ChasNote

The IAB reports that ad spending in each of the first three quarters in 2007 has broken records, with Q3 up 25% to $5.2 billion. See ZDNet.

According to Douglas McIntire at 24/7 Wall St, that’s what’s coming, the only remaining question is when.

“…with the internet operations at newspapers and some other tradition media companies making very little headway, the big blogs take on a very significant attraction. They reach audiences in great numbers. They have credibility. They are not expensive to run. And, they make money.

“Take Huffington. According to research firm Compete, it has an audience almost as large as the online version of the Philadelphia Inquirer. As a part of a larger newspaper organization like The New York Times (NYT) or Washington Post (WPO), that audience could probably be much bigger. NYT and WPO need a Huffington or two. Their internet revenues are under 10% of their total and not growing fast enough to keep up with falling print sales. Huffington has raised $10 million in VC money. What is it worth? $100 million. Maybe more. Worth it for The Times or The Post. With the trouble that are in, yes.

“The big tech blogs are even larger than Huffington.”

The theory makes sense, up to a point. Audiences are moving online and advertisers, inevitably, are following them. If traditional publishers and portals can’t keep pace with the independent sites on the audience-growth front, acquisition is the likely strategy. The hard part, though, as McIntire points out is maintaining (and growing) the value of those acquisitions:

“The problem for the potential buyers is keeping the talent at the blog sites.”

It’s a problem that needs to be solved on both sides, the buyer and the seller. If the value of an independent media brand is only that of its front man or woman, the deal terms are bound to penalize him or her for leaving — some kind of long-term lock up that may not be appealing to a site’s author. The independent authors and publishers may want to change this formula. And if a potential acquirer can’t find a way to encourage a site’s author to continue to build relationships with a growing audience of readers over the long term, how will the acquisition premium ever justify itself? Acquiring entities may need a new approach, a model by which they pull top content-creators into the fold, but do so loosely enough that the content-creators can enjoy the freedom and decision-making authority they do right now.

For those of you who missed yesterday’s coverage by every site I can think of, here’s the official press release on Boing Boing’s redesign, including comments and a new gadgets site edited by Joel Johnson (former editor of Gizmodo).

Some of that coverage: CNET, CrunchGear, FM’s Andre Torrez, Mashable, SF Chron…..

Thanks, HP for sponsoring the new comments feature, and Jawbone for sponsoring the launch of the gadgets site!

Excerpt from today’s NY Times:

Online advertising in the United States is expected to increase 28.5 percent this year, according to eMarketer, a research firm. AOL’s ad revenue increased 16 percent in the last quarter after gaining 40 percent in the previous quarter. Revenue at Yahoo, the No. 1 Internet portal, rose 8 percent in the latest quarter.

Part of the challenge for portals is that people are starting to approach the Internet in a different way. A new generation of Web users has grown increasingly adept at finding what it wants online and is less reliant on portals for guidance. What is more, younger audiences are spending more time on social networking sites and less time on traditional Internet portals.

“Just like Yahoo, AOL is fighting MySpace, Facebook and others for audience and ad dollars, and those are tough competitors,” said Jordan Rohan, an analyst with RBC Capital Markets.

Social networking sites are not the only culprits. Thousands of smaller Web sites, like blogs, news collectors and niche content sites, are also attracting growing numbers of Internet users and advertisers.

Steven Finch at Crenk speculates that advertising on FM sites leads to healthy B Round investments:

“KickApps have recently been advertising on some of the worlds largest technology blogs such as Gigaom, Mashable and Read/Write Web, this i think was done through Federated Media and it seems to have grab some attention. It has been reported by Mashable that the social network builder has raised a large $11 million Series B round.”

Well, it’s true that KickApps advertises on those sites, and it’s true that tech investors, VCs and bankers read those sites, but I’m not sure I’d make such a direct connection between their ad campaign and the $11 million infusion.  But, hey, the campaign probably didn’t hurt their fundraising efforts!  Thanks for the kind speculation, Steven.

According to TechCrunch, Glam is raising another $200 million, and expects to generate $21 million in 2007 revenue.

“But the company is driving that revenue by selling ads for partner websites, not on their own page views. A minimal amount of research into their business shows that the company is an ad network, not a content site.”

From CNET:

“The largest software company is hosting its Financial Analysts Day at its Redmond, Wash., headquarters, where Ballmer described Microsoft’s strategy as making several big bets on emerging businesses while drawing more revenue from its mature desktop and server software franchises….. ‘We are hell-bent and determined to allocate the talent, the resources, the money, the innovation to absolutely become a powerhouse in the ad business,’ Ballmer said.”

FM’s Conversational Marketing Summit is offering early-bird discounts, register here. The speaker roster is filling out, too:

Jay Adelson; CEO, Digg.com.
Heather Armstrong; Founder, Dooce.
Jon Armstrong; Founder, Dooce.
Paul Beck; Senior Partner, Ogilvy.
Barak Berkowitz; CEO, Six Apart.
Matt Cohler; VP Strategy, Facebook.
Laura Desmond; CEO, Starcom MediaVest Group/The Americas.
Scott Donaton; Publisher, AdAge.
Sarah Fay; President, Isobar US.
Shawn Gold; SVP Marketing & Content, MySpace.com.
David Grubb; Worldwide Media Director; Microsoft.
Curt Hecht; EVP, Chief Digital Officer, Starcom MediaVest Group.
Carla Hendra; Co-CEO, Ogilvy North America.
Casey Jones; VP Marketing, Dell.
Patrick Keane; EVP, CMO, CBS Interactive.
David Lawee; VP Marketing, Google.
Ross Levinsohn; Former President, Fox Interactive Media.
Daina Middleton; Dir, Global Interactive Marketing , Imaging and Printing Group, HP.
Jon Miller; Former Chairman & CEO, AOL Inc.
Kent Nichols; Writer, Performer, Beatbox Giant Productions.
Greg Ott; VP, Global Marketing, Ask.com.
Randall Rothenberg; President & CEO, Interactive Advertising Bureau.
Suzie Reider; Head of Advertising Sales, Youtube.
Douglas Sarine; Writer, Performer, Beatbox Giant Productions.
Tina Sharkey; Chairman and Global President, BabyCenter, LLC.
Suhaila Suhimi-Waldner; East Coast Director, Digital, OMD.
Rishad Tobaccowala; CEO, Denuo.
Johnny Vulkan; Founder, Anomaly.
Jeff Weiner; EVP, Network Division, Yahoo!

Kevin Rose announced big news for Digg: They’ve signed up Microsoft to sell their banners and text-link sponsorships. (FM will keep doing what we’ve been doing — the integrated sponsorships, custom programs and conversational marketing.) From Kevin’s post:

“We’ve signed on Microsoft as our new partner to sell and serve the ads on Digg. It’s a deal similar to the one Facebook signed with Microsoft last year. This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg’s growth. Best of all, it lets the Digg team completely focus on new feature development. Federated Media, which has been an awesome partner for the last year and a half, will continue working with Digg focusing on integrated sponsorships and custom programs like the Arc project in labs.”

Here’s Battelle’s comment at FM’s blog:

“Today our partner Digg and our new partner Microsoft announced a deal to work together on advertising across Digg’s burgeoning site. At FM, we’re proud of our partners, and particularly proud when we’ve helped prove their businesses’ value. It’s no secret that Digg is the kind of property - like Facebook - that was bound to get the attention of the Big Guys as they continue to play an ever more fascinating game of Internet chess. That’s why I’m even more pleased that FM is continuing to work with Digg and with Microsoft to further Digg’s goals.”

And here’s the official press release from Microsoft, including news that FM and Microsoft will be collaborating around conversational marketing stuff:

“Microsoft and Federated Media Publishing, Digg’s current advertising partner, plan to collaborate to bring integrated programs to Digg’s users and advertisers. ‘Federated Media has unique advertising sales assets that dovetail with our efforts, and we look forward to working with them,’ Berkowitz said. [Steve Berkowitz is Microsoft’s SVP for the Online Services Group, ed.]”

Congrats, all around!

Here’s the press release. Reuters says the deal is $275MM in cash.