Perhaps, it seems like 'content-is-the-king' is not optimal if you are looking for revenues.
[1]: http://www.capitalnewyork.com/article/media/2014/11/8557366/...
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 a respectable reputation.
I'm sure they could trim the fat, and maintain a small group of dedicated writers, pay the bills and make a living. However, they raised quite a bit of money, so they kind of need to go big or die at this point, and going big is not easy for the reasons I mentioned above.
Indeed, the article mentions they were paying for office space in both Manhattan and San Francisco.
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
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).
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.
According to the editor-in-chief of Dr. Dobb's, there's been a recent, structural shift.
Sure it is -- but if you are selling eyeballs, then the content is king is content that is geared to get eyeballs and get the maximum number of ad views out of them.
If you are selling content to those consuming it directly, then the utility of the content to the consumer is the key thing -- but that's different than the advertising-supported model.
They are the buzzfeed of another market. It seems pretty clear that if you want to go big, you need to compromise on the quality.
"Why" is left as an exercise to the readers.
For example: It seems pretty clear that a bunch of work was done on a research product for GigaOm, but their thinking around it was very off target. $79/year is less than a Netflix account costs. Yet, the author doesn't come out and say "and this proved to be a big mistake."
GigaOm sounds like a scenario where people were "playing startup" for several years and eventually reality set in. They appear to have never been profitable, yet they acquired a company, took out a disastrous loan and raised more and more money. From what I'm reading in articles like this, the people running GigaOm sound like they made a lot of dumb decisions, yes, but it also sounds like GigaOm was never really a real business at any point.
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.
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.
