GigaOm shuts down: Why did Om Malik's tech blog run out of money?

GigaOm Was Universally Respected. Is That Why It Ran Out of Money?

GigaOm Was Universally Respected. Is That Why It Ran Out of Money?

Future Tense
The Citizen's Guide to the Future
March 10 2015 7:27 PM

GigaOm Was Universally Respected. Too Bad Respect Doesn’t Pay the Bills.

GigaOm founder Om Malik, right, presents an award at the 2015 Crunchies with TechCrunch founder Michael Arrington. Both founded their sites nearly a decade ago; only one is still standing.
GigaOm founder Om Malik, right, presents an award at the 2015 Crunchies with TechCrunch founder Michael Arrington. Both founded their sites nearly a decade ago; only one is still standing.

Photo by Steve Jennings/Getty Images for TechCrunch

The tech blogosphere was taken aback Monday night at the sudden news that GigaOm was shutting down:

Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company’s assets as their collateral. All operations have ceased.
Advertisement

GigaOm began as a side project of pioneering tech blogger Om Malik. In 2006 he left his job at Business 2.0—it shut down a year later—and took venture-capital money to turn GigaOm into a company. He cited paidContent’s Rafat Ali as an inspiration and announced his move on the same day that Michael Arrington’s TechCrunch celebrated its first birthday. Fittingly, though, he had been scooped on his own news by the original ValleyWag, which was also basically just one guy.  

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer. Email him at will.oremus@slate.com or follow him on Twitter.

The tech blogosphere was not yet a sphere. It was just some nodes that linked to each other.

Over the years Malik and GigaOm succeeded beyond expectations—or so it seemed. The site sprouted separate verticals covering disparate realms, from media to cleantech, and raised millions in further funding rounds. It launched a subscription-based market-research business, GigaOm Pro, and threw itself into the events business with conferences like GigaOm Structure and GigaOm Roadmap. In 2012 it gobbled up paidContent, the seminal blog that Malik had viewed as a role model, and which had once been valued at $30 million in its own right. It jostled with big names like Reuters, the Wall Street Journal, and Re/Code in the top 10 of Techmeme’s leaderboard, which ranks publications by the number of big tech-news scoops they score.  

Malik himself left in 2014, declaring the company “all grown up” and ready to stand on its own. It would be helped by another $8 million in VC cash, plus a research business that Malik said was “growing at an astounding rate.” Malik’s valedictory post was triumphant:

In 2008, our company decided that we would not pray at the altar of pageviews and advertising metrics that do nothing but devalue our readers’ time and attention. Instead, we opted to take the road less traveled — subscription revenues.
Advertisement

And that, it seemed, had made all the difference. Other tech blogs chased clicks by slapping improbable headlines on every viral story that hit the front page of Reddit. Not GigaOm. Its reporters were specialists, doggedly covering the same, relatively narrow beats in which they’d developed expertise. Nor were those beats particularly mass-market–friendly. Stacey Higginbotham covered the Internet of things; Katie Fehrenbacher owned cleantech; Jeff John Roberts covered tech law and policy; Mathew Ingram covered digital media. Their posts were thoughtful and serious-minded, combining news with analysis. I never clicked on a GigaOm story and felt cheated. And it’s telling that, when GigaOm went down, my first impulse was to turn to Ingram for analysis.

GigaOm appeared insulated from the great pageview race by its business model, which relied on deep-pocketed enterprise customers to subsidize its editorial operations. It stood as a reminder that it is possible to do serious journalism on the Web without treating one’s readers like numbers on an Omniture report.

And then it fell.

The dust has not yet cleared. I asked Malik for comment Tuesday morning, and his response made it clear he was too broken up to talk about it just yet. “There will be time for postmortems,” he wrote in an emotional statement on his own blog. “But not today.” I tweeted at a gaggle of GigaOm writers and received not a peep in reply.

Advertisement

Was the company just mismanaged? Did it err by taking more venture capital than a serious-minded content company could support? (If so, the headline of Nick Douglas’s 2006 Valleywag post about its first funding round will look rather prescient: “Om Money, Om Problems.”) More worryingly, could the site’s downfall portend a broader “shakeout” in online media, pricking the bubble that has filled sites like Vox Media and BuzzFeed with cash? We can’t know for sure until we understand the details of what transpired.

What we do know is that the tech blogosphere has lost another of its original nodes. This one, unfortunately, happened to be a beacon for those who believed in a model that prioritizes editorial judgment over virality and substance over flair. Perhaps that’s a coincidence. But it probably isn’t.

GigaOm was not the only modern media organization that respected its readers’ intelligence, and I’d be hard-pressed to say it was the best. In traffic, it lagged behind its more breathless rivals, including TechCrunch, Mashable, and Business Insider. But it did good, honest work, and it cultivated skilled journalists who knew what they were talking about. In an ideal world, that would have counted for more than it apparently did.

GigaOm’s aversion to clickbait was one reason why no one was dancing or snarking at word of its demise this week. Another is that, in today’s media business, it’s best not to ask for whom the bell tolls.

Future Tense is a partnership of SlateNew America, and Arizona State University.