I’ll cross post this to SearchBlog, but it’s not a bad time to be starting a business that has as its primary business model online advertising. The industry is posting record numbers, quarter after quarter.

From the ClickZ piece:

Online ad revenues for 2004 were up 33 percent to $9.6 billion, the highest level ever, according to the latest report from the Interactive Advertising Bureau and PricewaterhouseCoopers.

The latter number makes Q4 2004 the most lucrative quarter ever reported for the medium, according to historical IAB/PwC results. That’s perhaps not surprising, as the quarter included both the final four weeks of the Presidential campaign and the holiday season. It was the second consecutive year in which Q4 revenues were up year-over-year.

“Follow the money.” It’s a tried and true motto of many a reporter, and so I guess it’s no surprise that when there’s news of money being made by blogs, it merits coverage.

But I’d like to add that perhaps it’s not just about money, it’s about model – how bloggers are getting paid, which bloggers are getting paid, and what it means for publishing models, for independent commentary, for audiences and conversations that bloggers just might be able to make a living at this. If they can thrive, that’s the real story. Whether that happens at FM, or at other places, matters less. At this moment, print is getting remixed into the Web 2.0 world. The same is happening for audio, photography, and video. There’s room for everyone.

OK, this cover story (find it here on BizWeek online), written as if it were a series of blog entries, goes a bit over the top to start:

How big are blogs? Try Johannes Gutenberg out for size. His printing press, unveiled in 1440, sparked a publishing boom and an information revolution. Some say it led to the Protestant Reformation and Western democracy.



OK, but, it makes some good points germane to FM once we get past the bluster:

Think of the implications for businesses of getting an up-to-the-minute read on what the world is thinking. Already, studios are using blogs to see which movies are generating buzz. Advertisers are tracking responses to their campaigns. “I’m amazed people don’t get it yet,” says Jeff Weiner, Yahoo’s senior vice-president who heads up search. “Never in the history of market research has there been a tool like this.”



And this:



One more idea. Think of TiVo, (TIVO ) think of the iPod. When you’re using one of them, do you consider the company that provides the programming? CBS, for example? Not much. You’re putting together your own package. The pieces come from lots of companies and artists. Often you don’t even know where.

Aggregators do the same job for the Net. So, just like the record companies, which have figured out how to market bits and pieces of their albums as standalone songs and ringtones, the rest of the media and entertainment world is going to have to think small. Content, whether it’s news or a Hollywood movie, is going to travel in bite-size nuggets. The challenge, for bloggers and giants alike, is to brand those nuggets and devise ways to sell them or wrap them in advertising.



Well, not exactly, but sort of. This model does not work, to my mind, if the advertising is not endemic and respectful of the conversation each site fosters. For more on that, read my Searchblog posting “Toward the Endemic….:

Also, the idea of an aggregator is often misunderstood. While readers are often overwhelmed by too many choices and wish for a service to guide them through it, the interesting aggregation service, to my mind, faces the marketer, not the reader, and is sophisticated and selective rather than overbroad and ravenous for traffic.

A prediction: Mainstream media companies will master blogs as an advertising tool and take over vast commercial stretches of the blogosphere. Over the next five years, this could well divide winners and losers in media. And in the process, mainstream media will start to look more and more like — you guessed it — blogs. Clay Shirky, a Web expert at New York University, calls it “an absorption process where the thing doing the absorbing changes.”

Can’t argue too much with that except to say that the implication that “vast stretches” will be comprised of *only* mainstream media is silly. It will be both mainstream and independent sites, sites competing with mainstream because they have the power of Web 2.0 companies aiding them. In the Web 2.0 world, it matter less that you have a major media company behind you, what matters is if your voice and point of view are considered valuable by your audience. The rest – who your publisher is, how you make money, etc. – is a choice, not a presumption.

The authors get this with their grace note:

The measure of success in that world is not a finished product. The winners will be those who host the very best conversations.

Bingo.

It’s worth a looksee. Lots of good stuff. I particularly like this part:

Now transpose people for web pages, and you see how the race for the next great search algorithm has less to do with organizing static HTML content than with coordinating the constantly changing expressions of millions of distributed people.

And this, which relates to FM:



The question is, then, whether a PeopleRank algorithm that uses community driven tags as its input, could do to About.com, Gawker Media, and Weblogs what Google did to Alta Vista, namely deliver a superior end-user experience that requires only incremental server bandwidth to scale.





Thanks, Fred.

And news of the site breaks, of course. Welcome to all those who may have heard about FMP from various blog postings. I’m very pleased that folks want to know more, and I am eager to say more, but for now, I am focused on financing. Once I have more news, I promise to break it here first.

I’ve gotten a lot of emails from interesting folks about joining the FMP network, or working with FMP in one way or another. That’s great, please keep it coming. Every time I correspond with someone about this idea I learn more. Thanks.

I’ll be heading out for a week starting today, so any of you who have stumbled upon this, or plan to in the next week, that’s why there will be no updates.

I’ve had a great week working on FMP, lots of wonderful support from bloggers and marketers and potential investors. When I return, it’s all FMP and Web 2.0. I’m excited….

Money is never easy to deal with, at least not for me. I’ve had a pretty uneven relationship with it (we got too big, too fast at the Standard, and were underfunded, at least for a while, at Wired), and have learned to distrust it, at least in large amounts. That’s why I’m trying to start this business with partners/investors who are more interested in the idea of the company, rather than the financial return. So far, I’ve been very lucky to attract the interest of a half dozen or so really cool companies who, well, get it. I’m steering clear of VCs, not because I don’t like them (I really respect most of the ones I know) but because at this stage, I don’t want the company to be under the pressure of returns that VC money usually entails.

But no matter what, when it comes to talking money, the return matters. Unless you have really wealthy, really lazy friends (and I don’t), getting money without strings is simply not going to happen. If this site is dark for a while, it’s because I am focusing my efforts on money for a bit – procuring just enough to get this thing started and developed, to pay good people well for their efforts, to get an office going, and the like.

But it’s never certain that the money will come, I surely don’t take it for granted. Once I have any news, I’ll post it here.

Rich Skrenta and Mark Fletcher are both uber geek entrepreneurs, both have successfully built Web 1.0 and Web 2.0 businesses. And both were willing to talk to me about FMP in the past day or so.

I got to explain FMP’s basic premise and my ideas about what needs to be built to both Rich and Mark, and then I got to hear what they think the most important hurdles are to building it. Clearly, the toughest part is going to be creating a scalable ad serving platform that is flexible enough to do what I – and all the sites I hope to partner with – need it to do. Both had great advice on the kind of person that would be ideal to partner with to do this. Senior level, certainly, someone who has built stuff like this in the past. And someone who understands user experience and interface issues. A very tall order. Any ideas, guys? Both laughed – they are hiring as well. Sigh. But for the right person, who wants to get in on the very ground floor of a startup…after all, Topix and Bloglines are now Establishment (wink).

I also had a chance to talk to Scott Rafer of Feedster, who is also hard at work building another Web 2.0 success story. We focused on ad model stuff, as Scott is thinking through various very interesting ideas about how to include advertising in Feedster’s significant inventory of RSS feeds. More on that later, over at Searchblog. I am truly lucky to have resources like these guys to talk to. Thanks to all three (and I am astounded how each had already found this not-ready-for-primetime site simply by monitoring keywords) and please, if you run across the perfect person, do send him or her my way….