A company opening up to the public today, OpenSky, hopes to give news blogs a way to make money beyond plain old advertising. It’s allowing niche media businesses to sell products directly to readers and earn a revenue share.
OpenSky founder, John Caplan, who was chief executive at Ford Models and head of marketing at About.com, wants to make online commerce a lot more personal and intimate. He’s found 250 “tastemakers,” or bloggers like Marta Wohrle of TruthinAging.com, who are willing to sell products directly to their audiences from more than 500 suppliers. OpenSky splits the profits with publishers 50-50.
Publishers choose items on the site that they want to sell, decide what price to sell them at, and then easily drop those items into their posts. Caplan said he wasn’t worried that such a program might compromise the perceived integrity of the bloggers, because they retain control over what they recommend. (It’s up to the publisher how much they might want to affect their credibility by shilling products.)
He stressed that OpenSky was a bit different from existing affiliate programs, where sellers get a specific fee, usually below 10 percent, for sending over customers. OpenSky’s publishers “control the relationship with the consumer,” he said. “They are building their own retail business, are connecting directly to suppliers and building lifelong consumer relationships.”
The company, based in New York City, raised $5 million last year from Highland Capital, Canaan Partners and Ron Conway.
While we haven’t seen a company with OpenSky’s exact business model before, there are plenty of startups trying to help bloggers cash in through direct sales. Google-backed Pixazza gives bloggers technology to inexpensively tag clothing and fashion in photos. It’s doing so in the hope of earning advertising revenue or affiliate fees when the goods are actually sold.