I am scared. Amid all the media layoffs we’ve seen this quarter, the two most troubling ones happened in the last week: Radar magazine folded and sold its Web domain to AMI (to be re-branded as a celebrity site), and Portfolio scaled back and basically gutted its Web staff.
Why do I single out these two smallish, New York-centric publications? Because Radar and Portfolio had kick-ass Web sites. Good writers, smart design, lots of breaking exclusives, and a trustworthy reputation that led other sites to link to them and drive in quality traffic. They did everything right. And from what I understand, they drew big numbers from demographics that ought to have appealed to advertisers. The fact that neither Radar Online nor Porfolio.com was sustainable totally crushes the idea that media companies can succeed by publishing content for free online.
But online journalism makes so much sense! It’s cheap and easy to do! There’s an obvious, and growing, demand for it! And even if it loses money now, online advertising will save us! It just needs a couple of years to catch up.
That was my die-hard belief until I read a very persuasive post by Henry Boldget on Silicon Alley Insider: Let’s Be Serious: Online Display Ads Will Fall Sharply In 2009.
I have been chewing on that idea over the last few days as I’ve watched one publisher after another slash their editorial staffs. While print staffs are getting hit hardest, online staffs are not protected by some halo of future projections. They’re getting axed, too.
What if everything we think we know about online advertising is wrong? What if we’ve deluded ourselves into thinking that just because something is fun and useful, it also must be a good business? What if this is as good as it gets?