Blodget's big bet on business journalism online

Andrew Goldman of Bloomberg Businessweek writes in the latest issue about former Wall Street analyst Henry Blodget and his business news site The Business Insider.

Goldman writes, “Blodget added new content and expanded the site into a collection of blogs under the TBI banner — Wall Street, tech, media, and the like. He started aggressively using search engine optimization, or SEO — essentially finding out which subject are Googled most often and writing posts about those subjects, leading to coverage of everyone from The New York Times‘ Paul Krugman to Tiger Woods to Al and Tipper Gore. He also raised money—about $3 million in venture capital funding in addition to another round he is completing now, and his staff has grown from 3 to 30 employees.

“The strategy seems to be working: According to Blodget, his site is getting about 4 million unique visitors per month, which translates to about 2 million people. TBI counts Mercedes-Benz, American Express, and Harvard Business School as advertisers, and Blodget claims that TBI will break even this year; he hopes that display ads soon will be only one part of the company’s revenue. He wants to develop a business model similar to the blog TechCrunch, which makes a significant portion of its revenue by hosting multiday conferences, a ticket to which costs almost $3,000. Blodget is also trying to launch a business-to-business subscription service that would provide companies with the kind of detailed analysis he once provided on Wall Street.

“Blodget’s hits-at-all-costs strategy has generated a healthy share of debate in the online media world. In March, John Carney, the managing editor of Clusterstock, TBI’s Wall Street vertical, was fired, by many press accounts because his posts weren’t attracting enough clicks to justify his high salary. The Thomson Reuters business blogger Felix Salmon took to Twitter to defend his dismissed friend, criticizing TBI for its click-baiting practices, specifically citing a story about American International Group’s distressed asset sales that was illustrated with two attractive women in bridal gowns making out. ‘Henry talks about selling high-value analysis to financial professionals, but at the same time he’ll put up two girls kissing and embrace being called the Hooters of the Internet,’ Salmon says. ‘It becomes much harder to sell that kind of thing because it’s all a little bit schizoid, really.'”

Read more here.