It didn't take long for the blogosphere to start discussing the offer that Pajamas Media sent out to participating bloggers a few days ago and Ann Althouse has become the epicenter of the debate it seems. Ann’s problems in a nutshell focus on (a) the lack of information provided by PM and (b) the fact that PM ad revenue falls short of what’s she’s currently making from BlogAds. If you’re interested do follow the comment thread or read Dean Esmay and Ace of Spades who have also weighed in on the issue with their perspectives.

Since I signed up with PM and since I have been in touch with some of the PM folks over the past few months I would like to share some of my thoughts here, based on my understanding of the deal. Given my background in structuring business plans and financings for early stage (technology) firms I do think I have some credibility to comment on the whole thing and it is from that perspective that I will do so, Ann's commentary needs a rebuttal.

From day one it has been clear to me that PM is looking to compete with MSM and in the process take advantage of the same pool of ad revenues that currently support MSM. The underlying assumption has been that Economist and NYT readers read blogs too, and corporations that promote their services in these paper periodicals should in theory also advertize on well-read blogs. Now, regardless of whether you blog for cash or not, bloggers look for traffic and recognition (book deals, columns, radio appearances etc.) and if there is a vehicle that seeks to take the fruits of your labor to a higher level – more exposure – it is something that in my mind is of interest, regardless of the immediate monetary benefits. Especially when the people that are in the driving seat of that project have proven to be quality bloggers who are both intelligent and generous in the way they have promoted the entire blogosphere beyond themselves. Roger is a case in point, his generous linkage to my site while commenting that he considers me to be a worthwhile pundit on European matters is illustrative. And Charles has likewise helped many bloggers too. There now are many experts/pundits and PM is probably a first and genuine stab at creating a portal where various experts are aggregated, who in turn will benefit from the exposure that PM’s founders already have. If their vehicle is funded and well-managed than it should give additional momentum to the entire venture and all the bloggers that participate under the PM banner. That’s how I see it and that’s how I interpret what they have disclosed to the rest of world. I am not a partner, nor an investor, so I have not seen the detailed plans and PM has no obligation whatsoever to share them with any of the participating blogs. That brings me to my next point.

It’s always difficult to take a risk on early stage ventures but in general you buy into a concept or technology and the people behind it. You don’t have any other tools to measure it, although you could look at competitors and in this case there really aren’t any. PM is first to market. That by the way is not an easy spot, not only is there direct competition with MSM, there surely are a number of similar initiatives waiting in the wings to jump in and learn from PM’s mistakes while fishing in the same pond of limited ad budgets. But then the question is: do you want to take the risk that PM will not succeed? What if they do? Do you think PM will return to you with an offer down the road if you declined them today? There are no quick and definite answers here and the PM team probably doesn’t have them either. The point is that some bloggers have been asked to come on board at an early stage, be part of a journey that may well end up in a completely different place. There’s no early stage company that I know of that executed its first business plan in minute detail and never diverted from its initial plans. It doesn’t happen and it never will. Success is born out of bringing together a vision, the right people and some capital. From thereon anything can happen, but it all boils down to taking a view of the capabilities of the venture in question to succeed. If you bring in ten new participants at an early stage then each one will walk away with a different perception as to how success will be achieved, but they’re all willing to contribute capital or labor or advice (or a combination thereof) to help create success and a return, while willing to adjust their immediate return to a very low level precisely to ensure long-term success. That’s my view on any new deal that has the right ingredients and that’s my view of PM.

NOTE: The Anchoress wonders if this is splitting the blogosphere. It’s probably hard to maintain that it has ever been one unified whole, it has been a group of now millions of participants who are essentially all very small individual enterprises. That’s not sustainable and we will eventually see more consolidation (look at the increased number of group blogs) and PM is one of the first to make a formal move based on a business model. Expect more of it in the months ahead.