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Bloglines Was Scared Off Advertising Strategy

Provocative post by
Jason Calacanis
on the Bloglines sale. He says it’s “a horrible business and it will
never make money.” The reason? He reckons “95-99% of the RSS reader market” will belong
to the Big 3 of Yahoo, Microsoft and Google within 2 years. That’s the ‘bigco will crush
littleco’ theory, which is an easy one to throw about (I’ve done it myself).

What’s really intriguing about Jason’s post is that he has some interesting inside
information about Bloglines’ touted contextual advertising strategy. Remember the
that broke back in mid-December when Mark Fletcher spoke to Jupiter Research
analyst Eric Peterson? At the time, very few bloggers linked to it or showed any interest
in what Bloglines was planning. But I wrote about it and soon
after Mark Fletcher himself
referenced my post (after first commenting on my earlier RSS market share post). Mark
wrote on 20 December:

“In another post, Richard MacManus points to a blog post by Jupiter Research analyst
Eric Peterson based on a conversation Eric and I had last week. Eric was interested in
the business model behind Bloglines. Not accepting my usual stock answer of “Volume!”, I
detailed that we will integrating highly targetted contextual advertising into Bloglines
next year, or “Adwords on Steroids” as Eric puts it (I like that description!). To
reiterate what I told Eric, when we do start to roll out advertising, we will be very
sensitive to user feedback, and we will be looking to our users to help guide us in this

With the benefit of hindsight, I’m wondering now if Mark was ‘testing the market’ with
his announcement that Bloglines would be doing contextual advertising in 2005? He
certainly got some swift (and passionate) responses from users – and the outlook wasn’t
good. Martin Schwimmer, a trademark lawyer, demanded that Bloglines remove
his RSS feed from their service and Bloglines quickly complied. The upshot of that case
was that although Schwimmer was mostly condemned in the blogosphere for his stance, the
fact remained he had highlighted a legal grey area – and Bloglines had backed down.

Now we find out that Jason Calacanis was also having a behind-the-scenes conversation
with Mark Fletcher. Here’s how Jason puts it in his latest post:

“…after a half dozen emails he [Mark Fletcher] finally got back to me to promise he
wouldn’t sell ads against our blogs. He claimed he was just speculating about
possibilities. OK, sure.

Of course, he did have to promise me because I—and the other blog publishers out
there—would never let him sell ads against our full-feeds, let alone target our

So there was a fairly blunt warning that weblogsinc for one would not have put up with
contextual adverts wrapped around their content in Bloglines. I suggested in my Web 2.0 weekly wrap-up last
week that “the Martin Schwimmer episode might have spooked Bloglines into abandoning
their contextual advertising strategy, in favour of quick bucks in the current
RSS/blogging investment frenzy”. So yes I think that Bloglines was scared off the
contextual adverts strategy, by Schwimmer and Calacanis (probably others too).

I also wonder whether it was a purposeful ‘leak’ by Mark to Eric Peterson back in
December, in order to get a gauge on how content producers would react to the advertising
idea. It certainly saved him time, money and a lot of grief – imagine if Bloglines had
rolled out the contextual adverts and only then found out that users were up in
arms about it.

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