Web sites overvalued, report says

Interesting tidbit was that Huffington Post had just $300K in ad revenue, Salon.com less than $2 million. That's not a lot of money.

http://adage.com/mediaworks/article?article_id=133541

 

So the only brands worth a damn are old media companies, but the interwebs have decided that old media is dead?
Having dealt with a venture capitalist, I can say with confidence that this line "A lot of [venture capitalists] are idiots who are simply flushing money down the drain" is very much true.
They key is finding some one dumb enough to fund your media venture. I think the key is having a reasonably good-looking business plan, with a name or two attached and dumbass handing out the money.
The last part is the hard part.

 

Actually, Jay, the last part is already done.

Newspapers have plenty of dumbasses pouring money down a Web hole. Problem is, they're pouring the money into the wrong holes.

Newspaper sites need to make themselves relevant 24 hours a day. I see way too many posting material on cycles that are more mirrored toward the paper than the 24-hour newscycle. Also papers need to invest into video players -- a place a ton of money can be made. But that would mean working out a partnership with a TV competitor, and most editors are too stubborn to go that route.

And sadly, even if all those things were done to the optimum, it can probably only work in the right city market because paying to have enough staff to cover locally is actually more expensive than it is to cover a globally (like a CNN or MSNBC).

Those web sites are making massive amounts of cash because their expenses are usually cheaper than that of a metro paper -- smaller staffs -- while they're getting better advertisers.

Unfortunately, the Ad pie just isn't big enough for papers when it comes to the Web.

I hope this rambling makes some sense.

 

Again that comes back to papers. If they enter a partnership they need to demand the goods from TV. Don't allow it to be a one-way street.

But like I said before, I think the biggest problem local web sites (papers) face is the cost to cover a community. It costs a lot more to staff reporters, designers, editors, etc, compared to having to just staff editors and designers while relying on wires and a few freelancers (like national sites).

Local coverage just takes more pieces but returns less profits.

 

My buddy was in a similar situation. He was an editor of some metro twice-weeklies and partnered with a local TV station. I'd log onto the TV site and it would have the same stories his papers' sites had. But his papers' sites had no video. And, like you said, his papers got the obligatory "check the Podunk Herald for more on this" during the evening news.

 

Partnerships between TV and newspapers are hard to do. KSL and the Deseret News tried it in Salt Lake City, and it didn't last long.