It didn't rank up there with Alan Greenspan's famed caution about "irrational exuberance" a decade ago, before the dot-com bubble burst and wiped out trillions in paper wealth, but Nick Denton's warning the other day caused people to take notice.
Denton is a new-media mogul -- an Oxford-educated former financial journalist who's become fabulously wealthy off his collection of popular blogs. The Sunday Times of London estimated his wealth last year at about $290 million. His New York-based Gawker Media operates several of the most busily browsed Web logs, whose daily readership would rank among the top newspapers in the country.
So news this month that Denton was selling three blogs raised eyebrows. One was Wonkette, a Washington political journal practically venerable among blogs -- and there aren't many times "venerable" and "blogs" share the same sentence. Wonkette is considered vital enough to the history of new media that the turquoise slippers of its founding editor, Ana Marie Cox, are displayed in the Newseum in Washington with the likes of Edward R. Murrow's microphone and a hunk of the Berlin Wall.
In a memo earlier this month announcing his sale of Wonkette, Idolator (music) and Gridskipper (urban travel guide), Denton wrote, "They each had their editorial successes, but someone else will have better luck selling the advertising than we did."
More ominous was his quote to a digital business blog, Silicon Alley Insider: "There's a cold wind coming."
Denton wouldn't release financial details of the sale, but added they're "not material," which was interpreted as meaning not much money changed hands.
"I'm not so sure that an advertising recession will spare the Internet," Denton wrote. "And, if there's a chill coming, I'd rather be stocking up on firewood."
In an e-mail last week, Denton declined to elaborate: "Sorry, said all there is to be said!" But his earlier warning was perplexing, particularly because with all the troubled headlines about traditional media, no one gives much thought to the sustained well-being of new media. That especially seemed the case with blogs, which have low operating costs, mostly for writers and Internet hosting fees.
Moreover, ad spending for the Internet last year was up 15 percent from 2006, according to the market research firm TNS Media Intelligence. (TNS does not break out blogs as a separate category.)
Ad spending for television, meanwhile, was down nearly 2 percent; for radio, down nearly 4 percent, and for newspapers down nearly 6 percent. Total Internet advertising is still a small piece of the pie at $11 billion, however -- less than half the size of newspaper advertising and one-sixth the size of TV advertising.
This wasn't the first time Denton has sounded apprehensive.
"You launch a site, you have great hopes for it and it does not grow as much as you wanted," he told The New York Times in 2006 about his emerging Web empire. "You have to have the discipline to recognize what isn't working and put your money and efforts into those sites that are."
He acknowledged the Wonkette sale would be seen as surprising, especially during an election year that will generate a record audience.
"So why not wait, at least till the election?," he wrote on Gawker.com. "Well, since the end of last year, we've been expecting a downturn. Scratch that: since the middle of 2006 ... we've been waiting for the Internet bubble to burst. No, really, this time. And, even if not, better safe than sorry; and better too early than too late. Everybody says that the Internet is special, that advertising is still moving away from print and TV. And Gawker sites are still growing in traffic by about 90 percent a year, way faster than the Web as a whole. But it would be naive to think that we can merely power through an advertising recession."
He wrote that he wanted to concentrate on his company's newer blogs such as Jezebel (women's fashion, gossip) and io9 (science fiction) as well as Gizmodo, one of the most popular technology blogs, and Kotaku, a gaming blog.
"And, then, once this recession is done with, and we come up from the bunker to survey the Internet wasteland around us, we can decide on what new territories we want to colonize."
Meg Hourihan, co-founder of the blog-publishing site that became Blogger.com, said she didn't sense a "cold wind," and thought that the comment was just her friend being himself.
"Nick loves to appear negative, it's his strategy to publicly disparage Gawker," she wrote in an e-mail. "Selling/unloading a few sites doesn't mean a whole lot, except that he's got great business sense and doesn't hold on to anything but his top producers. He continually culls the weak sites (and editors) from his herd.
"I see the dollars continue to move from offline to online arenas and predict the growth continues online. Google just had another big quarter, so I think that demonstrates the marketplace is still sound," wrote Hourihan, who with Denton created an online blog guide called Kinja a few years ago that's about to shut down. "I'm bullish on Internet advertising, and I suspect Denton is, too. You don't see him selling all his sites, after all."
Andrew Ratner, a former technology reporter, is Today editor of The Sun.