Is Glam A Sham?

Trackbacks/Pings (Trackback URL)

1. Robert Dewey
   

   August 12th, 2007 at 4:12 pm

   All I can say is insane…

   What the hell could they possibly need $200M from a private round for? If they really are that valuable, why not try the IPO route?

2. Andray
   

   August 12th, 2007 at 4:29 pm

   That exactly is the problem. They are very much aware of the construct and would be never able to get to IPO. Sophisticated trap for the investors, who are late comers to the 2.0 bubble.

3. Glen Allsopp
   

   August 12th, 2007 at 4:37 pm

   You expect a company to tell the truth! :O

   Seriously though I’m not surprised, what the hell do they need $200m for anyway?

4. B S meter
   

   August 12th, 2007 at 4:40 pm

   You’re spot on Mike… Glam is an advertising network and not a destination site.

   My observations about glam…

   They are an ad network for a lot of blogs. The blog sites that have partnered with Glam, have way too much advertising on them.. sort of a turn off.

   the Seo techniques they use are similar to squidoo and boxxet. On their site they send link love and page rank for member blogs posts so they rank higher in google…. so these advertising laden blog partners generate more revenue

5. Robert Seidman
   

   August 12th, 2007 at 4:42 pm

   Yikes. Et tu Tim Draper?

6. Aaron
   

   August 12th, 2007 at 4:43 pm

   I almost joined the ranks of a top-flight blog advertising network til I got cold feet over the contract terms. Their literature claimed millions+ in monthly uniques, but it was calculated in the same manner as that described above (re: it had only a few mega-hits to its name that accounted for nearly all the millions+ in hits).

   That deserved mention. Because it’s one thing to blog for a site that publishes to a base of 1 or 2 million well-targeted visitors. It means another thing entirely to be associtated with a network where only a few sites bring home the bacon, and where its main page (the page that will link you) represents a disproportionately small number of total visits.

   Anyway, $200M is just silly. Really… come on, guys.

   Good reporting Mike.

7. bt slader
   

   August 12th, 2007 at 4:45 pm

   heck — I’d be personally going orbital with $200k, nevermind the capital M.

   Perception is reality — they are talking the talk.

8. Glanton
   

   August 12th, 2007 at 4:48 pm

   MyYearbook, who represents half of Glam’s traffic, also advertises all over the place, which inflates their unique numbers on Comscore.

   By the way, that’s LOSSES of $3.7 million this year, not profits.

   Bottom line is that Glam is a money-losing advertising network with about $20 million in revenue, that isn’t even particularly focused on “glamor” or women given the fact that half of its traffic comes from a shady-looking social networking site geared towards high schoolers.

9. Michael Arrington
   

   August 12th, 2007 at 4:57 pm

   Glanton - you’re right. my bad. good catch.

10. sp
    

    August 12th, 2007 at 5:04 pm

    @michael

    You make a good point. However, they can claim their total pageviews however they want. It is Glam’s responsibility to provide accurate data in an easy to analyze format and it is the investors responsibility to review, analyze, and break down that data to make a decision to invest, so investors should probably tread carefully.

11. EH
    

    August 12th, 2007 at 5:19 pm

    It’s certainly possible that they’re shopping placement only to customers who don’t know to ask that the numbers be broken out in a way that tells the truth. That is, it’s a gambit.

12. Jon
    

    August 12th, 2007 at 5:26 pm

    Hopefully these investors are looking beyond the sales prospectus before putting in some cash into this (or any other company). I don’t understand this push for sales as the cost of profits… I would prefer a small company making profits then a big one producing nothing but losses.

    Jon

13. Michael
    

    August 12th, 2007 at 5:30 pm

    Glanton: the real bottom line is *if* Glam can execute $150.4m revenue in 2008 with positive EBITDA and highly increasing growth.

    Then whether they are a “content site” or an “advertising network” is largely irrelevant. Investors wouldn’t care.

    Show me the money; the rest is semantics.

14. GOOD JOB
    

    August 12th, 2007 at 5:42 pm

    Great Job Michael,

    Please expose these kinds of cheaters time by time so good guys get funding.

15. Glanton
    

    August 12th, 2007 at 5:48 pm

    @Michael - the fact that they are an advertising network makes it much less likely that incremental revenue will get to the bottom line. The fact that they are an advertising network as opposed to a content site/network also makes the “growth” that is their main selling point largely irrelevant, at least compared to if they were a destination website.

    What has Glam proven so far? That they can generate $20 million in revenue as an ad network at a -15% net margin? There are numerous advertising networks out there in the same boat, and they’d probably be happy to sell for anywhere in the 8 figures.

    I do admire the balls on these guys though…

16. patricia
    

    August 12th, 2007 at 6:03 pm

    I think the overall feeling on glam has always been a sham from the get go. At least that’s the mindset that I’ve seen/heard from the fashion industry. The tech industry might be another story.

    Glam’s always been very forthcoming, in my experience, with it calling itself an ad network, but I think it’s potentially a good example of how analytics suck, how they can be manipulated to make a site look bigger than it is and I wouldn’t be surprised if we all found out later that lots of big social networks actually don’t have that the traffic we all thought.

    I look forward to this because the mindset in the market is that every site is going to have Facebook level numbers and it is ridiculous. That’s like saying all print media you see on stands right now will have circulation numbers like Business Week or Time. It just isn’t reality, and more importantly, it shows the sort of ignorance that’s taking place within the current internet market, which makes everything harder.

17. LonelyBloggers
    

    August 12th, 2007 at 6:17 pm

    I’ve often worked with previous startups whereby they buy or exchange traffic with other networks to bump up their traffic statistics to show off to “the money people” that fund them, which evntually leads to getting more money, but in reality the picture is very different behind the scenes.

    I guess one good thing is that today overall website measurement is a lot better now than say in the last .com boom and bust, whereby if you do some research you can spot this type of traffic reporting behaviour pretty quickly.

    Glam looks to be getting ‘questionable traffic’ from numerous unqualified sources, the most troubling issue is that they even have the balls to ask for that amount of funding. Their in-house reach/audience numbers are “way out of whack” and I would immediately question the actual quality of that traffic they’re touting…

    Something is definitely not right, it’s to the point of being very dishonest and I would be VERY suprised if they got funding to anything close of that scale. Glam - You’re a SCAM, nice post TC -$200 million? Come on….

18. jiminy cricket
    

    August 12th, 2007 at 6:20 pm

    I’m curious - why on earth is Tim Draper lending his name to the document and company (as a director)?

19. Anon
    

    August 12th, 2007 at 6:24 pm

    As an early member of the Glam network with a day job in online media, I’ve noticed the ComScore number discrepancies early on and knew it was only a matter of time until it was publicly outed (there has been some chatter online in the past, but nothing like a fat post on TC). My sites and all the others are all under their umbrella in ComScore adding to their totals.

    Frankly I don’t see why there would be any shame in being a large, semi-targeted ad network provided the business is healthy and growing. I really don’t understand why they’re so insistent on calling themselves a destination site! Anyone could foresee that it just sets them up for an outing like Arrington just posted, and a bad review on TC can’t possibly be a good thing when looking for $200MM.

20. Ben
    

    August 12th, 2007 at 6:38 pm

    Props to Mike for this post. This sort of hard-hitting journalism is where bloggers far outperform mainstream journalists, who often uncritically regurgitate the data in press releases and fail to expose clear idiocy like Glam’s claims. This sort of radical transparency is what the blogosphere is all about, and may have just saved investors a couple hundred million.

21. Miller
    

    August 12th, 2007 at 6:42 pm

    I have suspicion that some of their partner sites are driving uniques with very deceptive marketing, namely spy-ware pop-ups. This experiment with done a limited number of machines w/ on a few spy-ware installs:
    http://www.benedelman.org/news/050707-1.html

22. Jono
    

    August 12th, 2007 at 6:46 pm

    Now thats GOOOOOOD investigative reporting!

23. beng
    

    August 12th, 2007 at 6:58 pm

    Michael, you should do a follow up story on the 70 person weekend startup stunt, they were going to “do it all in 1 weekend”, the site still says coming soon, over a month later…

24. beng
    

    August 12th, 2007 at 6:58 pm

    http://www.vosnap.com/

25. Nik Bonaddio
    

    August 12th, 2007 at 7:09 pm

    How is this NOT a sham? Just look at the Alexa stats..

    http://www.alexa.com/data/deta.....e-live.com

26. joe_r
    

    August 12th, 2007 at 7:14 pm

    Just curious, but isn’t Mike an investor/friend of PopSugar which could be considered a competitor?

27. Preston
    

    August 12th, 2007 at 7:23 pm

    This is excellent analysis, but I wish you would have hammered into comScore more. True story: I was invited into an advertising network where the umbrella company would provide quality advertising and some javascript to put on my blog. They asked for my traffic stats, etc. I had it running on the website and then they sent me a comScore form that needed to be faxed to them immediately to continue in the ad network.

    What was the comScore form? It was an assignment of traffic. You assign your traffic numbers to the advertising partner, and I didn’t realize it at the time, but this seems to be the reason for doing it. You claim an enormous amount of growth, but you do nothing to get it!!

    Here’s the clincher - if you haggle with comScore, they will allow the blogger to “assign” traffic numbers to more than one company. It’s sheer madness right now.

28. LolGlam
    

    August 12th, 2007 at 7:34 pm

    oh hai nvestrs!

    i has komskor numbrs, i can has 200 mln dolrz?

    k thx bai!

29. Michael Stone
    

    August 12th, 2007 at 7:39 pm

    This company is a joke and Allen & Co. isn’t far behind. Does ANYONE actually believe that they can go from $21M to $150M in one year? They would need to be at or near $10M (this very month) in order to reach these numbers in 2008. What idiotic VC is going to invest in this sham? Someone needs to come clean here.

30. LiquidBoy
    

    August 12th, 2007 at 7:57 pm

    it would be great to get their side of the story!

31. Richard
    

    August 12th, 2007 at 8:17 pm

    Interesting to note, iVillage does much of the same thing - I know they “own” a slew of site on ComScore, some of which they don’t advertise on at all.

32. Wayt
    

    August 12th, 2007 at 8:30 pm

    Amazing journalism here by Arrington (or TC staff?). I think the real scandal here is that two very prominent financial instutions, Allen & Co. and Bank of America, are behind this misleading offering. Heads should roll.

33. Erich
    

    August 12th, 2007 at 8:34 pm

    Lots of VCs love Glam and want to duplicate their ’success’ because lots of VCs are money guys and numbers guys, not actual web guys. Glam’s numbers are compelling but only if you don’t scratch the surface.

    Glam’s response to this kind of questioning is to say that they aren’t just an ad network, they’re more along the lines of an “advertorial” network. They don’t just sell ads on other sites, they syndicate their content, bundle it with an ad, and put it on other sites. They then sell ads at a higher rate to advertisers who, clueless as they are, like the fact that their ads are always surrounded by “quality” content and not “blog content”.

    Old school retarded media buyers love crap like that, but it has major problems in at least two regards. One is that blogs are successful and popular precisely because they’re different. The other is that i’m not convinced people read advertorial on blogs.

34. TechDumpster (living in First Life)
    

    August 12th, 2007 at 8:39 pm

    It’s funny to watch all of you criticize Glam when 99% of the things featured on TechCrunch would take the opportunity to lie and boast in the same way Glam has done.

    Glam raising $200 MM is tantamount to paying hundreds of millions for retarded companies like Last.fm.

    The hypocrites on this site crack me up.

35. Jon
    

    August 12th, 2007 at 8:51 pm

    whoa juicy details. love it.

    they should make a youtube movie, call it Glamgarry Glam Ross - “we have an incredible private placement deal for you, i am in town just tonight, 1 night only”.

36. 10012
    

    August 12th, 2007 at 8:58 pm

    boo!

37. EZ
    

    August 12th, 2007 at 9:06 pm

    It’s pretty obvious why they want to raise $200MM - so they can buy their top publisher partners and keep all the ad revenue. I’m sure USVP and First Round would love a quick 10x exit on MyYearbook.

38. Anon
    

    August 12th, 2007 at 9:11 pm

    I was just doing some more thinking and my guess is that the $200MM would most likely be cash to buy out some of the bigger sites in their network to make the inflated metrics a little more legitimate. I can’t imagine that they’d need that kind of cash for staffing up or technology investments alone…

39. Robert Seidman
    

    August 12th, 2007 at 9:13 pm

    On a story on the failings of iVillage in tomorrow’s NYT, Glam receives a postivive mention: “The more stylish Glam.com started courting iVillage’s advertisers.”

    http://www.nytimes.com/2007/08.....lage.html?

    P.S. TechDumpster: you doing something you hate (reading TC) so frequently seems uh…hypocritical. But it’s not that funny really.

40. Robert Seidman
    

    August 12th, 2007 at 9:15 pm

    writing on the blackboard 100 times: I will edit my TC comments before posting.

41. Brian Clark
    

    August 12th, 2007 at 9:24 pm

    >>Just curious, but isn’t Mike an investor/friend of PopSugar which could be considered a competitor?

    Let me say this–people who produce sites in this niche know that PopSugar is a legitimate and robust content network, and that Glam is, well… something else. Lay off of Arrington on this one… what he’s saying is well known among those in the know.

    >>It’s pretty obvious why they want to raise $200MM - so they can buy their top publisher partners and keep all the ad revenue.

    That’s what I would do.

42. J
    

    August 12th, 2007 at 9:40 pm

    Joe_r:

    yes sugar publishing is in fact competition with glam… at least according to techcrunch

    http://www.crunchbase.com/company/glammedia

    “Competitors include Sugar Publishing.”

43. cdo
    

    August 12th, 2007 at 9:47 pm

    I think this raise is for a roll-up. And its allen & co. that raised crazy inexplicable $ for ning - if clownco can raise $100m without a discernible product or service, trust me, glam will find a bunch of suckers too. Lots of big players who don’t want/need 10x, partic when they only want to play in $50m increments - when you deploy that kind of cash, getting 2x aint half bad.
    And I do agree w/ an earlier comment, glam aint that different from ivillage when it comes to ‘aggregating’ traffic.

44. Markus
    

    August 12th, 2007 at 10:06 pm

    What semi adnetwork doesn’t request one of these Traffic Assignment forms these days? I’ve got an inbox full of them.

    ************************************

    comScore Networks TAL: Traffic Assignment Request for comScore Networks Reporting

    I, _____ Name__________________, ___Title_____________of ( your site ) , certify that ( your company )

    a) is the majority owner of the URLs listed below
    b) enjoys a legitimate business relationship with ___________. justifying the aggregation of this traffic, and
    c) requests assignment of the traffic to these URLs from ( your company ) to ___________. in the comScore Networks syndicated audience measurement reports.

    In requesting this assignment, I understand that ( your company ) will not receive credit for traffic to these URLs in the syndicated audience reports for those entities where __________. elects to include these URLs. These URLs may not be assigned to any other company. In the event that comScore Networks receives multiple requests for assignment of the same URL, comScore will review and honor the request most recently received.

    I understand that this request is subject to review by comScore Networks to determine that the assignment of traffic is consistent with comScore Networks reporting rules. comScore Networks retains the right in its sole discretion to refuse the requested assignment if such assignment would in fact be inconsistent with comScore Networks reporting rules. If necessary, comScore Networks may require additional documentation to verify ownership of the URLs before granting this request. For example, if ( your company ) is not the named registrant of the URLs listed below, you must provide documentation demonstrating that the registrant of those URLs is (1) owned or (2) employed by (your company) ].

    I understand that acceptance of this letter by comScore Networks, Inc. imposes no legal liability whatsoever on comScore Networks, Inc. for damages, whether actual, incidental or consequential, relating to the maintenance or reporting of the attached URLs. I understand that ( your company ) is fully responsible for timely notification to comScore Networks, Inc. of any updates to the list below, including, but not limited to, changes in ownership of any of those URLs.

    ( your company ) shall indemnify and hold harmless comScore Networks from and against any claims, liabilities, costs and expenses of any kind (including reasonable attorney’s fees and expenses) arising out of any allegation of improper assignment of the URLs pursuant to this letter.

45. NicolasV
    

    August 12th, 2007 at 10:17 pm

    When you think some CEOs go to jail for changing the date on some employee’s options… At least give credit to Samir Arora for having balls!
    Truth is: he’s done an incredible job at raising money, and it looks like he’s not done yet.

46. Show Me The $$$
    

    August 12th, 2007 at 10:48 pm

    As an online media buyer, perhaps I have a different opinion then most of the outsiders commenting on the sidelines. I use comScore and NetRatings on a daily basis for planning media spends targeting large audiences online. Sorry to burst your bubble…but this just in…..Alexa is not an accurate tool for measuring online audiences. Sure you can usually tell if one medium-sized site is larger than a small one — as for engagement, demographics, unique visitors, etc..forget about it.

    iVillage is a collection of many sites just as Glam is. The same can be said for EverydayHealth/Waterfront Media. The only way to measure the audience that any large media property reaches is through a panel based media measurement tool like comScore. How does iVillage come out squeaky clean with sites like ScienceDaily.com and BookRags.com under their umbrella? It remains to be seen what they plan to do with Sugar because as of yet their is no iVillage branding or content and they still continue to run non-brand CPA ads. Everyone appears to be jockeying for position. Glam seems to be doing it best and it looks like the investors have noticed.

    Glam Media is a platform for reaching women through many different integrated online touch points. It does not matter if they own a site or have a partnership with them. Glam is the entry point for reaching this audience across many different sites representing over 20.6 million unduplicated unique visitors. They have proven to have strong relationships with their partners, innovation behind their programs, content distribution tools, and increased success with attracting new advertisers and publishers. They must be doing something right.

47. J
    

    August 12th, 2007 at 10:49 pm

    I’m having trouble figuring out why you guys are associating glam.com’s web traffic with the blog network traffic, which is what actually makes the company money.

    I’d use common sense to estimate that it costs more money for Glam to deliver an ad on their own website than it does on a blog in their network. So really, the company is even more profitable for partnering with the blogs than it is for directing traffic to its own website.

    What do you think the person with a $200m check to cut is really concerned about? Do they really care if Glam has a million monkeys on typewriters tapping out content ? The fact is the company has contracts with 300+ popular blogs and all advertising dollars go through them. Those blogs are seeing way more money than they would from their best alternative (ie Google), and the advertisers are seeing way more targeted eyeballs.

    I would bet more money on that arrangement than I would on an archaic Gawkeresque model such as *-Sugar.

    Take a look at Google. Would TechCrunch say Google was overvalued because much of its revenues came from other sites (ie: Google’s ad platform)?

    Sorry Michael.. Banking the value of a web property based on what you see in your browser’s location bar is the true perversion of the phrase “web 2.0″

48. anthropocentric
    

    August 12th, 2007 at 10:55 pm

    bubble trouble

49. Dan
    

    August 12th, 2007 at 10:57 pm

    EBITDA is a b/s metric.
    “earnings before interest tax depreciation and amortization”
    Some kind of earnings those are.
    And for this year, according to that chart, even the EDITDA is a loss.

50. SpaceTribe
    

    August 12th, 2007 at 11:50 pm

    This is perhaps the best journalism content piece I’ve ever seen.

    We’ve had a similar case in Israel once, I remember, when a porn company went public (in 1999?) based on a dating site front. Check it out, it might still be active, porn sites run forever.

51. citizen care
    

    August 13th, 2007 at 12:56 am

    That is definitely very much Samir Arora kind of act! Once upon a time
    Samir Arora said to his employees “I am a competitive man, I likes to win and I have always won” … if luck or fate has it, Samir Arora can outsmart Kenneth Lay and Jeffery Skilling in cheating, lying, and stealing.

    Glam’s extreme self-aggrandizement about its traffic and revenue potential smells much like ENRON. Only that the victims will not only be those private placement investors and some employees got their option date tossed, but also average consumers, future stock-holders, and specially the Internet professionals who will become the collateral damage of this sort crazy manipulation. Cheater like this will give budding Internet businesses a bad name, a few bad apples will spoil the entire industry.

    thanks God, this forum provides some checking.

52. Allison
    

    August 13th, 2007 at 1:13 am

    Something does not add up here- Investment Banks such as Allen and Bank of America have a solid reputation- these are not run of the mill banks. I looked on the web for more info and found posts on VentureBeat which says that PopSugar- one of TechCrunch’s investments is trying to launch a competitive service to Glam along with iVillage. Should this not have been mentioned in any financial reporting?

    If this is such a sham, why is iVillage/NBC reportedly - see NYT today scrambling to copy Glam’s model? I suspect it has to do with the revenue- the one thing that stood out in your post- real revenue growth that only the eBay or Google have experienced- and neither of them have any content or products - they power the little guy. This is what makes them much bigger than the likes of AOL, Yahoo or MSN. Sounds like Glam has discovered the same model for display advertising.

    I would read recent posts on this topic to get more on this topic…

    Glam to sign $1 billion ad deal…
    http://venturebeat.com/2007/08.....s-critics/

53. Thomas
    

    August 13th, 2007 at 1:29 am

    @Allison- Thanks for the informative comment and link. It really changed my perspective.

54. JT
    

    August 13th, 2007 at 1:58 am

    Something one should consider when looking at Glam’s projections is the performance of other women focused sites (i.e. theknot and ivillage). For example, in 2007, analysts expect theknot to have $100m in sales and ivillage to have $125m. Hard to believe that by next year, Glam is going to be as big, or even bigger, than both. And after raising $200m, their post-money valuation is likely going to be north of $500m. Hard to see how investors will get any return — especially with theknot having a market cap of ~$600m and iVillage getting taken out for a similar amount.

55. Allison
    

    August 13th, 2007 at 2:12 am

    @Thomas,

    Sure. I would suggest Michael take a look at it as well and add more than a link saying an alternative point of view to his post.

    Here is where I think he is stumbling - “They boast of faster growth than MySpace, and claim to be the no. 1 womens website on the Internet with 19.1 million unique monthly users” Michael main point about all this is the traffic nonsense with Glam seems to be claiming to be the “no. 1 women website” - after reading the quote the document actually says “#1 ranking web property”

    The confusion may be that comScore reports 3 types of media: single web sites domain names, web properties (with exclusive traffic assignments/ownership), and pure ad networks. Matt’s post explains that there is a difference between them. iVllage Network was no. 1 web Property- I did not realize that it is a network of many sites including ones it does not own, and Glam is now no. 1 - it is also a network but of more web sites. NYT today says that Glam is stealing away their advertisers. And this by powering the little guys & gals - I would think this is a good thing and kind of grassroots web like Doc Searle said would start to happen.

    @JT - Web Properties & Ad Networks seem hot- looking at the recent deals valued at 2B to 6B - much more than pure content or e-com plays like TheKnot or iVillage. Must imply that the scale that content companies get to 100M in revenue after 10 years like iVillage vs a new company like Google does in 4 years and Glam in 2 years. Nothing wrong with all this - Michael started this- now needs to follow through with some fact finding and additions to the story.

56. scruple
    

    August 13th, 2007 at 2:55 am

    Allison,

    I did check out your link and read Matt’s report, however I found that Matt managed to be cleverly bias without being too obvious.

    Matt did a nice job digging into lots information… not sure intentionally or unintentionally, he prefer to state it vaguely or make it remain vague at some critical information points. He quote “In most cases, Arora says, Glam has exclusive agreements in place to sell 100 percent of advertising on the sites in its network.”

    Checking with employees of Glam who sign contracts with Bloggers, they can tell you that most of their contracts with bloggers ARE NOT exclusive to Glam. Clicking on Glam network websites you can also see many Non-Glam widgets on there. Arora as a sale’s guy, known to have a compulsive self-aggrandizement syndrome. I would hope to see someone double check the truth by asking for the details of how many contracts are mutually exclusive and how many are not.

    In comparison with iVillage, the devil is in the detail of content owning percentage. iVillage might have some properties they don’t own exclusively, but iVillage’s core competence is content owner and hence majority of the ad sell is 100% revenue to iVillage. On the other hand, Glam is of the “land grabbing” biz model, majority of Glam’s revenue is NOT 100% to Glam. The percentage dictates the earning potential of each company

    Secondly, Matt’s report also makes a smoking mirror of Glam’s ad serving technology, if Glam claims to be the technology provider for ad targeting, what is the underpinning behavioral science behind Glam’s “technology”, does Glam possess any patent? How long has their technology been used and what are the results from advertisers? How does it compared to Behavioral Target Ad Networks such as Revenue Science, Double Click, and Microsoft’s new ad targeting technology?

57. JT
    

    August 13th, 2007 at 3:00 am

    @ Allison

    What recent ad networks went for $2-$6b? If you are talking about DCLK and AQNT those weren’t really ad networks but rather software solutions for advertisers and agencies (quite different businesses than Glam in my opinion). And to compare Glam to Google seems preposterous to me. Google has built its dominance off of a destination site whose technology is the “killer app” of the web.

    At the end of the day, Glam is a network of content sites targeting a particular demographic and it will generate revenue from advertisers looking to reach that demo. This is exactly the same model for CNET, IVIL, Viacom, Disney, FIM and countless other media companies. While these co’s may own all or most of the sites in their portfolios and are thus “Web Properties” vs. “Ad Networks”, this is a moot point to me since owning vs. repping has no impact on the ultimate revenue opportunity, but rather gross margins.

    Glam’s model is clearly to roll up its top affiliates and have the same portfolio approach that all media co’s have. And while it will own a certain percentage of those sites and rep the others, the bottom line is sooner or later the dollars for any category are only so much. And I just don’t buy that they will be able to expand to other segments and compete against other vertically-focued networks (e.g. IGN, Gorilla, etc.). I think the women’s space is competitive enough and it’s going to be tough for Glam to even maintain its current partners (e.g. zafu, myyearbook, etc.) who are out raising money off of the revenue that Glam provides and looking for their own exits.

58. Allison
    

    August 13th, 2007 at 3:25 am

    @ JT, my new compadre

    Google has built its dominance off of a destination site whose technology is the “killer app” of the web.- this is not financially true. Almost all of Google’s revenue initially came from partners that used embedded search. Last quarter seems like only 1/3 of Google’s Ads were search on Google.com - the rest were results of partner sites that drove search or ads served by adsense on the Google Network. Google’s killer app making money in fact, is AdSense.

    Agree with your points on network of sites like Glam, CNET, Viacom, Disney - doesn’t really matter if they own sites or not - if they own gross margins look high, but cost of content increases expenses, if they don’t - gross margins like Google look lower, but operating exenses are much lower. The later model seems to be scaling faster and better suited. I agree with Matt’s comment- the “Network Effect” will determine how this plays out and that targeting a demo also sounds right.

59. Allison
    

    August 13th, 2007 at 3:45 am

    @scruple

    I think the debate here has moved on - have been convinced by the comments whether they own or not doesn’t really matter like WebMD, Viacom etc. Sounds from Matt that iVillage being a content site has no bearing on revenue on sites they do not own- Glam and iVillage seem to have the same business model there. Potential revenue as JT says - and I agreee is the same- I guess his point is where does the exepense show and which model ultimately has a lower expenses. The network seems to be better - looking at Google.

60. J
    

    August 13th, 2007 at 4:02 am

    I think which model works is clear, Allison. Look at Style.Com, Conde Nast’s flagship web portal. Its a shame, cause that site is very nice looking.

    They mean well and have untold resources in terms of original content (Vogue, etc), but are hardly in tune to the decentralized nature of the current media consumption demographic that is quickly nailing in the coffin of traditional publishing…

61. jeremy liew
    

    August 13th, 2007 at 4:06 am

    Mike,

    Your post seems to be well researched and correct, but not shocking. Glam is without question an ad network (anchored by some sites that it owns) focused at women, with very high reach across its network affiliates, and using ad network industry standard practices of measurement (e.g. Comscore traffic attribution etc). I posted a little on how these “synthetic channels” of vertically focused ad networks are becoming more common at the Lightspeed blog recently- click through on my name or below if you’re interested in reading more

    http://lsvp.wordpress.com/2007.....-channels/

    J

62. publisher
    

    August 13th, 2007 at 4:08 am

    I’m a publisher with the Glam network, and just wanted to add my own perspective about the company:

    I think they’re playing a dangerous game with the numbers they’re citing as a “content site”, but within the context of Glam-as-an-ad-network, I’ve had a very positive experience with Glam. They’re very respectful of individual site owners and our own advertising wishes, are beautifully transparent about things like income, revenue and traffic breakdowns, are in constant contact to answer questions and generally maintain a relationship, and work with publishers to feature their content on the main Glam site. As the VentureBeat article notes, they’ve done a fantastic job of creating a network of publishers.

    If Glam didn’t exist, I’m not sure what other monetization options I would have as a publisher. Google ads are low-performing and not targeted enough, networks like AdBrite and BlogAds etc. don’t have the quality of ads I want for a fashion site, and networks like Federated Media only focus on higher-traffic sites. It’s hard to find a high-quality women’s advertising network that actually pays the hosting bills and is relevant to your content, so I really like Glam.

    Where does that leave us within this comscore controversy? I think as long as Glam is honest about what they are and aren’t, they’re a very good addition to the women’s publishing world. At least, they are for this publisher.

63. Tish Grier
    

    August 13th, 2007 at 5:11 am

    Investors may be, like lots of corporate folks, totally confused as to the difference between a blog network, an ad network, and a splog. If they simply take facts and figures, then what the company says, it becomes easy to believe an ad network is a non-content provider misusing the term “blog” to describe itself.

    Yet publisher above hits a point about Glam re how it helps her–that there are many niche sites who believe they should be making the big bucks (like, say BoingBoing)…but should they? There’s been far too much hype regarding how “YOU!” can make money from “BLOGGING!” When there are few who actually do just that (without supplementary income of some sort…in other words, most bloggers/content providers/self publishers shouldn’t quit their day jobs.)

    To my eyes, Glam looks like one of those sites that annoys the bejebus out of me when I’m actually looking for a site with information. I go to a site like that and while it may be legit, it’s merely a bunch of annoying ads. If I didn’t know better, I’d think it was a splog–which means, to me, that its got cracking SEO and someone who put a heck of a lot of money into it to make it into something legit. What that something is may be something I don’t want to get drawn to when I’m searching for information.

64. scruple
    

    August 13th, 2007 at 5:17 am

    I agree with JT that the comparison is on gross margin and expenses of each model (content partners vs. owner). And that partnership model seems more scalable in case such as Google adsense. Google Adsense lets advertisers sign-up without Google’s people-involvement, which makes it very scalable. That is not the case of Glam. Glam does not clam any app, they claim to be good at managing blogger network and media buyer’s relationships

    What triggered the debate was: why Glam needs to seek $200 million private placement fund? Where’s the anxiety coming from? To found out that Glam’s rational for funding is to buy/own some of the properties in its network. In another word, Glam wants to transform itself from partnership-based model into ownership based model. The irony is that Glam seems to want to be more like iVillage, and even worse, Glam is known to be not very good at capitalizing its own glam.com editorial content, now that Glam want money to become something they are not very good at? It smells fear coming out of Glam.

65. J
    

    August 13th, 2007 at 5:41 am

    Tish - nobody with $200m to spend is confused.

    It’s the bloggers that are confused.

66. Jim
    

    August 13th, 2007 at 5:48 am

    With respect to Glam versus Sugar Publishing, the latter is not “arc