Get out your hankies. It’s true, Valleywag, the premier Silicon Valley gossip site, is going under. Well, not exactly going under but it’s cutting some staff and getting folded into Gawker Media’s larger gossip site, Gawker.
The reasoning is pretty simple, as Nick Denton explains in his lovely blog post about “sleepwalking into economic extinction.” Cut cost or a decline in ad revenue will mean the death of every living thing on planet earth. It’s recession 2.0, who wants to out gloom Nick Denton?
Actually, you may not need to. One of the fun things about Gawker Media is that they publish their traffic stats. Apparently, Valleywag has been over 3 million page views a month for most of the year (topping 6 million in May). You don’t need to be a CFO to calculate some modest CPM revenue with that kind of traffic. It’s common knowledge that Gawker pays their writers absolute crap (trust me, I once interviewed for a job at Gizmodo) and hosting blog content isn’t exactly the same overhead as YouTube. So why the hell would Denton fold this into Gawker and throw all that traffic out the door (assuming Valleywag readers aren’t loyal to Owen Thomas)?
The short answer is that I don’t know. For some other projects I’m working on, I’ve been reading about ad revenue models until my eyes bleed and I don’t understand how Valleywag can have the overhead that Denton outlines in his doomsday graphs. I don’t think he’s lying, I just don’t totally get it.
I do know that if he can effectively merge Valleywag’s audience with Gawker’s audience that he will have a much stronger Web property in the long run. While Gawker has readers from all over, it’s still essentially a New York media blog. Conversely, outside of maybe the big tech and political blogs, there is no blog property that resonates with Silicon Valley like Valleywag. If you see San Francisco as an emerging media market due to the obvious shift online, merging Valleywag into Gawker gives Denton a Web property that reaches both the current center of the media universe and the potential future of the media universe. The audience reading the next generation of Gawker could be more influential in major media purchasing decisions than anyone reading Ad Week, Advertising Age or any of the old guard.
So whether or not this is a gamble or a necessity remains to be seen. However, if Morgan Stanley’s numbers in Denton’s post are accurate, seeing online ad growth shrink from 16% to 6% still doesn’t make online publishing a bad place to be for the next couple years.