Tuesday, January 18, 2005 12:59 PM
The financial blogosphere has recently been abuzz about weblogs, really simple syndication (RSS) and money-making opportunities. In particular, the buzz has centered on investing opportunities in the weblog and RSS sector as well as speculation about how the sector will make money (e.g., how online advertising will be integrated into blogs and feeds).
In terms of investing, a blog called The Internet Stock Blog is speculating that Yahoo! will acquire Six Apart to ensure that it matches Google and MSN in offering weblog editing and hosting services. Six Apart, of course, owns both a leading weblog editing product and weblog hosting service (Moveable Type and TypePad). And, Six Apart recently did some acquiring of its own in its purchase of Live Journal.
In my mind, however, deciding whether or not to buy Yahoo! stock is not nearly as interesting as the commentary of financial analysts who are trying to figure out the dollars and cents that the blogosphere may offer. Microsoft has signed up 1.5 million people in the first month of offering its weblog service MSN Spaces. Google and Six Apart both also have millions of blogs under their watch, not too mention vast numbers that a whole host of smaller players in this sector combine to add (Userland Software and Squarespace to name just a couple). And, to the financial analysts, those numbers represent millions of online advertising opportunities.
Morgan Stanley analsysts believe that Yahoo!, in taking a leadership position in developing new ways to leverage syndication formats such as RSS, is beating Google in the area of serving information (as compared to Google's leadership in searching information). And, serving information may be a significant profit-generating area for those companies who can master it (and the online advertising, etcetera that will ultimately be a part of it). You can read the full Morgan Stanley report for yourself by clicking here (opens as a pdf). Note: In a nod to the blawgosphere, Law Professor Lawrence Lessig's blawg is highlighted in the report.
Now that it is clear that the biggest online players (Microsoft, Google, Yahoo!) have more than a passing interesting weblogs and syndication, it seems self-evident that continuing consolidation will occur among the various small companies and start-ups that have largely made up the sector to this point. Yahoo! could take Microsoft's approach and deploy its own weblog service or it could buy its way to market share through strategic acquisitions. Regardless of what it decides, it seems a safe bet that all three will be working to innovate and find new ways to make money in the weblog sector.
Which leads me to a final (and oft-stated) thought: where are the biggest players in the legal vertical? When it comes to the blawgosphere, there seems to be a lot of legal sector companies standing on the sidelines. Perhaps it is because they don't see how they can make money. Perhaps they are just biding their time and waiting for the appropriate moment to get involved. Whatever the reason, it seems pretty clear that they will be the followers; the rest of the online world is leaving them in the dust.
In the end, and at the very least, the reality that financial analysts are focusing on the weblog and online syndication sector as a strategic, money-making venture for the largest online companies, may just mean that weblogs are coming of age.