Six years on, the site projects $9.3 million in ad revenues for 2013. (Update: Henry B. wrote overnight that this figure was for 2012; I guess Auletta was interviewing Henry B in 2012, and their fabled fact checkers didn’t adjust the “this year” in Blodget’s quote.)

“That’s tiny. Ad rates are low. It’s tough to monetize,” says Blodget.

According to Comscore, BI has 9 million monthly US readers. (24 million global according to Google Analytics.) The rest of BI’s revenues (projected to total $11 million in 2013) come from conferences.

Anyone know how many editorial, sales and/or tech staff BI has these days? (Update: overnight Henry B. writes “~100.”)

At the time, both claims — that a) traditional publishing was doomed by people-published content and b) that blogging would be lucrative — seemed ludicrous. Shares in The New York Times were just a couple of months shy of their all-time high, $52. Martin Nisenholtz, then managing NYTimes.com, spoke for most media insiders when he dismissed the “weblog phenomenon” as nothing “fundamentally new in the news media.” Though blogs like PoliticalWire, GigOM, Dooce, Instapundit, Largehearted Boy, Kottke, MyDD, BuzzMachine, ObscureStore, Michelle Malkin and TalkingPointsMemo were already posting when I wrote in May of ’02, they were adless. Advertisers trusted only editor-vetted, publisher-backed articles appearing on sites run by august institutions like the New York Times and the Washington Post. Most of the blogosphere did not yet exist. Launch dates stretched into the future for DailyKos (6/02), Gawker (10/02), Towleroad (12/02), Gothamist (1/03), Power Line (1/03), RedState (11/03), Stereogum (11/03), Go Fug Yourself (7/04), ThinkProgress (12/04), Perez Hilton (2/05), SB Nation (03/05), Neatorama (04/05), TechCrunch (6/05), The Pioneer Woman (8/05), Concrete Loop (11/05), Media Takeout (1/06), Jack and Jill Politics (8/06), Flavorwire (11/06), The Blogess (6/07) and millions of smaller blogs.

I’m happy to say that many of those May, 2002 forecasts turned out to be correct. Unfortunately, the blog utopia I dreamed about is today polluted with bad writing, spam, barely disguised flogging and naked opportunism. My old predictions are bolded below, each followed by a current post-mortem.

#1 The networks of bloggers, the blogosphere, powers knowledge-sharing far more profound than anything offered by current media.

TRUE. Clearly the volume of self-published information erupting daily from millions of blogs is several orders of magnitude greater than traditional media can produce. And the intensity with which bloggers can go after a topic exceeds the persistence and massed institutional will of publications like the New York Times or the Financial Times or the Wall Street Journal. Bloggers have worked well together to untangle and crowdsource complex topics and news stories, each post linking to the previous blogger’s contribution and adding a tiny amount of new information, whether in unseating Dan Rather from his newsdesk at CBS or in defending Valerie Plame or in figuring out the twists of Johnny Depp’s latest movie or in deconstructing Greece’s bogus budgeteering.

My forecast fell far short of today’s reality, though, by not imagining that even bigger and faster networks for sharing and sorting information would soon emerge around the blogs — YouTube and Facebook and Twitter and Digg and Reddit and Pinterest and Stackoverflow and Instagram, to name just a few.

#2 The blogosphere will enable hundreds of thousands of new idea entrepreneurs to carve out local, ideological or conceptual niches and make a living.

TRUE. Blogs have spawned vigorous self-publishing enterprises, many of which — GigaOM, PerezHilton, Gawker, DailyKos, TalkingPointsmemo, SportsblogsNation — have grown to be mini-empires of their own. By lowering the cost of publishing and tapping into individuals’ raw talents and passions, publishing niches and niches within publishing niches have proliferated. We’ve drilled steadily downward: from mommy blogs to mommy cooking blogs to vegan mommy cooking blogs… dozens of them. Still, sadly, I doubt that we’ve got millions of self-supporting bloggers.

#3 Bloggers are the ultimate speculators! At least 80% of any media organization’s revenues are spent on “overhead” — the executive parking garages, broadcast towers, helpful distribution unions, wood pulpers and stolid German makers of printing presses as big as the Super Dome. Take these costs out of media and you slash the tax on writing — the number of writing jobs and the amount of quality content will rocket.

TRUE. Content volume and categories have grown exponentially, with whole a new industry emerging to keep track of what all these individuals are creating. But if the amount of quality content has rocketed, the quantity of nonquality content has grown even faster. I did not come close to anticipating that the new metastatic branches the PR industry would sprout to give free products to bloggers — from diapers to junkets to electronics to tickets — to try to influence blogger opinions, essentially wiping away a century-old firewall between editorial and advertising.

#4 If the soloists outnumber the orchestra, who conducts? [Economist] James D. Miller argues that a blogging boom will self-destruct. “The proliferation of blogging sites makes it especially difficult for consumers to know which bloggers they would find interesting,” he writes. But Miller’s Malthusian view of blogging focuses exclusively on the blogger’s role in producing words, which is obviously only part of the equation. First, each blogger reads five to 25 other blogs, more than offsetting any word-supply she generates. Second, she evaluates the blogs, recommending a few, ignoring most. So a new blogger is a net contributor of order rather than noise to the blogosphere.

TRUE. The world has not yet drowned in bloggers’ output. If anything, it’s easier to find information today than it was ten years ago. Part of this order results from technology — we’ve got lots of new tools for filtering. But we’re also benefiting from the fact that almost everyone online is doing some amount of curating, masticating giant mounds of information into snackable nutritious infonuggets.

#5 What happens when we have 73 blogs about Wooster, red blogs, prose blogs, gun blogs, ska blogs, braless blogs, blog blogs, bong blogs, 29,471 Boston blogs, when we have three blogs for anyone who thinks for a living or lives for thinking: a blog for work, a blog for play and blog for family?

UNTRUE. Blogs are not ubiquitous, and very few people have three blogs. But the blogging spirit is bigger than ever. Most of us have happily settled for microblogging small imperfect fragments of life, documenting with a button push rather than an entire polished essay: a misspelled one-liner to Twitter, a grainy photo to Instagram, a quick upvote to someone else’s headline posted to Reddit.

#6 What is new is the blogosphere, the endless and (physically) effortless networking of conversations. … As an information processor, the blogosphere superfluizes old media’s expensive and carefully constructed infrastructures and franchises. Suddenly, Vivendi, AOL-Time Warner, EMAP and Newscorp are factories whose economies of scale are swamped by infinity, networks that have come unplugged, refrigerator salesmen trudging into the next ice age.

TRUE. TRUE. TRUE. While some traditional publishers are still going strong — Newscorp shares traded at $15 then and $20 today — many are dead or on life-support or seeking to reinvent themselves as curates of blogs and other micro-content. NYTCO shares have fallen from $50 in May of 2002 to $6.50 today. McClatchy shares, trading at $60 in 2002, are now at $2.20. The Sun Times media group is bankrupt. These graphs say it all. And even giant ad agencies are being disrupted as traditional publishers are replaced by a more efficient social media ecosystem.

#7 The old economics of media – he who controls distribution wins the most readers and serves advertisers best – will be plowed under by a new economics – she who relates best attracts the most valuable audience. (Since relate means connect and tell.)

OFTEN UNTRUE: While we’ve seen that great writing can thrive online, the unrelenting output of the likes of HuffingtonPost proves daily that mass-produced, SEO-optimized crud too often overwhelms the thoughtful work of bloggers with passionate audiences.

#8 The metrics do not yet exist to describe the blogosphere’s commercial potential.

STILL TRUE, SADLY. I’m surprised to say that, ten years on, its still difficult to convince most advertisers that blogs are uniquely valuable. Ad buyers are more focused than ever on simple metrics like cost-per-click and cost-per-acquisition. Ad buyers are too easily swayed by a publisher’s gift of Yankees tickets or Fry boots. Most advertisers do not yet value a blogger’s intimate connection to her/his readers and the overarching value of a blog community’s awareness of a new idea or brand.

#9 The blogosphere’s self-organized networks offer adventurous advertisers the opportunity to target unique and previously unarticulated demographics. Advertising in a blog or blogset will enable an advertiser quickly to communicate with a critical mass of thinkers. … In the beginning, blog advertising will likely be P2P. Ken Layne could sell Dot.con. Glenn Reynolds could sell baseball hats. Tony Pierce could point to his E-Bayed molars, or whatever other teeth he loses. Amy Langfield may promote the 9/11 book. Matt Drudge could sell autographed photos or Tshirts. Many Blogads may be traded gratis among friends. It will be a long haul. Slowly, critical mass will build. New ad classifications will emerge. New demographics will cohere. Companies will be invented to fill new niches.

UNTRUE. Most big blogs today thrive on advertising bought by mass market companies — movies, autos, technology, softdrinks. Niche advertisers — whether local candidates or teeshirt vendors or gardening tool craftspeople — focus on buying highly targeted CPC ads on Google or Facebook.

#10 There are, beyond money, other benefits to creating a blog advertising idiom. Establishing a clear space and format for advertising will clarify what is flogging and what is blogging.

TRUE. But true not enough. Too often, particularly on small blogs, advertising is indistinguishable from editorial.

#11 Eventually, a sufficient density of local blogs could make Blogads an effective tool for selling local goods and services.

UNTRUE, so far. Local blogging has not yet reached sufficient mass to become economically viable or useful to advertisers. And advertisers’ ability to use other ad mechanisms to target niche audiences in tightly defined geographic areas — for example, using CPC Facebook ads to only target women in their twenties in the Cincinatti area — makes ads on local blogs uncompetitive in most instances. Some ad networks now exist that can target specific voters.

#12 To close, I will wager $1000 that on May 25, 2007 there will be more Blogads than NYTimes.com classified ads or that NYTimes.com will be using Blogads. Ready to bet, Martin? (Yes, the winnings will go to the Blog Foundation.)

UNTRUE: Good thing Nisenholtz didn’t take me up that bet. NYT’s classified business was still going strong… in 2007.

Atlanta — “The Big Peach,” “Hotlanta,” “ATL” — is a straight shot down 85 from our headquarters in Carrboro, NC. It’s the home of multinational corporations like Coca-Cola, Turner, Delta, and UPS, and it’s one of the fastest growing cities in the South. So it’s no surprise that the “New York of the South” has so many great advertising agencies, pumping some of the best campaigns on the East Coast.

Today, in the final installment of our series, we look at the work of four Atlanta-based agencies that made it to iMedia’s East Coast Agencies to Watch list, and which are not headquartered in New York City. (Part 1 | Part 2)

IQ – US Department of Energy “Lose the Excuse”

IQ has a penchant for fun videos and kick-ass web sites. For the “Lost Your Excuse” campaign, the US Department of Energy got both. Along with partner-agency Goodby, Silverstein & Partners, IQ built a media-rich offbeat site that shows kids how easy it is to save energy. Check out Baron Davis’s hilarious cameo in the “Malcolm” video. Makes you wanna change your light bulbs, doesn’t he?

22squared- Red Brick Brewing “Beer From Around Here”

How do you make an amazing advertising campaign for a local brewery that doesn’t have an amazing advertising budget? You make the packaging the ads.

22squared played up to the sense of pride that comes with living in the “New South” with the “Beer from Around Here” campaign for Red Brick Brewing, which is distributed exclusively in the Southeast. Check out this case study video to see how 22squared set Red Brick apart from beer made where people say “you all.”

THINK Interactive, Inc. – Nutro “Know Your Small Breed”

So you want a dog that’s loyal and playful, clever yet obedient. Why, that sounds like the Japanese Chin. How do I know? I used Nutro’s “Know Your Small Breed” tool, developed by Atlanta agency THINK inc. Because “it’s fun to market to dog parents,” Nutro let THINK have a lot of fun with their site and strategy, including an app that lets you tell your  Facebook friends what breed of dog you wish they were.

image via thinkinc.com

three squared – The Weather Channel “Extreme Weather Driving Challenge”

image via threesquared.com

We’ve dug into iMedia’s East Coast Agencies to Watch to find the best ad work outside of New York. In part 1, we looked at great campaigns from agencies in Washington, DC and Boston. Today, we avoid 95 altogether to check out two of New England’s top agencies.

Humongo (Danbury, CT) – ECKO UNLTD. “Indie for Life”

You may already know Humongo’s founder Darryl Ohrt for his industry blog brandflakesforbreakfast. Ecko turned to Darryl’s shop to get fans excited about its UNLTD watches this year. The campaign, “Indie for Life,” includes an incentive-heavy Facebook page with a series of live video interviews with indie entrepreneurs called ‘The Marc Ecko Time Chamber.'” The first interview is with “indie time-changer” Tony Hsieh, founder of Zappos.com.

Mullen (Boston, MA)

Mullen, whose motto is “advertising unbound,” finds itself in industry headlines so often you might assume they’re in New York. The quirky Boston agency made then news earlier this year when Barnes & Noble hired them to reinvent the bookseller for the digital age, and more recently for the latest work they’ve done for Zappos, which features nude women in public places.

Tanzina Vega wrote in the New York Times that Zappos is hoping its customers will notice the QR codes (not pictured in mock-up above), which turns the women in the ads into virtual paper dolls:

When scanned by a smartphone, the codes will take the phone user to a mobile site featuring fictional videos of what happens to the naked women in the ads. Users can also select outfits for the model to wear and can enter the Zappos mobile site to buy the items on the smartphone.

Today you can find a naked man running around Yahoo!

In sports, they call it East Coast Bias. It’s the extra weight and attention teams on the East Coast get in sports coverage. But as east-coasters who aren’t in New York, we know that “East Coast” bias is really “New York bias.”

When iMedia released its list of 25 East Coast Agencies to Watch, nearly half of the honorees were in New York, and another quarter of them were based in the Midwest. So we thought it would nice to shed some light on the rest of the list, our fellow-east coasters who are working on some great stuff outside of the Big Apple.

In the first of three installments, we take 95 from Boston to DC, bypassing New York City on the way. OK, we cut through the Bronx.

Arnold Worldwide (Boston) – Jack Daniels “Independence”

This beautiful mini-doc is just one of four prongs of Arnold’s “Independence” campaign, which focuses on Jack Daniel’s independent spirt craftsmanship. In addition to this video is a TV spot called “As American As,” which likens Jack to many other great American innovations, a set of 10 original letterpress posters from Yee-Haw Industries, and a Facebook app that allows you to consume and share everything but the Whiskey itself.

As Dabitch sees it, this All-American campaign is all about love: “Forget the latest digital hype, some things are made with love the same way they were made so many years ago.”

Carousel30 (Washington, DC) – International Year of Forests

The United Nations declared 2011 the International Year of Forests. The National Association of State Foresters (NASF) tapped DC-based agency Carousel30, who had previously worked on the Nature Conservancy’s “Don’t Move the Firewood” campaign, to build the US site and spread the message across social media channels. While the message is serious, the campaign carries a positive message, “Celebrate Forests. Celebrate Life.”  Thanks to Carousel30, getting involved with this great cause is “as simple as 1, 2, tree.”

Or at least won’t dislodge Facebook anytime soon.

First, let’s stipulate that the Google+’s technology is cool and powerful. Former NYT tech journalist Jennifer 8 Lee says “Face­book should be scared.” Over at PC World, Mark Sullivan offers “9 Reasons to Switch from Facebook to Google+.” (Here’s a video intro to Google+ if you’re interested.)

News maven Jeff Jarvis enumerates the features he thinks will make Google+ an important journalistic tool.

Jason Calacanis, the entrepreneur behind WeblogsInc and Mahalo, argues that Google+ will take “half the market” for social networking from Facebook. “Google+ will compete with Facebook as effectively as Android is competing with the iPhone.”

To prove his point, Jason highlights a number of Google+ features that beat Facebook’s — features like “Forced categorization of contacts” and “Chrome Browser and Chrome Store integration” and “Android integration.”

And with more than 200 million deeply invested Gmail users, Google would seem to have a powerful launch pad.

So if Google+’s technology is brilliant, its userbase is deep, Facebook’s functionality is flawed and all the pundits are convinced Google will romp, why am I confident that Google+ will fail to beat Facebook?

Because in their Google worship and/or their focus on comparing features, the pundits are forgetting tried and true axioms about how humans adopt technology, axioms documented decades ago by tech visionaries like Gordon Moore and Clayton Christensen. Here’s my rundown.

1) Even the best carpenter can’t build a tree. Though Google+ is an elegant piece of engineering, it’s not a social network. Jason and Jeff love Google’s technical innovations. Sure, normal technology thrives because of technical brilliance, design beauty and marketing megatonnage. But social networks are affected only marginally by those factors.

Instead, in social networks, the users are the product. Users’ habits and passions and commitments to each other are the life-force that makes a social network grow. Just as you can’t build a tree from a bunch of boards, you never could have constructed Facebook or Twitter or eBay or LinkedIn or Wikipedia top-down with a bunch of prefab components. Launching with one hundred million users or a $100 million marketing budget would have more likely killed those sites, not grown them. (One advantage Google WILL have, at least initially, is fewer bimbots than Facebook.)

2) Wrong launch users. Passionate persistent users, not brilliant designers or programmers or professional commentators, build social networks. Google+ is launching with a diffuse cloud of alpha-tester geekerati who view Google+ as a feature set to be explored, tested and rated. Having the attention span and loyalty of fleas, this jittery crowd will migrate onward within weeks to the next hot-smelling technology that swaggers into view.

Beyond sharing a common identity as “early adopters,” members of this crowd don’t (usually) care deeply about each other or share a common passion beyond a burning desire be first in using a technology. They’re users, not community members.

Google’s diffuse-by-invites strategy works fine for a tool like Gmail, which is evaluated purely as a feature set, but it won’t work for Google+. Evidence: my friend Dan Gilmore, who as an innovator and former reporter for San Jose Mercury News should have more Google+ connections than anybody, went onto Facebook to look for friends who might also be using Google+. With no luck.

It doesn’t matter to you if 1 million or even 100 million people are using a social network, if only one of your 20 key colleagues and friends are using it. With social networks, it takes at least three to tango.

3) Diffuse launch path. Social networks can ONLY start small and tight with a set of enmeshed users, then percolate slowly outward. Facebook started in a Harvard dorm, then spread across Harvard, then to Stanford, Columbia and Yale. Then other Ivy League schools. Then colleges across the US. Then high schools. Then Microsoft and Apple. Only then, 30 months after launch, was Facebook opened up to everyone.

Likewise, Twitter started with messages between Biz Stone, Ev Williams and Jack Dorsey and their friends in San Francisco in March of 2003. It percolated there for a year, before expanding in March of 2007 into the tightly networked SXSW crowd, folks who were hungery for a way to recreate and sustain their SXSW friendships when they left Austin. That crowd, in turn, evangelized to their social network savvy friends at businesses across the US.

For both Facebook and Twitter, initial users were tightly networked. There was a strong sense of clubbiness among community members through a long initial phase. Those members’ loyalty to the club withstood even repeated outages (on the part of Twitter) and privacy concerns (on the part of Facebook) that would have doomed a normal technology product.

4) Noisy feedback loops. One of the key reasons that launching big is fatal to social networks is because the feedback loop from users to designers to users to progammers to management to newbs to old-timers to programmers gets cluttered with noise. When a tool launches big, its designers end up trying to build a feature set that satisfies all communities — or their own peculiar whims. Most users end up with a luke-warm affection for the service. There’s no ‘sponsor’ community to advocate change or evangelize.

MIT professor Eric Von Hippel has amply documented the importance of users in driving innovation in technology domains as diverse as thermoplastics, semi-conductors and scientific instruments. Is there any doubt that user innovation would be even more crucial in shaping social networks, where the user and the product are so closely entwined, functioning as two ends of the same biocyber synapse?

Rather than launching big and broad, far better to build a “small” tool for one passionate community. Once the kinks get worked out, this template of technology and usage patterns later gets adopted/adapted by other adjacent communities. Using this approach, people like to feel they’re in a human-sized space in which their actions matter, in which their feedback into the system gets processed and used. (Gordon Moore’s book Crossing the Chasm is awesome about this process.)

(It’s worth noting that Robert Scoble thinks Google+ is just for geeks and will survive by serving that market alone. I think geeks don’t just want to socialize with geeks… for long.)

5) Professional managers. Successful social networks evolve over time, often blossoming out of series of random, non-linear, unpredictable connections and chemistry. In retrospect, the winner’s strategy looks obvious (read Duncan Watts’ book!), but at any given moment, it is impossible to determine what feature set or user base will drive the coming decade’s NEXT dominant social network.

Professional managers, particularly of software projects, can’t tolerate this kind of nonlinear growth. In his post about Google+, Jason notes that he wrongly predicted huge success for Wave, Google’s previous attempt at social software launched with great fanfare two years ago, because Google ultimately stopped devoting resources to Wave. Why should things be different this time? Google is a big public company that needs high-profile successes not meandering muddles that may eventually pay off. This means Google will likely give up on Google+ before it can take root, just like it killed Wave. Clayton Christensen’s brillian book Innovator’s Dilemma gives the playbook.

6) No culture. Starting big and broad also kills the chance for a social network to develop a distinctive culture. This is crucial because a great social network is known by its culture, its lingo, its behaviors, its taboos, its history. Some examples:

Overwhelmed by the volume of information flowing from Twitter, Tweeters (not Twitter) created hashtags to keep track of ideas.

Back in 2004, the liberal blog DailyKos was playing a key role in narrating and steering the Democratic party’s primaries. The site was getting lots of favorable press, and I asked Markos Moulitsas, the community’s creator and curator, whether this attention was having a big positive impact on the community. On the contrary, Markos replied. Every time there was big press about the site, the community would flood with new users who didn’t get the site’s culture. Traffic would spike briefly, but interaction quality would plummet. A big gush of new members busted the site’s chemistry. Then DailyKos would shrink back to its previuos size and start growing organically again. Since then, the Kos community’s richness has spawned its own yearly convention.

(Another example of Kossite culture: to this day, a novel ad campaign can’t run on DailyKos without invoking communal cries of “pie fight,” an insider reference to an infamous, bodacious 2005 ad campaign by Turner Broadcast for a Gilligan’s Island reality show.)

For another example of how growth can kill a social network’s culture, look no further than the Q&A community Quora‘s explosion/implosion early this year. Once a steadily growing service, rich with VC and tech insiders, Quora suddenly went viral in January. New users flooded into the service and quality of interactions plummeted. Despite lots of agonizing over how to sustain the growth, http://quorareview.com/2011/01/27/evolving-quoras-design-for-growth/ the site has fallen back to earth.

In contrast, the Q&A service Stackoverflow, which is tightly focused on serving specific communities and growing organically for the last three years , has overtaken Quora. Notice in the Google trends graph for the two services that Quora has gotten a huge amount of press (bottom trend box), but Stackoverflow is now far bigger.

Am I a Luddite or Google-hater? Judge for yourself. I started tweeting in March of ’07. I was LinkedIn’s 4,154th user. I even own a few Google shares — their ad business is a money-printing machine.

Summing up: Google’s great at carpentry. Gardening, not so much.