The ad network portion of Pajamas Media is closing up shop as of April 1. Some members of the network are taking it better than others. The bottom line, according to Roger Simon, was red - the network was a steady money loser, with the bloggers getting more than the advertisers were paying. Here's a bit of comment from a venture capitalist's perspective:

I was one of the early readers of what became the PJ Media business plan, due to my friendship with Marc "Armed Liberal" Danziger, who was part of the team at that point. My own fund's prospectus specifically said we would not invest in content, so I wasn't a potential funding source, but I did offer advice and a few introductions to other funds that might have taken an interest in the plan.

My strongest suggestion to the team was to simplify the plan. When I saw it, it included three business ideas:

• A branded destination website and content network with a stable of regular bloggers.


• An advertising network reaching affiliated bloggers' sites.


• A technology play to improve advertising sales and results in the network.

From my perspective, that was two bullet points too many. It's rather axiomatic that a startup venture gets one bet, on the nose. The increasing capital requirements and span of expertise needed mean that attempting to play multiple games usually inflates risk for a new venture, rather than hedging it. I suggested that the team pick their strongest idea and run with that alone. I'm sure the input was appreciated, but it was not heeded.

In the event, PJM found a single source to provide their financing. While having a sole investor inevitably gives up some control, it also lets a team get off the road and on with building the business. At about the same time, the third bullet point above removed itself when Marc left the Pajamas team. That still left two business concepts under one roof, competing for resources.

This week's announcement is just the dénouement of that situation. Anyone who's paid attention knows that the effective CPM for both click-through and exposure ads on blogs s***s. I mean really s***s - like up to an order of magnitude less than run-of-site ads on big, topically diffuse web properties. Gadget, finance or technology blogs can rise above the crowd, but political and opinion blogs tend to be the worst. When readers are focused on a potentially stressing discourse, they don't tend to notice or click on ads. Fancy that! And what did the PJM ad network's stable consist of?

The market has rendered its opinion on the two PJM business propositions, and the ad network came up the shortest. My guess is the combination of the end of election cycle advertising and the recession-driven fall off in general advertising were the last straws. Somebody may figure out how to make blog advertising economic, but it won't be PJM. The company has retrenched into the destination site play, and is trying expand it into the TV-via-Internet market. That's certainly no guaranteed success, but it's also rather axiomatic than a venture investor under duress will plunk on the opportunity that appears to align with a growing market. Is there a play for talking-heads-on-demand? Watch and find out.