The Economics of the Blogosphere

CNN Columnist Christine Boese publishes an article titled, "Welcome to the 'new' Web, same as the 'old' Web".

Some quotes from this article:

"...hang on to your hats boys and girls, because your experience of the World Wide Web is about to change, possibly for the first time since Mosaic, one of the first graphical browsers, was unleashed in 1993 from Champaign-Urbana, Illinois."

"Less wasted time and more efficient surfing might appeal to folks dealing with harassing pop-up windows and masses of spam. It helps to balance the signal-to-noise ratio back in our favor."

Interesting, Christine, but I'd argue that blogging and RSS aren't any different than other emerging technologies, especially those that are Internet-centric. Yes, they lower the bar of entry that must be overcome by content-providers (bloggers). However, isn't that the natural progression of any technology through maturation? For instance, just as blogging and RSS decreases the cost of entry for people wishing to make their message heard and connect with others, the web itself decreased the cost of entry for those wishing to make their message heard. RSS is clearly a value-creating paradigm, but it's not world-shaking.

Now, let us consider the second quote regarding the ad-free nature of blogging. Today, just as mentioned in the article, blogging and RSS feeds are nearly advertisement-free. Why is that? Well, RSS is still in early stages of adoption and the economics that govern the industry haven't yet formed into anything recognizable. A recent statistic showed that only 15% of Microsoft employees that read weblogs do so in an RSS aggregator. However, when the majority begins to understand the value of blogging/aggregation and RSS reaches critical mass adoption, opportunities begin to look lucrative and all changes. Consider:

Robert Scoble is getting serious traffic (according to him, 3000-4000 hits a day, work that out and you come to over 100,000 page views per month by tech-savvy people). The value proposition of advertising to such a savvy base of users with like mentality is large. And of course, what's the difference if one blog hosts one banner ad? However, it's the boiling frog theory personified (Throw a frog in a pot of boiling water and he jumps out; put him in cool water, slowly raise the heat, and you have a nice frog leg dinner.). As such Web-style economics develop and develop, the result is one heck of a popup-happy blogosphere that's nearly irreversible. Important note: I'm not saying Scoble is going to start advertising; he simply makes a great case study because the Scobleizer is a true heavy-weight blog.

I mean, I hate popup ads just as much as the next guy; I'm simply stating natural effects of capitalism as the market grows and the touchpoints of where best to drive revenue begin to develop. I'd be enthusiastically interested to hear any theories on why this pattern of commercialization won't play out in the blogosphere and family of RSS-compliant products.