Its a Blog eat Blog world out there (Big Blogdom's Strategic options)

Well now....a real hooha on TechMeme re Blog Networks raising VC money, started off by TechCrunch (as always )

More blogs are raising venture capital, we’re hearing from people they’ve pitched. Newcomer Silicon Alley Insider is looking for a $3 - $5 million round, if reports are correct. And PaidContent is pitching for a second round in that same range (PaidContent raised a round of “less than $1 million” in 2006). We’re also hearing that PaidContent is trying to sell the company for $15 million or more, and just bail out with some spending money.

There is of course the standard litany of denial of cash raising, being for sale, the amount etc etc as per usual in these things, for example here on PaidContent:

I can’t say this clearly enough: he is wrong on ALL counts. Let me elaborate:
-- We may raise some more money but it is nowhere in the range Mike reports.
-- We raised considerably less than a million in our first round from Greycroft partners...we didn’t disclose the round, but all we said was it was less than a million.
-- No, we are NOT looking to sell...not now, not in the near future.

But underneath the standard hoopla there is one fundamental strategic issue - they are all doing basically the same thing, ie reporting on the same limited pool of stories to the same fairly limited audience in much the same way. Add to that the issue that there are few real barriers to entry, and that many of the new entrants are "enthusiastic amateurs" - ie low cost, high quality and prolific - and you have a fairly textbook strategic problem - there is too much supply.

And even worse, modern search and aggregation makes it increasingly easy to find and rate that long tail....and tell all your friends too.

In other words, Mr Arrington's main thrust is right - there will be a consolidation, one way or another, at some point. When depends on how long people will work on a wing and a prayer to good times later. Whether it is his Harlem Blogtrotters model that will win is debatable, I think the model is more a last men who can hold onto the lifeboat.

No wonder there are calls for unionisation and other ways to raise the drawbridge to protect the current incumbents!

But, as any economist will tell you, this will hasten consolidation...........

Yes, 2008 is going to be a blog eat blog world out there

Update - Kara Swisher does a very good take on this....one might think she wasn't taking it all seriously