Dave Sifry has issued his latest state of the blogosphere report and - surprise, surprise - the blogosphere is still growing. In fact, the blogosphere is doubling every five and a half months as a new blog is created a second. Technorati now tracks 27.2 million blogs and its blog finder has more than 850,000 blogs and 2,500 categories. It would also be interesting to see how Technorati's doing from a business perspective. It's tracking more blogs, getting more traffic (60% of it is spam pings, however) and solidifying its status as one of the blog search leaders. Does Technorati move to expand its strategic focus by acquiring an RSS reader or blog publisher? Or does Technorati get snapped up by someone looking for a bigger foothold in the blog search market such as Yahoo or Google? Given all the M&A activity (del.icio.us, Flickr, etc.), this is the year Technorati eats or get eaten.

With some time to digest FON's $21.7-million financing deal, here are some questions/issues that need to be highlighted-
1. How does a three-month-old start-up attract $21.7-million? As far as I can tell, the business model is, at best, uncertain because it hinges on the creation of a large enough Wi-Fi network to build awareness and a willingness by consumers to pay for broadband access. Martin Varsavsky has had some entrepreneurial successes in the past (Ya.com, JazzTel) but shouldn't FON have more than 3,000 beta users before it's able to do a major financing round?
2. Why did Google decide to invest? On one hand, Google has a vested interest in making sure it's easier for people to have broadband access, which drives traffic to Google properties. And Google's interest in Wi-Fi is well-known with its bid to build a Wi-Fi network in San Francisco and the sponsorship of a Wi-Fi network in New York City. But how does FON fit into Google's dark fiber acquisition activities and the speculated development of data centres in shipping containers? Then again, with more than $7-billion of cash, Google has the financial muscle to dabble to its heart's content.
3. Is FON just Skype for broadband? While there will be a lot of comparisons with Skype, there are some key differences. Skype is easier to adopt because users have motivation - free and super-cheap long-distance calls - to download the software. There's little pain in becoming a Skype user. FON is different because the decision to become part of the eco-system requires you to share your broadband access. I'm leery about sharing my broadband connection with anyone and everyone just so I can get Wi-Fi access away from home. It may work for mobile warriors but there's less incentive for people who mostly surf at home or at work, which makes it a different animal than Skype.
4. Does FON's business model make sense? Give FON credit for having a business model out of the gate but it hinges on having a big enough network to make it attractive for non-FON users to pay for access. I see this model as far less attractive than SkypeIn and SkypeOut.
5. Who Will Join the FON universe? Not sure but it won't be me. My Wi-Fi network is encrypted for a reason because I have no interest in sharing my broadband with my neighbours or Wi-Fi sniffers who may want to peek into my hard drive. The last thing I want is e-mail from my ISP asking why my traffic usage has shot through the roof, or a letter from the music industry telling me to stop using P2P services.
6. Why is there so much excitement about FON? It probably has more to do with the involvement of Google, Niklas Zennstrom, Janus Friis and Cisco's Mike Volpi, as well as an advisory team that includes Dan Gillmor and Ester Dyson than the business/opportunity itself. FON may become the Skype of broadband but I think FON is really an investment play by an entrepreneur who sees an opportunity to launch a disruptive service that could quickly create a lot of buzz. It's not unlike Skype, which went after the telecom industry and eventually got eBay to cough up $4.1-billion. FON probably sees the same chance to become a rebel in the broadband market. If it manages to attract 10s of thousands of users, maybe Google or eBay or a carrier will make a M&A bid.
7. How is FON different from LinSpot, which offers open up your Wi-Fi network for a fee? That's left to be seen. Linspot doesn't have FON's financial backing or connections but it's running in the same direction.
Any thoughts?
Update: Om Malik has a post on how a high-speed broadband service provider in Seattle, Speakeasy, has denied FON's claim they have an agreement. In fact, Speakeasy claims FON is replicating its strategy called NetShare in which individuals could generate revenue by sharing their wireless connections. Looks like a big P.R. fiasco for FON.