzfeed, filled with clickbaity headlines, and dumb articles, pass $100M in revenues[1]. Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues. [1]: http://www.capit…

Gigaom provided value to you as a reader, but what did they do for their clients, the advertisers?

On a basic level, advertisers are looking for reach and frequency for their ads.

These two requirements are nearly impossible for a high level content publisher to achieve on the internet, where good reach means 10 million readers plus and good frequency means over 50 million page views from that audience. I'm sorry but not that many people are looking for enterprise tech stories, which were Gigaom's forte

Factoring for VC expectations, and you're looking at much larger traffic requirements to satisfy business targets.

High level content has to either: 1. Operate as a small ad business online, no VC 2. Operate in other medium such as magazines, where smaller reach would be appreciated by advertisers

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#17

Post by london888 »

I think Gigaom had a harder time competing in an ever-increasing market against sites like HN end even Quora where the comments (especially here in HN) I often find insightful.

I wonder if Om had returned to the helm, cut staff/costs, and made Gigaom much more about his own preoccupations and interests, that would have worked better.

I liked the 'world of Om' a lot and I think this has potential for attracting an audience. Maybe all it needs is 2-3 staff members if that.

Kind of a Gruber/Stratechery/Quora/HN/Reddit hybrid.

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#18

Post by ghaff »

Not clear from this or other pieces I've read how much of the downfall had to do with the news part of the business although--as others have said--the cost structure may have been relatively high and the traffic, compared to clickbaity and more consumer-oriented sites, was relatively low. What does seem to have been the case from this piece and one or two others is that there was a lot of pressure to grow the research side of the business and they were "investing" a lot to do this.

In my experience, their research was a bit of a mixed bag. They were trying new business models with primarily a lot of freelancers. Some of it worked. Some of it didn't. They had some smart folks in their stable who did a nice job for a reasonable cost doing things like webinars. Let's just say other dealings weren't as positive.

Re: Gigaom: The Life and Death of a Venture-Funded Media Startup

#20

Post by jmngomes »

shubhamjain wrote: post #2

I find surprising that sites like Gigaom and Dr. Dobbs which actually try to provide value to their users with original content, die because their ad revenues are not suffice to cover up their costs, while site like Buzzfeed, filled with clickbaity headlines, and dumb articles, pass $100M in revenues[1]. Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues. [1]: http://www.capit…

Surprising...not really. Saddening...very much, as it is a reflection of where press, as an industry, is going.
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