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    How PaidContent Succeeded in Mining Digital Media Niche

    by Mark Glaser
    July 14, 2008

    i-ad2ef5661a0560915f5de9e2610ab973-Rafat Ali.jpg
    Rafat Ali

    Why is this man smiling? Rafat Ali was just another freelance journalist back in 2002, and wanted to strut his stuff on a blog, so he started PaidContent to write about his take on the business of digital content. Now he is much richer for his efforts, having expanded the blog into a mini-media empire with venture funding and last week selling it entirely to Guardian Media Group for about $30 million.

    I have been watching Ali and his site closely over the years, and I will not join the guessing game of which independent tech-related blog will be bought out next (TechCrunch? GigaOm? VentureBeat?). I think Ali has created a unique site in PaidContent that mixed his no-holds-barred commentary with hard-nosed reporting to scoop the business press and give insiders his own personal insights.

    There have been times where Ali’s opinions can come off as a bit sharp and almost one-liners in the brief space of a blog post. And recently, the cross-promotion for PaidContent’s sister blogs, events and conferences, and other side businesses have almost overwhelmed the “real news” on the site. But those criticisms aside, I think PaidContent has been a pioneer in the field of online media and has been a case study in how one person can build a sustainable niche site. Here is how he did it:

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    Reporting around the clock.

    Ali often worked late into the night and around the clock to beat mainstream business publications that were wedded to print or broadcast and held stories longer.

    Knowing when to bring in reporters.

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    As Ali’s workload increased and the audience got bigger, he was smart enough to hire experienced journalists such as Staci Kramer, David Kaplan and Robert Andrews. Rather than treat the site as a blog where opinion comes first (a la TechCrunch), PaidContent stuck to its newsy angle of breaking news and getting interviews and quotes.

    Knowing when to bring in business folks.

    When Ali realized that he was seriously conflicted when trying to sell advertising and write editorial at the same time, he wisely started to separate those functions just as a traditional media company would. He even created an ethical credo of sorts titled, Our Essence of Being, with this important line:

    I do think the society needs journalists, or at least the journalism ethos: people who can ask the hard questions, people who can be skeptical about any new thing, and yet question the old establishment’s willingness (or lack of it) to change.

    Pushing boundaries in online ads.

    PaidContent was one of the first publications to run ads in RSS feeds, and also ran “sponsored posts” that looked like blog posts but were clearly marked as ads. Despite these blurry lines in advertising and editorial, PaidContent never pulled punches in covering the business of its advertisers.

    Making advertisers part of the community.

    This might be the unsung strength of PaidContent. Rather than simply accept ads from any company or product, or join a generic ad network or federation, PaidContent handles the bulk of its ad sales and is more selective about making sure the ads are relevant to the content. I remember talking to Ali about this, and he felt that the advertisers had to be as much a part of his community as his readers and tipsters.

    Keeping its focus, and expanding in a smart way.

    As PaidContent morphed into the parent company of ContentNext, Ali launched sister blogs MocoNews (mobile news), ContentSutra (online media in India) and PaidContent UK. He started mixers and events that were heavy on networking and serving his community of readers than on flash and commercialism. Rather than grow too fast and get too big, ContentNext grew much more gradually and thought more about moves before making them. Plus, it always stayed focused on the business of digital media, and didn’t stray from covering that industry.

    Getting credit for blogs.

    After making his complaints almost a crown of thorns he bore daily, Ali finally got mainstream media outlets to start giving him credit for stories he broke on PaidContent. Not only that, but he got NYTimes.com — and later Washingtonpost.com — to run his content in a licensing/promotional deal.

    Hopefully the Guardian will allow Ali and his online innovators to expland and cover more territory — and keep their credo intact. The media world needs more examples like PaidContent to point to as possible ways to keep journalism alive and well in the digital age.

    What do you think? What ways do you think PaidContent has innovated and where have they missed the mark? Do you think they will be able to fend off competitors such as Silicon Alley Insider and TechCrunch, and how do you think they will work within the Guardian? Share your thoughts in the comments below.

    Photo of Rafat Ali by Lane Hartwell for Valleywag.

    Tagged: journalism magazine new media weblog
    • Rafat Ali did so many things right with PaidContent that it’s hard to discern what he didn’t. One big innovation was “taking it to the streets” so to say, in networking events and mixers. I’m sure he realized that online community has to have a f2f component if it is going to cohere–and if you’re going to create loyalty. Extending that idea out to advertisers–as in making them part of the community–also, I’m sure, went a long way.

      For all the lip-service that’s being given to the concept of “community” and how orgs can do it online, there’s little talk of how to transcend the ephemeral state of online into real life–and that it’s important. Ali did that with PaidContent, and it more than likely helped his site greatly. Now, can Guardian follow through with this, keep and expand a loyal following? They can try. But they are a big corporation, so the notion of community, in the way that Ali built it for PaidContent, may not be attainable.

      But if there’s anyone who might be able to come up with an idea how to do it, it just might be Rafat Ali.

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