Provocative post by Jason Calacanis on the Bloglines sale. He says it’s “a horrible business and it will never make money.” The reason? He reckons “95-99% of the RSS reader market” will belong to the Big 3 of Yahoo, Microsoft and Google within 2 years. That’s the ‘bigco will crush littleco’ theory, which is an easy one to throw about (I’ve done it myself).
What’s really intriguing about Jason’s post is that he has some interesting inside information about Bloglines’ touted contextual advertising strategy. Remember the story that broke back in mid-December when Mark Fletcher spoke to Jupiter Research analyst Eric Peterson? At the time, very few bloggers linked to it or showed any interest in what Bloglines was planning. But I wrote about it and soon after Mark Fletcher himself referenced my post (after first commenting on my earlier RSS market share post). Mark wrote on 20 December:
“In another post, Richard MacManus points to a blog post by Jupiter Research analyst Eric Peterson based on a conversation Eric and I had last week. Eric was interested in the business model behind Bloglines. Not accepting my usual stock answer of “Volume!”, I detailed that we will integrating highly targetted contextual advertising into Bloglines next year, or “Adwords on Steroids” as Eric puts it (I like that description!). To reiterate what I told Eric, when we do start to roll out advertising, we will be very sensitive to user feedback, and we will be looking to our users to help guide us in this area.”
With the benefit of hindsight, I’m wondering now if Mark was ‘testing the market’ with his announcement that Bloglines would be doing contextual advertising in 2005? He certainly got some swift (and passionate) responses from users – and the outlook wasn’t good. Martin Schwimmer, a trademark lawyer, demanded that Bloglines remove his RSS feed from their service and Bloglines quickly complied. The upshot of that case was that although Schwimmer was mostly condemned in the blogosphere for his stance, the fact remained he had highlighted a legal grey area – and Bloglines had backed down.
Now we find out that Jason Calacanis was also having a behind-the-scenes conversation with Mark Fletcher. Here’s how Jason puts it in his latest post:
“…after a half dozen emails he [Mark Fletcher] finally got back to me to promise he wouldn’t sell ads against our blogs. He claimed he was just speculating about possibilities. OK, sure.
Of course, he did have to promise me because I—and the other blog publishers out there—would never let him sell ads against our full-feeds, let alone target our users.”
So there was a fairly blunt warning that weblogsinc for one would not have put up with contextual adverts wrapped around their content in Bloglines. I suggested in my Web 2.0 weekly wrap-up last week that “the Martin Schwimmer episode might have spooked Bloglines into abandoning their contextual advertising strategy, in favour of quick bucks in the current RSS/blogging investment frenzy”. So yes I think that Bloglines was scared off the contextual adverts strategy, by Schwimmer and Calacanis (probably others too).
I also wonder whether it was a purposeful ‘leak’ by Mark to Eric Peterson back in December, in order to get a gauge on how content producers would react to the advertising idea. It certainly saved him time, money and a lot of grief – imagine if Bloglines had rolled out the contextual adverts and only then found out that users were up in arms about it.
Originally published on ReadWriteWeb (archived copy)