Bigger Bucks for The Blogosphere

Over the past decade, John Battelle has shown a flair for creating innovative media properties. In the 1990s, he helped found Wired magazine. During the dot-com boom, he launched The Industry Standard. And in late 2005, he published a book on Internet search technology just as Google Inc. blasted into the stratosphere.

Now, Battelle is at the forefront of a movement attempting to answer one of the Web's most vexing questions: How do you turn blogging into a day job? Millions of people publish blogs and other niche Web sites, but they struggle to make a living from their passion.

Battelle thinks his new company, Federated Media Publishing Inc., can be part of the solution. The Sausalito (Calif.) startup is signing up hundreds of the best sites and selling their ad space to brand-name advertisers such as IBM, Absolut, and Hewlett-Packard. Federated Media doesn't own the blogs, as do other blogging networks such as Gawker.com, but it keeps 40% of the ad revenue and gives the rest to the site's owner. "It's kind of like a music label, except we don't control their intellectual property and tell them what to sing," says Battelle.

Federated Media represents just a drop in the advertising ocean. But the venture is off to a promising start. Last year, it sold more than $10 million in advertising for about 90 Web sites. This year, Battelle says it is on track to turn a profit and increase sales fivefold.

On Feb. 5, Federated got a boost by announcing it had signed as advertisers Cisco Systems, Nissan, and Nike, and 20 new sites, including video blog Rocketboom. It also re-signed Boing Boing, Digg.com, and a few other larger sites to long-term contracts. "It's a very compelling idea," says Daina Middleton, director of interactive marketing for Hewlett-Packard's imaging and printing group, which is working on an online campaign aimed at graphic artists. "You are able to enter a community of bloggers in a unique way."

Battelle's biggest challenge may be managing growth. Last year some sites grumbled that too much of their ad inventory went unsold as Federated Media focused on signing new properties. Jason Calacanis, the former owner of Web Logs Inc., a blogging network bought by AOL in 2005, says the big limitation is that Federated Media doesn't own the sites: "The second you build your client's business past $500,000 a year, they hire their own sales force."

Battelle believes the relationships he is building with advertisers will help it clear that hurdle. "Boing Boing is never going to get into the offices of General Motors," he says. "But Federated Media does all the time."