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Find The Boots

Rantings from a few corporate types about life, technology, travel, guns, politics, and everything good in the world.


Tuesday, June 26, 2007

I've seen the google ad for Hellium pop up on our pages quite a bit. We write about blogging, so they must of bought those keywords. I'm prevented from clicking my own ads according to Google's TOS, so I did an internet search on "Hellium" to find them. It took a while, but I eventually ended up on the Helium Home Page.

Here's how it works according to the cursory glance I've taken: Members write articles on a variety of topics. Members vote on each others articles, bubbling the good ones to the top. The best articles will get traffic from the mother ship, which generates advertising revenue, which they then split with the members. It's blogging for cash.

If there was any doubt whether we're in a Web 2.0 Bubble, this should remove all concerns. A quick look at their "About" page and "Team Hellium" show a venture funded startup -- lots of smiling faces with a VC as the chairman of the board.

The problem in the first dot-com bubble was that a lot of companies that should have been started in some geek's basement received $10M in VC money. The VCs and "experienced" CEOs bring their own baggage, which is usually enough to suffocate the startup. If a web startup is a good idea, it shouldn't have any trouble catching on without the infusion of tons of cash. Just about everything on the web can be outsourced and purchased as needed - bandwidth, servers, advertising, etc. Pumping in millions just goes to senior management's expense accounts, extravagant company meetings, and ill advised advertising campaigns.

I think they have a workable business model, with one flaw. The entire scheme relies upon advertising at a time that most bloggers are figuring out that ads don't pay very much. The idea of enlisting content writers and paying them commissions is novel, but if the content providers are only starting out with 50% of the revenue and revenue from ads continues to decline, it will be tough for them to keep the merry-go-round running. Roberrific had a problem with the experiment he did with them. $23.89 for 58 articles doesn't sound like something I'd quit my job for. Perusing their forums tells a similar story: their most online ever was 214 on May 23, 2007. That's just not a large enough community to get anything done. Next to the Jericho community, they're tiny. And the Jericho folks weren't trying to make money.

For the blogger, the question is whether it makes sense to take a 50% cut in revenue in order to have a chance at better exposure through their community. The alternative is to build up your own content and not rely upon a third party to monetize it. If Helium ever goes the way of Flooz.com, their content will be lost.

It's going to be interesting to watch, but I don't think that Web 2.0 is about selling more advertising. Just like TV, advertising supported content is going to be in decline on the web over the next decade.


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