Speaking at an event in Austin, Texas, Thursday night, blogger and new media publisher Om Malik compared the print media giants to Detroit carmakers, and he questioned their ability to survive the changes pushed upon them by less costly and immediate distribution as well as lowered production costs.
Yet, by the end of his chat, he was ready to give at least a little credit to broadly focused publication firms such as the New York Times Inc. and Time Inc.
"It's not either/or when it comes to new media and old media," Malik said. "Everybody views every new face in the media business with skepticism, but those just nudge the existing players a little, and they find a place for themselves."
Malik has certainly created a place for himself with GigaOmniMedia Inc., which was formed in 2001. It took an undisclosed amount of venture capital in 2006 from True Ventures to capitalize on an audience Malik had built through his e-mailed newsletters and eventually turned into a full-time blogging gig. Now the GigaOm sites employ six reporters, four separate blogs and a total staff of 12. It's turning into a little media empire in its corner of the Web.
That said, Malik offered that the firm is still trying to figure out the best ways to monetize the considerable traffic visiting the site, calling those efforts "a work in progress." He also declined to comment on the potential profit margins, but he did say the company "flirts with breakeven." If he had wanted to stay small, he would be making enough for a nice lifestyle right now, Malik added.
Instead, Malik took venture capital, which means growth and an eventual exit for his backers have become driving considerations. Popular technology blog TechCrunch has venture backers, as does the political site The Huffington Post. However, it's uncertain what kind of exit they will provide investors.
For example, industry watchers speculate The Huffington Post will ride its popularity through the 2008 election and use that to prop up an initial public offering. GigaOm clearly has plans for a thriving media and conference business centered around Malik as the brand, but is an IPO the way to go? Malik mentioned the sale of well-read blogs to big media such as the New York Times.
Given his views about the role new media has to play in breaking news, the importance of letting writers keep their own voices rather than adopting a publication's style and interacting with its readers, I'm not sure Malik would welcome the M&A route. But if an IPO is the answer, GigaOm will likely start looking like the big media firms Malik maligns, with layers of editors and management standing between the writer and his or her readers. It will be interesting to see how Malik will straddle the line between his journalistic idealism and his company's need to satisfy investors and potentially become part of the media establishment. - Stacey Higginbotham
See August 2006 post from VC Ratings
See Oct. 2 post from TechCrunch