Blogonomics: How Gerson Lehrman Pays Bloggers

Call it the monetization of opacity. One of the biggest buzz topics of the Money:Tech conference is dark pools: the way that stock trades are migrating away from open and transparent public exchanges, and into black boxes which don't make their trade data public. Today, up popped Jonathan Glick of Gerson Lehrman on the blog panel of all places. Which on its face is weird: blogs are all about being free and public and transparent, while Gerson Lehrman makes its money from expensive and private and opaque information: putting investors in touch, one-on-one, with experts in their field.

Glick said, on the panel, that GLG's clients - the investors looking for specific information - do read blogs, and often approach GLG to ask if they can be put in touch with specific bloggers. GLG then approaches those bloggers, who then become not only bloggers but private consultants.

Once that's happened, the bloggers get an incentive to join in what is essentially a private GLG blogging system. GLG consultants, about 1,100 times per month, will write posts about their area of expertise, which are then distributed to GLG clients. If the idea in that post piques a client's interest, he can set up a phone call with the consultant, and have a conversation with the consultant.

Now in theory, there's no reason that those posts shouldn't appear on a public blog, instead of (or as well as) on the GLG system. But GLG's clients value non-public information: that's the driving force behind GLG. So if a blogger thinks that his insight might have value to a GLG client, he has an incentive to keep that insight relatively private, within the GLG network, rather than blogging it in public.

This is exciting and worrying in equal measure. It's exciting, because it's a compelling way in which bloggers can monetize their content without having to venture into the world of advertising. But it's worrying, because it gives bloggers (or some bloggers, anyway) an incentive not to blog their ideas in public.

Ultimately, though, I think it's more exciting than worrying. Consider the GLG client who is intrigued enough by a posted entry to want to set up a phone call. Would he prefer it if that entry were private rather than public? Yes. But if the entry is cross-posted on a public blog, I suspect the client will still end up ordering that phone call. If the original entry is public, it makes the value of a conversation maybe slightly less valuable, at the margin. But that public entry also makes the value of the blogger slightly more valuable, at the margin: it could end up with that blogger getting more clients down the road. So I have faith that GLG will be a good thing, not a bad thing, for the econoblogosphere.