And sure, there had to be operating costs, but running a site like PJM and an ad network is not a massive operation. The staffing model is distributed by its very nature and can easily be managed by 5 key staff and a network of part time contractors. And even if their operating costs were $500,000 a year, with the 50% capacity utilization I was talking about before they’d have a nice tidy sum of $250,000 of profit and $250,000 left over to pay out to their bloggers.
So going back to why this doesn’t add up…either Simon paid bloggers more than they actually made, which is INCREDIBLY dumb, or he’s lying and just wants to focus on PJTV, which I think is probably a lot more likely. Also, the PJM news portal will remain as is with staff to support it. So where do you think the money to start up PJTV and keep PJM going came from? It doesn’t make ANY financial sense to shut off the ad network and keep the other sites going.
(via Jay Rosen)
February 2, 2009 at 3:18 pm
Update:
http://donklephant.com/2009/02/02/more-on-pajamas-media-business-model/