When it comes to the profit potential of blogs, Nick Denton, founder of Gawker Media, calls himself a skeptic.

It’s a surprisingly pessimistic perspective coming from the Brit who has launched a network of 13 theme blogs — including Fleshbot (porn), Gawker and Defamer (gossip), Gizmodo (gadgets) and Wonkette (politics). His most popular properties (Defamer, Gizmodo and Gawker) report between 4 million and 6 million visits per month and millions more pageviews, he and his top talent have been featured in articles in the ink-and-pulp press (Wired, The New York Times Magazine) and Denton rarely misses an opportunity to trumpet ads on his sites for blue-chip companies like Absolut, Audi, Sony, Nike, Viacom, Disney and Condé Nast.

So you can forgive his competitors for not buying into his deflationary spin: As David Hauslaib, founder of Jossip and the newly launched Queerty, put it: “Nick infamously downplays the profit potential of blogging the same way Tom Cruise’s sister-slash-publicist Lee Ann DeVette pretends his relationship with Katie Holmes is authentic. Even people outside the industry know it’s a sham.”

Hauslaib credits part of Denton’s success to his ability to keep mainstream publishers away from his medium, guaranteeing he’ll be the biggest player when media buyers come knocking. But Hauslaib believes there are plenty of seats left in the arena. There could an additional handful of gossip sites to compete with Gawker (and Jossip, for that matter), and ad dollars would continue to flow in.

“I’d love to see another half-dozen professional gay blogs surface that, in theory, would compete with Queerty,” Hauslaib said, “but more importantly, they’d be validating the space and attracting even more ad dollars for everyone.”

This is a theory that Jason Calacanis — the founder of Weblogs, who Denton refers to as his “endlessly entertaining rival” — subscribes to. Calacanis is perhaps the blogosphere’s biggest booster. I half expect him to claim that blogs will one day provide the cure for world hunger, cancer and bad hair. But he deserves credit for spotting a business opportunity at a time when many people viewed blogs as a digital wasteland (complete with typos, bad grammar and lowercase letters running amok).

Calacanis employs 120 bloggers and publishes 90 blogs — including Engadget (which covers consumer electronics) and Blog Maverick, typed by billionaire entrepreneur and Dallas Mavericks’ owner Mark Cuban — with his writers making anywhere from $200 to $3,000 a month. (One presumes Cuban doesn’t do it for the money.) On average, Weblog salaries are about a quarter to half what a mid-level editorial job would pay, without the daily office commute.

“Not to mention (bloggers) get to write about the topic they are most passionate about,” said Calacanis, who claims to be on track to collect more than $1 million in Google AdSense payments over the next year. “So, for our folks, it is like they are making money off their hobby. Think a scuba diver or video-game player making $500 to $1,500 a month writing about scuba diving or video games.”

By Adam L. Penenberg

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