It seems like everything is the worst thing ever lately. It’s kind of a weak segue, but you should still go check out my post about how teaching is a horrible job. How’s that for shameless self promotion?
Anyway, the other day, I was at Subway, having a chicken wrap before heading back to work lugging potato chips. And, like I always do at lunch, I like to check the Twitter to see what everyone is saying. Oh, and by the way, always get hot sauce on your chicken at Subway. Or anywhere really. Buffalo chicken is the ticket.
My attention was piqued by a post by one Investor Junkie, titled Why Google’s Panda Is Not Cute and Cuddly. Because it’s what I do, let me give you the gist of the article. The author is upset because the folks at Google did an update in their search algorithm, which was supposed to just be a minor thing, yet it cut down his Google traffic by 50%. In the eyes of Google, Investor Junkie has been a very bad boy. He was spanked, which isn’t nearly as sexy as a lot of spankings.
Obviously, he’s is upset about this. For those of you who aren’t bloggers, let me explain a little how the business model works, at least for most blogs.
Every couple days whenever I feel like it, I post new content. A portion of you are regular readers, eagerly awaiting whatever crap I decide to write about. For the most part, regular readers are pretty crummy for revenue. You don’t click on any ads, which is the main source of income around here. You just show up, maybe leave a comment, and then bugger off. All you do is increase pageviews, unless you read through Google Reader or email, in which case you don’t even do that.
Visitors from search engines are what pay the bills. They’re typically here because they want some specific piece of information. They’re impatient, they want the answer to their query now, dammit. This makes them much more likely to click on an ad, which puts a little bit of cash in Nelly’s pocket. And then, that cash gets blown on loose women. It’s a vicious cycle really.
Looking at blogging from a purely business perspective, it’s the equivalent of getting a large percentage of your revenue from one customer. Since nobody under 60 uses anything but Google, just about all of my search results come from them. If they decide to punish me for some reason, I’m pretty much screwed. I could whine all I want, and the guys at Google would just laugh at me. That’s exactly what happened to Investor Junkie.
And yet, we have a blogger who is aggressively buying up other blogs, Mike from The Financial Blogger. (along with his silent partner) They own around a half dozen financial blogs, along with a few niche websites as well. Luckily for us nosy people, Mike posts a monthly income update, so we can get a look inside a blogging business.
And what we see is that, at least for Mike’s company, it’s also a pretty crummy business.
Every single month, Mike publishes an online income report, which is a pretty interesting read, except for the fact it only ever records revenues and glosses over expenses. So each and every month, Mike boasts large revenue numbers, sometimes even cracking $10k per month. Impressive numbers, but, as is the case with any business, expenses are just as important as revenue.
Finally, a couple weeks ago, he delivered on the expenses side, writing a post called 3 Reasons Why You Shouldn’t Care About Your Expenses When Building A Side Income, or NAMBLA for short. In the post, Mike admitted to having $67k inyearly expenses, meaning his net income is a paltry $30k or so. They outsource a good chunk of their business, meaning it wouldn’t be that easy to cut their way back to prosperity in the event of a bad event- like a Google Panda update.
One thing is for sure- blogging isn’t passive income. If me or any other blogger suddenly went away for any longer than about a week, we’d start to lose traffic, maybe permanently. You people continue to want new stuff, and search engines will always value blogs that consistently have new content. I have to keep on top of private advertisers and do a whole bunch of other things to keep this bad boy running. So why would I take my hard earned cash and invest it in something that requires more work?
Besides, as other bloggers see their blogging profits go up, they’ll be on the lookout for other blogs to buy, meaning there’s multiple buyers out there. I like to buy things when they’re unloved, not when there’s about a dozen other would be buyers. And, admittedly, I know very little about monetizing a blog. My whole strategy can be summed up in one sentence: write good stuff, and they will come.
Yeah, I don’t get why you’d buy a blog. It seems like a pretty risky business. I’ll just keep doing this as something to do, and hopefully I can make a few bucks off it. And if not? Well, maybe I’ll be the one looking to sell. I don’t think I’d ever expand my blogging empire though.