Arrington's warning to bloggers, and why he's right.

Michael Arrington at TechCrunch has a fantastic rant up about the influx of VC to "blog networks" and the recent (well, 2 years recent) tendency of bloggers to be looking for the VC infusion smoothie or to get in on the big networks.

This comes at a time when people ask me "how do you plan on making money with this thing?" and "where are the ads?" They assume I want to get into an ad network or get someone to invest in my writing looking for a return, they assume that is the way I see a payoff for my efforts.

They're wrong. On the other hand, Michael has it right:

So what's the point of this rant? Well, all this money flowing into the blogosphere is disrupting the complicated and emotional, but also stable way things are done. Bloggers with money and employees and health care programs and boards of directors and shareholders have to play politics with a whole new group of people, splitting them away from what they do best - Fighting the Blog War. Their behavior can become erratic as they have to decide to tone down their writing to get a certain type of sponsor on board, which in turn lets them make payroll. Investors want to see growth, so more and more blogs are launched, but perhaps without the right talent to grow it into a long term business.

In short, I believe the money is being, for the most part, wasted.

If a VC hands you a check, their intention is not to hang around for 20 years while you build a nice lifestyle business for yourself. What they want to see is an exit, preferably a 10x or higher exit, within 3-4 years. But something tells me that few of these networks are going to be able to grow quite as easily as they think and reach those liquidity events. The talent is, increasingly, locked up. Even when new talent is discovered or trained, every niche has serious heavyweights already there with page views and advertising dollars to back them up for a long fight.

I'm just going to print out his post and carry a laminated copy with me to show people next time I get asked "the question" and keep the URL handy to forward and pass around.

His (quite timely) point is that there are things that are worth investing in over the long term, by putting in time to develop relationships, content, style, etc, and then there are the "bubble" investments, where some believe that throwing Other People's Money and advertising around is the solution.

Last week I sat in on a panel where Robert Scoble  (correctly) pointed out that he doesn't run ads (except for his book) because the truth is, good content is king. Arrington takes this a step further and explains why he's been shying away from Other People's Money:

What I'd like to see, and even be a part of, is the blogger equivalent to the 1992 U.S. Mens Basketball Dream Team. That team could take CNET apart in a year, hire the best of the survivors there, and then move on to bigger prey.

Just the thought of being a part of something like that has held us back from raising any outside capital at all. I believe we have the beginning of a team that can play a role in this new Dream Team.

He's so right I can't even begin to get at it. I've been trying to explain it to friends, to family, to people I meet at conferences, and this guy just nails it.

I'd be happy to be the last guy off the bench on that Dream Team, because the content would blow the current "A-List" paid networks out of the water.

Content is king. Bubbles burst.

Well said, Michael.