Case Study: The Business behind the Blog

During the Internet boom of the 90's, we saw the modern equivelant of the Gold Rush. People desparately wanted a piece of the pie. Companies with no profits were cashing out every day with big time IPOs. I lived in NYC at the time and it truly was exciting to be right in the middle of this whirlwind.

Today, we are seeing the 2nd Gold Rush aka web 2.0. Google and Yahoo are spending literally billions acquiring companies. Of course, for every YouTube or Digg, there are thousands of websites that struggle to make money or get noticed by the general public.
One of the more interesting technologies that has evolved in recent years is the blog. If you don't know what a blog is then you have been living under a rock because it seems like everyone has one these days. People have also discovered that a blog can be a pretty decent way to make money.

Let's take a closer look at one of the more successful blogs out there, TechCrunch. This blog was founded in 2005 by Michael Arrington and over 1 million people read this blog on a monthly basis.



Techcrunch focuses on profiling and reviewing internet companies and new startups in the web 2.0 space. He has a team of writers on staff to help write articles. I am an avid reader of TechCrunch. Content is updated multiple times daily which is critical to drawing your audience back to the site time and time again.

So, what's special about TechCrunch? Well, other than the fact that millions of people find their articles interesting, I submit that TechCrunch is based upon sound and proven business principles.

The recipe for a successul business is relatively simple but for some reason most people overlook the basics. The ultimate key to having a successful business is to provide a product or service that people want.

This is why I like TechCrunch - their niche appeals to a very wide audience while still being a niche. Ultimately, it's a numbers game. Unless you sell a product with a very high price tag, you have to reach a wide audience.

How does TechCrunch make money? Like any other good blogging site, they rely on advertising. They rely on multiple sources for advertising (diversity is always a good thing). Because this is a popular site, TechCrunch has some options that aren't available to smaller sites.

In the top right hand corner of their site, they sell sponsored links. I did some research and a spot in this section costs $10k a month. They only allow 6 sponsored links at any given time. Now, you do the math...from that 1 source alone, this site is generating a very nice revenue stream. What would you do to be able to sell an ad on your site for $10/month?

So, what's their secret? It's been said many time but content ultimately is king. TechCrunch provides quality content that is compelling for its users. Arrington has a lot of contacts in the press and the business community which has certainly helped with the site's popularity. However, without high quality content, none of that would matter.

Making money online is all about driving traffic to your website. While there are many tips and tricks on how to do this, nothing is more powerful than having good content.