The news is the B5media has secured $2 million in equity financing from two VC firms. As Ankit has pointed out, this shows that blog networks are viable business and investment opportunities.
However, the question is not what B5media got. The question is what will the network do with the money. This is what Duncan had to say;
The money allows us to more aggressively build network into more categories. We planning on using [sic.] this money to better support our existing bloggers and recruit new bloggers in a wider array of categories. The funding also allows us to build up our ad sales team, a critical move toward giving our new investors the return we are all expecting to achieve.
So is that the amount of money required to compensate the existing bloggers, recruiting new bloggers and building an ad sales team? If you asked me, I would say that given the operational costs of a network such a B5media, $2 million is a hell lot of money for an already established blog network.
I might be jumping the gun here, but I have this gut feeling that the B5media honchos are looking for an exit strategy. ;-)
