ARE BLOGS THE FUTURE OF PUBLISHING?….Nick Denton has been pushing the idea of “nanopublishing” for a while now: blog-like sites that can be profitable because their costs are very low. Typically, he says, these sites employ only one or two people and have very low ongoing costs. Gizmodo and Gawker are two examples that he’s been involved with setting up.

Today Nick points to this article in the Guardian about nanopublishing:

Denton says a site such as Gizmodo costs between $1,000 and $2,000 a month to maintain. It is run by one journalist – Peter Rojas – and employs one designer. “Start-up costs were minimal, at around $2,000 for the initial set-up, plus $150 for the Moveable Type software the site uses.” So, in other words, Gizmodo and Denton’s other sites won’t be running up huge debts as they attempt to build a readership. “Some of these new online media ideas are small but potentially profitable little businesses.”

I still don’t get this. I’m sure these sites can probably build some traffic and attract some advertisers, but why would an investor be interested in funding a “profitable little business”? Or even several of them?

Investors typically want to put their money into a business that has the potential for huge profitability. But even if Gawker turns a profit of $100,000, and even if Nick starts up a dozen similar sites, that’s only a million dollars. Sure, that’s nice, but it’s not going to attract any serious attention, is it?

The only way for a nanopublishing company to make lots of money is to have lots of sites. But there are only so many sites that a single person (or a small management group) can run. And in the end, if each site is run by a single writer, then the attractiveness of the site depends precariously on that one person. What happens when Elizabeth Spiers leaves Gawker and starts her own blog? Does it shut down for a while until Nick finds a replacement? Struggle along until someone new gets up to speed?

I dunno. The dead-tree world is chock full of nanopublishing enterprises too, and they’re called newsletters. These can be quite profitable if they’re run by someone whose advice is valuable, but people like this run their own show and pocket all the profits themselves. The vast majority of newsletters, conversely, are just freebies distributed by enthusiasts. Like blogs.

Count me as a skeptic for now. The business model still seems pretty iffy.