Is the Gawker-Yahoo Deal Important?

Gawker, a blog network similar to Weblogs, Inc., and Yahoo announced a syndication deal today that brings Gawker content to Yahoo News. Content from the largest Gawker blogs is already included - Wonkette, Gizmodo, Defamer, Lifehacker, and Gawker itself. More may be coming.

The financial terms are undisclosed, but here’s what is now on Yahoo: Gawker brands and content are pushed throughout the news home page. Clicking on associated content pulls up a Yahoo page with the Gawker content (example). It does NOT redirect to Gawker.

There is a single link to Gawker on the content page (clicking on the brand name). Otherwise, it’s an all-Yahoo experience. If I was doing the deal, I’d expect a revenue split in Yahoo’s favor on ad revenue generated from the page. Gawker gets that revenue, the branding, and some links directly to the blog. This is purely speculation, but my best guess.

Is this an important deal? Yes, in that it shows Yahoo embracing blog content. The guy at Yahoo to get to know is clearly Scott Moore, named by Wired in their last print edition as VP Content Operations. Scott is hiring bloggers (such as Kevin Sites) and doing these kinds of deals with Gawker. These are smart deals for Yahoo - they generate page views where they can put lots of ads. If the deals are revenue share, then it’s a no lose proposition for Yahoo.

But what Yahoo is noticeably not doing is acquiring Gawker, like AOL did with Weblogs, Inc. That means liquidity events for bloggers are limited - the GYMs (Google-Yahoo-Microsoft) are not yet in content buying moods.

So perhaps the networks and very large blogs can cut deals to increase page views on content and generate revenue. Will this model work for the long or medium tail of blog content? My guess is no…the GYMs will want to control quality and that doesn’t scale with more than a small number of blogs. But certainly we’ll see more deals like this, particularly as long as the advertising market is strong and demand for inventory is outstripping supply. The portals need content, and this is a cheap way to get it.

A lot of people are focusing on the fact that the deal is incorporating blog content directly into Yahoo news results. While I find this interesting, we’ve already seen Yahoo experiment with this with their blog search product. Clearly Yahoo is defining the definition of news to include blogs (as they should), and I applaud this.

But back to the title of this post. Is it an interesting deal? Yes, but mostly because of what the deal isn’t - it isn’t an aquisition of Gawker.

Read more analysis of the deal at Read/Write Web, Paid Content and Memeorandum.

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This entry was posted on Wednesday, November 16th, 2005 at 8:29 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.