TechCrunch is reporting that secret merger talks between blog search engine company, Technorati, and Canadian blog network, b5media, have collapsed.

The reason given was a personality clash between b5’s CEO, Jeremy Wright, and Technorati’s Richard Jalichandra and, according to b5 “a lack of transparency on Technorati’s part during due diligence.”

Judging by that, this “merger” didn’t really stand a chance. One wonders if Technorati took it seriously.

Toronto-based b5media has apparently been looking for “merger partners or acquirers” after failing to raise more VC money — it has so far received stage-one funding of $2 million. It seems Technorati has also had its financial problems.

The notion of a mass roll-up of blog networks to make ad sales more attractive and economical has been around a long time. Personally, the dynamic of that approach has still to be proved to me, especially in the current financial gloom.

Technorati has a big name, but is largely associated with a failure to live up to its billing. B5media has relentlessly stuck to its remit and expanded to 340 blogs.

I’ve long since lost faith in this horizontal model, which basically claims that small-scale content sites multiplied n-hundred times add up to a better business than three or four wowsers, or a tight-niched, product-based network, like Glam or TechCrunch. In this case, less is almost certainly more.

No “blog” network has really scaled up to the point where direct-response ads can be replaced with brand advertising. To sustain a company the size of b5 in personnel terms alone, that’s what it takes.

I’ve no doubt b5media will disagree, but they are faced with a double whammy : the brick wall of scaleability in the middle of a credit crunch.

Declaration of interest : I worked for b5media for a few months when it started up, and I am now the owner of a rival content network, Syntagma Media.

The twitter is beginning to sound a bit strangulated now. Like a flock of birds flying through a cloud of grapeshot.

Hugh Macleod’s cartoon sending up Twitter mania

It seems both Hugh Macleod (the gaping void — see cartoon above) and Robert Scoble are coming off Twitter, that maddeningly insistent waster of time for busy professionals who regularly protest about email-overload but tweet happily throughout the day to thousands of “followers”. Jeremy Wright too has whipped the twittering hierglyphics off his blog. At last sense has returned to the Techmeme crowd.

It’s becoming clear that the much derided New York Times article last Sunday, which pictured exhausted bloggers stumbling to early graves, has had an effect. Here at Syntagma we responded to the piece by suggesting a flight from Twitter as a first step to sanity.

Does anyone in real life speak in batches of 140 characters? I thought not. It’s so obviously an artificial way of communicating. And the way each twit begins with @fredbloggs as if a gun is being fired at his head, is very disconcerting.

The whole thing has got out of hand and GapingVoid’s cartoon gets it in a nutshell.

I’m coming late to this meme which peaked yesterday. Basically, it’s another example of the cultural cringe and sense of inferiority still found in folk who make — or try to make — their livings online.

Jeremy Wright takes the prize as the best respondent with his highly-informative Ensight post on how much the unionization of a blog network would cost. #

On digital networks in particular, the problem arose when someone called them an “industry” — a certain J. Wright of Toronto in fact. But given the quality of his post, we’ll forgive him for that.

If blog networks really are an industry then clearly they must comply with industrial standards embedded in law. But not by any stretch of the imagination can they be put alongside General Motors, Rolls Royce or Microsoft. They are a sector at best — a branch of the Content Producers Guild, which is a bunch of disparate individuals in most cases, not public joint-stock companies.

Jeremy’s post, though, covered all the exits. As I’ve written here many times, there just isn’t enough money in online, original content creation to comply with every jurisdiction where you may have bloggers. At peak, Syntagma had writers in nine different countries. I have difficulty keeping up with our own laws, let alone the world’s legislative extravagances. Around 4000 new regulations for business were handed down from Cloud Nine (Parliament and Brussels) last year alone. Most just pile rigidities on top of complexity.

However, there are still some ragged-trousered half-bakes around who consider the Web as a substitute for the old Soviet Union. At Performancing, no less, someone’s even writing about “collectives”. Stick that red flag in the washing machine, you may need it before long.

The internet is about individuality, not collectivization. We have enough of that drab science in the real world, thank you very much.

I’m all for open source and charity. But they should never be forced down people’s throats or the best part of humanity will be choked off at birth.

The Syntagma Story (continued)

Straws in the wind are important signals for digital farmers. They tell them crucially which way the wind is blowing, its strength, and something about the season/cycle.

There are now a lot of straws in the wind for digital networks (or, for purists, blog networks). BlogNetworkWatch no longer covers blog networks. It’s become a sort of mini Blog Herald. Many networks have shut up shop or are quietly getting on with their business underneath the radar.

So what is the state of the digital network business in these apparently doldrum conditions? As I’ve been writing here for a time, waiting for a knock on the door from the Business Development Officer of Yahoo/AOL/Google, whatever, is a sterile career move, and always was.

When Jason Calacanis announced Weblogs Inc was doing $1m a year on Adsense, followed quickly by its sale to AOL for $25m and a seat on the board, networks of content providers became the new Klondike. Lots of people moved in, including Weblog Empire (Duncan Riley) and b5media (Jeremy Wright and other names from the starry firmament). I worked for both before moving quickly on to form Syntagma Media.

Even then there were two ways you could play a digital network :

1. Build infrastucture and content platforms quickly so it stands out against the competition. Go for size and scale before anything else. Then, with a bit of luck, the BDO will come knocking on your humble door. Bingo! Blogging bliss.

2. Optimize the network for income — remember WIN was making $1m a year from Adsense alone before it sold out.

Here at Syntagma we followed Route 1, aiming always to reinvest income in exchange for size (55 sites and rising), and pushing the envelope into new fields, like network magazines and large retail portals. The business plan also included a move into IP-TV in 2008.

However, a major rethink has been forced on us through a number of events. Not the least is a lucrative publishing offer landing on my lap and, yes, straws in the wind. There are no big buyers of digital networks out there now, and even those that are sold have to settle for a bit upfront followed by a share in the income thereafter — in effect turning the owner into a salaryman of the buyer.

The really interesting point though, is that once you go from Route 1 and start exploring Route 2, something highly beneficial emerges. When you stop pouring all of your treasure into endless expansion, you discover that you can start paying yourself a handsome income just by running the network as a normal business, capping the size and scale, and going for quality and depth, rather than extension and constant revolution.

A network like Syntagma can easily pay its owner a six-figure salary (and rising) from a steady-as-she-goes policy of improvement and quality delivery. That assumes the business is around two-years old (we’re two in October) and has a bunch of mature inventory.

In the end, what you get out of a project is more important than prestige, size, or future bonanzas, real or imagined — try explaining it to your bank manager.

So that’s the subtle shift I’ve made in the running of Syntagma. From a network that, at its peak, employed 15 authors, with five vacancies outstanding, to a trim 30 to 40 sites with maybe six high-quality freelances working. We are now a medium-sized digital publisher aiming for depth and quality. One that pays its owner a decent salary, allowing him to spend time on the book deals.

I’m guessing that many network owners have already come to the same conclusion. It’s not astro science after all. If Route 1 seems like a distant dream, even a total mirage, then Route 2 holds some surprises in store. It’s the old bootstrapper’s adage that, the lower your costs, the less you have to turnover to get into the comfort zone. Syntagma is now officially a Route 2 business. Our motto is :

Mind you, if any BDOs are in the area, do drop into Syntagma Towers for a cup of tea. (The champagne has already been auctioned off).