(from The Australian)

With internet blogging on the cusp of becoming a commercial medium, a local publisher is attempting to create Australia’s first significant independent blogging network. Allure Media, which next week will launch its fourth blog since April, also has the licence to launch local versions of the Gawker Media portfolio of high-profile US blogs such as tech blog Gizmodo and celebrity gossip blog Defamer.

It is backed by the $40 million internet investment fund Netus, which is led by former Microsoft executive Daniel Petre, while News Limited (publisher of The Australian) has majority ownership. Netus operates separately from News, but the investment reflects thinking within traditional media companies that blogging is beginning to become mainstream, with some blogs attracting significant audiences and even advertising revenue.

Netus executive director Craig Blair said Allure, which started in January, would launch eight to 10 blogs in the next six months. It launched a local version of technology-in-action blog Lifehacker last week, and next week will unveil gaming blog Kotaku. (…) “For advertisers, this is a really good way of getting niche audiences. We’ll expect a business like Allure Media to break even within 12 months.”

According to Tim Hughes, former Netus executive, blogger and commercial director of HotelClub.com, advertising revenue on blogs would comprise less than 1 per cent of the $335 million online display market. “It will grow,” he said. “Great content with great readership equals the ability to monetise.” (…)

The highest profile independent local blogger making money is Melbourne-based Darren Rowse, who runs Problogger (a blog about how to make money from blogs) and a number of digital photography blogs that attract related advertising. Mr Rowse is also a co-founder of b5media with two other local bloggers. B5media, which is based in Canada after it secured $2 million in venture capital funding two years ago, has a sales team that sells advertising on nearly 250 blogs globally, organised into about 15 channels. “We contract bloggers around the world to write for us and we revenue-share with them,” MrRowse said. (…)

What it means: a couple of interesting insights. We see more and more of these blogging networks being built with the objective of reaching critical mass from a visitor, content and revenue point of view. I think it’s one of the best strategies right now to build a serious media business out of blogs. Those networks are usually managed like vertical magazines. Second, I like the fact that News Limited, a traditional print media publisher, is getting in that game via their investment fund. Smart. Third, I did not know Gawker Media licensed their brand in the world. That’s a great new revenue source!