Blogs to Riches

http://nymag.com/news/media/15967/ 

(This article contains a few instances of language that some may find objectionable.)

This article looks at the growth of blogging as a source of income through advertising, and examines the factors that lead to the differential success (in terms of advertising revenue generated) of blogs.  Blogging as a ‘job’ has very few barriers to entry – all you need is a computer connected to the internet, and hosting etc is basically free.  As such, it would seem that anyone could get on the bandwagon, and with enough resourcefulness and effort build a successful blog that got lots of hits and generated lots of revenue (the article cites one blogger charging advertisers on his site between $6 and $10 per 1000 views).  However, this doesn’t seem to be the case.  While it’s possible to build a successful blog that might bring in a comfortable income, building a blog that will make you a millionaire is all but impossible, and many bloggers find that no matter how hard they work, they simply cannot break through this ‘glass ceiling’.  Given the very democratic nature of this medium of communication, this phenomenon does seem surprising.  It turns out this ‘glass ceiling’ can be explained by network effects.  The structure of the blog network is such that there is a very small number of hugely successful blogs (the A-list), a larger number of moderately (but still much less) successful blogs (the B-list) and a huge base of also-rans (the C-list).  Essentially, the three lists follow a power law distribution.  The article claims that “Internet studies have found that inbound links are an 80 percent–accurate predictor of traffic”.  Therefore, the success of a blog, if number of page views translate directly to revenue, depends heavily on the number of inbound links.  The article goes into a little detail, but the main point is this:  “First-movers get a crucial leg up in this kind of power-law system.”  From there, popularity breeds popularity, and the situation is similar to the ‘rich get richer’ phenomenon.  According to the article, “this pattern is called “homeostasis”—the tendency of networked systems to become self-reinforcing.” As a final passing thought, the ‘blogosphere’ seems to lend itself to the first question on homework 4.  The blogs in this context are authorities, with many inbound links.  It would be interesting to investigate the notion of mutually reinforcing links versus a high in-degree in this context.  Do all the top blogs (that deal with the same subject matter) have mutually reinforcing links?  Or perhaps conversely, if we could determine that a collection of successful blogs simply had a high in-degree, would it then be possible to engineer a way to construct a set of mutually reinforcing nodes, that might then sway the balance of the authority score, since the odds would be k² to n in our favor?  The discussion in class and in the homework on valuing advertising space would also be applicable for successful blogs, especially since, at least for now, they charge per view instead of per click.