Good Newsweek article on the Huffington Post, including the fact that it now employs over 170 people, twenty of whom moderate comments. Is that the highest moderation ratio of any company on the planet?
But a closer look at HuffPoâ€™s financials shows just how tough that future is turning out to be. HuffPo has a big audience, but like most Web sites, it canâ€™t monetize it very well. Right now, HuffPo generates just over $1 per reader per year. Thatâ€™s nothing compared with the mainstream-media outlets that HuffPo hopes to displace. Cable-TV networks and print newspapers collect hundreds of dollars per year from each subscriber, and then generate hundreds of millions in ad revenue on top of that. The comparison isnâ€™t perfectâ€”TV and newspapers have higher fixed costs than Web sitesâ€”but it gives you a sense of how radically things are changing.
Yes, money is gushing out of old mediaâ€”nobody knows this better than NEWSWEEK, which is struggling financially and has been put up for sale by its parent, The Washington Post Companyâ€”and some of that money is flowing onto the Internet. But something strange happens to those ad dollars as they make the journey from old media to the Webâ€”somehow, by some weird, bad voodoo, those dollars turn into dimes. Or nickels. Or even pennies. A recent report by eMarketer, a leading researcher of Internet media, says online ad spending will grow more than 10 percent per year over the next few years, approaching $100 billion by 2014. That will still represent only 17 percent of all advertising spending.