Three weeks ago, I wrote a posting about the need for a tool to find the best blogs. Some of the feedback included Blogshares, Technorati and the belief that blogrolling eventually allows the cream to rise to the top. Along the way, I have also checked out places like Blogdex and Daypop. Blogdex, a project of the MIT Media Laboratory, is intriguing because its ranking formula is based on the idea that the "links made by bloggers as a proxy to the things they are talking about", which sounds like a Google-like methodology. The search for the ultimate blog tool may be a Don Quixote-like quest but I'm getting closer, or at least I'm discovering lots of interesting ideas in different places that could be incorporated and integrated to create something amazingly useful.
Of course, once you get there how do you make money doing it? From what I've seen, no one seems to have a compelling business model. Take Technorati, for example. It has some AdSense boxes but how is it generating other money? There are no users fees or no banner ads, and as far as I can tell its search technology isn't being licensed. Nevertheless, Technorati reportedly attracted $6.5 million of venture capital last summer. My take is the blog tools market is cool, popular and newsworthy but still very immature as a real business. The financial "action" is more focused on M&As than revenue and profits. Look at how Bloglines was acquired by Ask Jeeves. Essentially, Bloglines had its R&D funded by a search engine looking to expand its user base and technology portfolio. Bloglines wasn't generating much revenue but it was an attractive property for someone looking for IP and entry into a new and growing sector. The same financial formula could probably be applied to popular blog tools such as Feedster, which is ripe for an acquisition bid by a suitor looking for technology and lots of users.
This isn't to say I'm discouraged in my quest for the Ultimate Blog Tool (UBT®!). It may be out there somewhere - perhaps in a programmer's basement or Google's skunk works - but sooner or later it will appear.