VCs see opportunity in blogosphere
Venture investors normally cite the strength of a company's management team as a key reason for investing in new technologies and ideas. But two new venture investments in widely read Web logs, or blogs, have taken this concept to a new level: investing directly in people for the content they produce.
Earlier this month, Softbank Capital of New York led a $5 million first round of funding for political group blog Huffington Post, the site operated by columnist and one-time California gubernatorial candidate Arianna Huffington.
A few weeks earlier, nascent Silicon Valley firm True Ventures completed its first-ever investment, a small funding for GigaOmniMedia Inc. of San Francisco, the operator of the personal blog of influential technology journalist Om Malik.
Increasingly viewed as an alternative to traditional mainstream media, the blogosphere is variously regarded as more opinionated, faster-moving and less factually reliable than other outlets, including an older generation of online journalism. As Softbank's Eric Hippeau pointed out, the popularity of blogs may hold clues to how news will travel in the future.
'We view this as an investment in a news site,' said Hippeau, whose firm invested alongside Apax Worldwide Partners LP co-founder Alan Patricof. 'We think the news of the future will look like the Huffington Post. It includes breaking news, instant commentary, blogs and community, with a comments section that can be almost like a mini-blog.'
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