Jeremy Wright has stepped down as CEO of b5media, the blog network he helped co-found, mostly for unspecified personal reasons.
While Wright will remain a board member and shareholder of the venture-backed startup, he already has a replacement: Elaine Kunda will take over the reins as CEO from this point forward.
The decision apparently stems from the beginning of this year, when Wright took a short vacation and went offline for about 10 days. He writes:
Image-licensing network GumGum is growing by leaps and bounds. Measured as an advertising network, it is now a Quantcast Top 100 site, reaching 13.7 million people in the U.S. and 23.5 million worldwide. More than 1,000 Web publishers are licensing images through GumGum, which allows them to pay based on how many people see the image or use them for free with embedded advertising.
Today, GumGum is adding blog network B5Media and gossip site DailyFill to its customer list. They join Glam Media, MTV, and Gawker. Sites that rely on celebrity pics particularly like GumGum’s model.
Toronto based b5Media is changing the way it pays bloggers in its hundreds-strong blog network, according to an email memo sent out to partners by CEO Jeremy Wright and copied below.
Gone are guaranteed payments of “$100-$200/month” plus bonuses for traffic. In its place are much smaller guaranteed payments plus monthly bonuses for “press coverage you or your blog gets, exclusive interviews you land and growth of your blog.” Blogs can also get a quarterly bonus based on a scoring system.
The traffic bonus system was over-rewarding bloggers, says Wright. The new system will likely result in a big pay cut, but Wright says it’s necessary to align incentives:
I’m sure by now you’ve run your blog through the system above and realized that (with a handful of exceptions), due to the change to Omniture as a stats package, your pay will go down. For some it will go down significantly. Obviously this isn’t the intent of the new pay system, it was just the flaw in the previous stats package. For the last two years, b5 has been effectively paying bloggers 2-3x more in traffic bonuses than they were actually getting. While, again, this isn’t a blogger’s fault, neither is the new pay system about “cutting pay”. Any reduction in pay is due almost exclusively to the reality of using an inaccurate pay system in the past vs an industry standard third-party audited system going forward.
While this is certainly not good news for the already low paid bloggers in the b5Media network, it isn’t necessarily a sign that the company itself is failing. Rumor is that b5Media has raised a new round of financing and will be announcing it soon. In April, we reported that merger discussions with Technorati fell through at the last minute.
The full email memo is below. I’ve contacted Wright for a comment.
b5media, a media network with over 350 blogs, has partnered with PicScout to obtain legally licensed images at no cost through their PicApp application.
PicScout originally started off as a content copyright enforcer, hunting down unlicensed images on the web with its flagship ImageTracker program. After realizing how ubiquitous unlicensed images were, the company launched PicApp, a flash-based image provider that offers legally licensed images from large databases for free. The company makes money by including ads as part of the embedded picture viewer.
b5media will use PicApp to complement a number of other image partners. Many high quality images from licensed catalogs can go for $10 and up, which can have a significant impact on a blogging network’s bottom line. The company says that using PicApp’s free content for some of these images should reduce licensing fees substantially. b5 has over 250 bloggers, which generate upwards of 10 million unique visitors monthly.
The partnership marks a big win for PicApp, but it’s hard to imagine a Flash-based image provider becoming commonplace on the web. Flash is clunky and slow compared to normal images, but at this point the plugin is a necessity for image catalogs to control their content. GumGum is another player in this space that uses similar Flash technology.
Here’s an example of a licensed image:
Image details: Cannes: Blindness – Premiere served by picapp.com
Blog search engine Technorati was days away from merging with blog network b5media when the whole deal blew up earlier this week, according to a source familiar with the negotiations.
Technorati has been searching for a new strategy ever since it appointed CEO Richard Jalichandra last October. It was recently trying to raise an additional round of financing, and pitching venture capitalists that it could turn itself into a blog advertising network and/or even pursue a blog roll-up strategy.
The talks with Toronto-based b5media (they’re big in Canada) indicate that it is taking the blog roll-up idea more seriously than we previously thought. If the merger with b5media had gone through, Technorati would have gained a network of 340 blogs. One of the slides in the pitch deck Technorati was showing potential investors (shown above) outlines how a roll-up strategy could be combined with an ad network. Technorati would use its search engine to promote owned-and-operated blogs. It would sell ads using its own sales force instead of third-party ad networks for an “immediate 30-50% revenue bump” and sell across its network.
According to our source, the deal with b5media never went through, though, because of personality conflicts between the CEOs and a lack of transparency on Technorati’s part during due diligence. At least that is how the b5media side sees it. Prior to its dalliance with Technorati, b5media was itself trying to raise another venture round that would put a $20 million valuation on the company. But there were no takers. So b5media started talking to potential merger partners or acquirers (including at one point Federated Media Publishing). A combination with Technorati could have made both Technorati and b5media more appealing to later-stage venture investors. But now the two need to keep looking for other options before their time (and cash) runs out.
