Entrepreneurs are adopting a profit-making approach in a bid to turn personal musings on the internet into a lucrative business venture, writes Jim Colgan

"Everyone's drunk on the term 'blog'," says Jason Calacanis. He should know since he is embracing the hype surrounding this relatively new Web-publishing phenomenon himself.

However, unlike the millions of other enthusiastic bloggers happy to offer their services for free, Mr Calacanis is trying to make a business out of it. As chairman and co-founder of Weblogs Inc, a network of interactive sites, he predicts annual revenues in excess of $2 million (€1.62 million) in under three years.

The dotcom veteran is joining a number of like-minded entrepreneurs in a bid to turn blogging professional.

For most bloggers, money has never entered the equation, save to pay the monthly hosting fees. But the unexpected success of a few popular bloggers earning a living from ad sales caught the attention of the online community. Now, in a deliberate push to profit from these sites, businessmen such as Mr Calacanis and Nick Denton, another New York-based entrepreneur, are adopting a profit-making approach.

Essentially a collection of internet musings, blogs have become an alternative source of news and entertainment since the term first emerged seven years ago. Enamoured with the concept, Mr Denton and Mr Calacanis decided to build the content around targeted advertising.

Two years ago, Mr Denton set up the first of a handful of consumer titles under what he called Gawker Media. Mr Calacanis is still in his first few months of operation and has a current roster of 49, predominantly business-oriented, titles. He hopes to reach 100 within the year.

These efforts may pave the way for a new mode of profit-making content, analysts say, but both publishers admit it's too early for overly bold predictions.

"Do I think there's going to be a business in blogging?" Mr Calacanis asks. "Yes. Do I think it's going to happen this year in a major way? No. It's very early on."

It's hard to get an exact tally of the weblog population, but Technorati.com, a reputable tracking service currently indexes more than three million. A survey earlier this year by the Pew Internet and American Life Project said the number of Web users in the US authoring weblogs had grown from 2 per cent to 7 per cent in the past year.

Just as it is easy for any internet user to set up their own blog, few barriers exist for the profit-making company.

This is all part of weblogs' allure for a business, according to internet consultant Rick Bruner. "As much as any venture is viable, blogs are much more viable as they are much lighter on the expense column," says Mr Bruner, who publishes a website called Business Blog Consulting.

Apart from a writer's modest salary and the costs of limited office space, the outlays for these ventures are minuscule compared to a print publication. But weblog businesses are far from rivalling the profits of traditional media.

Mr Denton launched the first of what would become a network of blogs in 2002. Gizmodo featured regular postings on all things gadget-related, much like other blogs of the same topic. But where it differed was in its self-professed commercial status.

Mr Denton says his weblog coincided with the start of Google's text-based ad system. The search engine's AdSense service formed the first phase of the company's income with its unobtrusive, targeted advertising.

Another title followed in the form of a racy New York media gossip site, Gawker, and its success solidified Mr Denton's brand and paved the way for three additional titles.

With bigger banner ads from companies such as Nike and Audi, Gawker Media's second phase kicked-in six months ago.

"Major brand advertisers started discovering weblogs," Mr Denton says. These "cooler brands", he says, are eager to reach the 18- to 34-year-olds that TV networks are failing to reach.

Although Gawker's success has pioneered a top-down business approach, Mr Denton insists the hype of commercial blogs is overblown.

Analysts are quick to point out that most weblogs do not make money. In fact, the majority of weblogs consists of personal ramblings. And the traffic to Gawker sites is overshadowed by the more established online entities.

Mr Denton says a single title's daily visitorship of 50,000 pales in comparison to something such as the Drudge Report's eight million, referring to the news site that first broke the Monica Lewinsky sex scandal.

But businesses might profit from blogs in other ways, according to Mr Bruner. The familiar tone of a weblog is ideal for something like customer service, he says, not to mention as a vocal outlet for charismatic chief executives.

Still, there are individuals proving the monetary potential of independent blogging. Rafat Ali left a job with the now-defunct Silicon Alley Reporter to set up PaidContent.org, his own collection of blogs about the digital media business. He says people are drawn to weblogs more out of passion than cash but, with an income of $100,000, he adds: "I'm earning decent money, way more than I ever did as a journalist."

Mr Calacanis was the publisher of the Silicon Alley Reporter and says he got into blogging when the likes of Mr Ali left for the more lucrative outlet. Now he is a devotee of the weblog business, although his enthusiasm is often met with a sceptical response.

"If I said I was going to make a newsletter that made $2-$3 million a year, no one would question me," he says. "If I say it's a blog, everyone questions me."

Although Mr Calacanis is more effusive than his publishing rival, they claim to be good friends. But the two publishers crossed paths in a dispute over talent a few months ago. In a move that cooled relations with his rival, Mr Calacanis effectively poached the Gizmodo writer for his own gadget weblog. Mr Denton says he quickly replaced the job with a blogger from the non-commercial world and, if anything, it proved a point about the multitude of free blogs. Unpaid bloggers are effectively a farm for the growing number of professional sites.