Bloggers Rebel Against Federated Media

Over the last year John Battle’s Federated Media (FM), which sells advertising for some of the most popular blog sites has been shrouded in controversy. First FM was trying to raise capital or cash out on a crazy valuation of $400 million. They eventually rasied $50 million from Oak Investment Partners on a valuation of $200 million. But In November Giga Om canceled their advertising deal with Federated Media and went with IDG. Last week Federated Media announced layoffs and said they were going to move away from display advertising.

Perhaps the dagger in the heart was when FM’s crown jewel TechCrunch gave a hint that they are considering alternatives. Michael Arrington wrote in his blog post, “I’m nervous about our ad partner Federated Media, which supplies about a third of our total revenue. They’re going through layoffs and payments from them have dipped substantially in recent months.” He goes on to say that they give FM a 40% cut on their advertising revenue. For one of the leading tech blogs this seems like a steep price to pay for driving a bulk of FM’s revenue. If TechCrunch bolts from FM like Giga Om and Digg did then I would say that FM’s days are numbered.

Michael, I think you deserve to keep more of your money and I think FM is getting greedy. FM will soon find themseleves going out of business if they don’t keep their best partners happy.