By Tom Stein
June 22, 2007
Om Malik likes to talk — and talk and talk. A tech journalist who worked for magazines such as Red Herring and Business 2.0, he often had more to say than his editors wanted to hear. So in 2001 he started posting his extra items on a homemade Web site called GigaOM. These included his opinions about new technologies, interviews with people he just had lunch with, and sometimes even personal tidbits about his struggling love life.
By the beginning of 2006, a funny thing had happened. His blog was generating 100,000 page views per month, and, what’s more, people were talking about GigaOM like it was actually a news outlet of some significance. By the middle of that year, his monthly page views had climbed to 350,000 and site traffic was growing at a frenzied pace.
He knew it was now or never if he wanted to turn his blog into a full-time business. “I had written about startups for so long,” he says. “I always wanted to see if I had the chops to build something of my own from scratch.” But leaving the security of his magazine job for an unknown future as a professional blogger was not an easy decision. Even his parents told him he’d be crazy to do it.
With a front-row seat to the Internet revolution, however, he’d seen nuttier ideas succeed. In the mid-1990s he witnessed News.com come out of nowhere and grow into a media giant. And more recently he watched as little-known blogs such as Gawker and TechCrunch morphed into flourishing online properties. “Their success gave me strength to go out and try something of my own,” he says.
Today GigaOM is one of the most popular blogs in the universe. It delivers news, analysis, and opinions on technology topics such as broadband, online games, and Web 2.0 to a monthly audience of 500,000 consumers and professionals. But Malik didn’t do it all on his own, at least when it came to financing. His first order of business was to raise nearly $1 million in venture capital from True Ventures.
Venture capital? Strange as it seems, VCs are actually throwing money at people dedicated to spilling their every thought. But why in the world would a blogger like Malik want to take outside capital, especially when he’s popular enough to attract readers and advertisers without anyone’s help?
Malik says he has larger ambitions that require resources beyond his own pockets. “This is not just a blog,” he says. “This is a media company.” He has used the money to hire a handful of writers and editors, as well as technical talent to make the site as slick and user-friendly as possible.
But growing his business without losing the personal appeal of the blog, which presumably is what attracted readers to GigaOM in the first place, may be a challenge. Malik says he’s not too worried because people come to his site for the news and information it provides, not just to read his personal viewpoints.
“The focus here is 80 percent original reporting and 20 percent opinions,” he says. “People want real information. They get tired of opinions quickly. You use that kind of opinion-style blogging as backfill for information, like what traditional news services do. What we are doing is analysis and original reporting, which means we actually go out and talk to people.”
Just like with any traditional media company, advertising accounts for the bulk of GigaOM’s revenue. But one lesson he learned the hard way is maintaining a Chinese wall between editorial and advertising. “Drawing a strict ethical line is really tough,” he admits. “As a journalist I was insulated from this issue, but now I’m on the firing line.”
Malik says he knows of some bloggers who will ease up on a story or give preferential treatment just to please an advertiser, but he’s not one of them. “I just have to remain hard-core about this, regardless of the consequences,” he says.
Instead of hiring an advertising sales team, Malik decided to outsource all his ad sales to Federated Media Publishing, a company that has built a substantial business by connecting high-quality advertisers with the Web’s most popular blogs.
Malik says he speaks with representatives from Federated Media at least once or twice a week to keep them up-to-date with his vision and what the company is working on next. He also meets with advertisers personally on an informal basis to educate them about his blog and offer his perspective on the tech industry.
Recent advertisers include brand names such as Microsoft, Hewlett-Packard, Intel, and Cingular. Malik won’t reveal how much money his company is making, but does say it’s growing 10 percent each month.
Advertising is not GigaOM’s only source of revenue. The company has expanded into the events business, recently attracting 250 readers to a one-day event in San Francisco on the future of television. “This is all about community building,” says Malik. “We see our events as a form of outreach that feeds back to the blog.”
So what’s the secret of GigaOM’s success? “It’s not rocket science,” says Malik. “We just try to give people the best information we can. If you have something valuable to say, your audience will reward you by coming back every day.”
Tom Stein has contributed to leading business and general interest publications including Wired Magazine, Business 2.0, Venture Capital Journal, and Tennis Magazine.