Tech Blogs Turn From Hobbies to Businesses

June 21, 2007— -- "Om (Malik) and I love scotch," Michael Arrington says. "But we never drink anymore."

The two friends no longer have the time or energy, in part because they're too busy competing with each other.

Both run influential technology blogs that are helping drive the current Internet boom— and making Arrington and Malik tech luminaries in their own right.

Arrington, 37, is the force behind TechCrunch, a blog chronicling the rise and fall of Internet start-ups. (They're often called Web 2.0 companies.) Malik, 40, runs GigaOm, a slightly more scholarly blog that looks at all things techy.

GigaOm has readers numbering in the hundreds of thousands, and TechCrunch's audience tops a million. But that doesn't accurately reflect their far-reaching influence. TechCrunch is the fourth-most-linked-to blog on the Internet, says Technorati, a blog search engine. GigaOm ranks 34th, a still impressive number given that Technorati tracks more than 86 million blogs.

TechCrunch's impact could soon be as great as Silicon Valley's major newspaper, The San Jose Mercury News, says Paul Gillin, author of blog guide The New Influencers. "It's one of the first things I read every day," says David Cowan, a venture capitalist for Bessemer Venture Partners. "It's hard to describe the extent to which I rely on TechCrunch."

GigaOm may not have quite as much pull, but it still has a long list of powerful readers. Malik is "a really smart guy, and he makes me think," says Roger McNamee, a prominent venture capitalist with several Silicon Valley firms. "He's really significant," says Max Kalehoff, a vice president at research firm Nielsen BuzzMetrics.

It's high praise for two blogs that started as hobbies. Both Arrington and Malik say they're surprised at how quickly their side projects became businesses — and obsessions. The two friends seem to be always working, often posting in the middle of the night. They look tired.

"I scheduled a conference call with a (public relations) person at 2:30 a.m.," Arrington says.

"Sleep and I have broken up. Coffee and I are having an affair," says Malik, cup in hand.

From Hobby to Job

Both men have roots in the original dot-com boom of the late 1990s. Arrington worked at famed law firm Wilson Sonsini Goodrich & Rosati before trying his hand at several start-ups. None went far.

When evaluating potential jobs, Arrington found it tough to find reliable information on start-ups. He started TechCrunch as a side project in 2005.

His audience and advertising revenue grew, and the hobby-blog turned into a job. He began hosting parties at his house, a well-worn rental in a swanky Silicon Valley neighborhood. Chad Hurley, co-founder of a then-tiny start-up called YouTube, came over. Guest lists swelled to 150, then 550.

Suddenly, TechCrunch could make or break a start-up. Entrepreneurs swarmed Arrington at conferences. Several showed up at his house one morning and banged on the windows until he let them in, he says. He hired five full-time and 16 part-time employees, and broke the news that Google was acquiring YouTube.

The more powerful TechCrunch gets, the more controversial it becomes. The companies Arrington covers are also his advertisers and sponsors. He's invested in a few Internet start-ups.

"I disclose the hell out of (the conflicts of interest)," Arrington says with a shrug.

He says that Heather Harde, a former Fox Interactive Media executive hired to expand TechCrunch, wants him to reduce potential conflicts. She has ambitious plans to turn TechCrunch into a mini-media empire. (TechCrunch has already launched several companion sites, including job site CrunchBoard.)

TechCrunch is also holding a conference for start-ups in the fall in partnership with another blogger, Jason Calacanis. Malik is one of the scheduled panelists.

For now, Arrington's conflicts of interest don't seem to be hurting his company.

"We're making $200,000 a month in revenue. We're super-profitable. We don't need (venture capital) money," he says. Yet, offers are on the table, which they're evaluating, he says.

Chronicling Web 2.0

Malik, often known as Silicon Valley's nice guy, grew up in New Delhi. He taught himself English by reading The Times of London, moved to the USA, and became a journalist for tech publications Forbes.com, Red Herring and Business 2.0. GigaOm was a side project.

But its readership and reputation grew, and venture capitalists began offering money. Malik resisted, because he liked being a magazine writer. But he finally accepted less than $500,000 from True Ventures.

He went full time, hired five full-time and six part-time employees, and launched companion sites, such as Web Worker Daily, a site for technologists who work from home, and guest editorial site Found+Read.

Malik is less controversial than Arrington because he has stricter rules. He does not invest in companies he covers, and is less likely to pass along rumors.

The business is not profitable, but Malik hopes it will be by late summer.

TechCrunch and GigaOm have plenty of competition, including Matt Marshall's well-regarded VentureBeat blog, and Valleywag, a site owned by blog giant Gawker Media.

Then there's the lingering fear that Web 2.0 could be as big a bust as Web 1.0.

Arrington wrote a much-discussed post in which he complained that Web 2.0 wasn't "fun" anymore. Most start-up ideas are either good or stupid, Malik says. "There is nothing in between."

Some days it's tempting to cash out. "It would be really interesting to sell this thing for $20 million and go live in Hawaii the rest of my life," says Arrington.

But that seems unlikely. Arrington and Malik each confess to being fanatically attached to their jobs. "I wouldn't trade it for anything else," Malik says.