June 26, 2009
Mary Duan, Silicon Valley/San Jose Business Journal

REDWOOD CITY — In 2005, Lisa Stone, Elisa Camahort Page and Jory Des Jardins were three self-described “chicks with credit cards” who set out to answer the question posed by a Washington Monthly writer: Where are all the women bloggers?

Stone, the first Internet journalist awarded a Neiman fellowship by Harvard University; Page, a marketing executive and business blogger; and Des Jardins, a writer and media strategist, knew the women were out there. So the “chicks” used their credit cards to rent out some space at the TechMart in Santa Clara and formed BlogHer LLC with the idea of holding a conference for women bloggers.

What started as a single conference with 300 attendees has become a series that routinely sells out, a network of 2,500 bloggers that enables participants to generate revenue through advertising, and a venture-backed company with 30 employees that just raised its third round of funding and is shooting for profitability by 2010.

Redwood City-based BlogHer has raised $15.5 million, including a Series C round of $7 million in May. Azure Capital Partners joined Venrock and Peacock Equity, an NBC Universal fund, in the third round, which Stone said would be used to build more tools to help women bloggers make money and invest in better research and advertising technology.

“We bootstrapped and then we had two painful years. We had major sponsors who said we love you, but we need you to be bigger,” Stone said. “We needed to become a nice little conference or we needed to grow.”

They’ve been able to grow through the fundamental understanding of a few basic facts: women control 83 percent of household dollars, and thanks to the economy, they’re now thinking more about how and where to spend that money, the company says.

Reaching 15 million women a month

BlogHer reaches 15 million women a month, Stone said. For its network, the company takes 10 percent off the top from an advertiser, and splits the remaining 90 percent with bloggers who feature a company’s ads.

Contributors to the BlogHer site earn $50 a post.

“What we have always tried to do is put the user first. We designed BlogHer around what she wanted to do and gave her a way to take it to market,” Stone said. “We have an understanding of what the female consumer wants and developed a way for marketers to work with her.”

One such blogger, Gia Lipa, writes about personal finance at the sites thedigeratilife.com and thesmarterwallet.com under the moniker “Silicon Valley Blogger.” Lipa said she now makes more as a blogger than she did as a software engineer with 18 years in high tech.

“I have investigated other networks, and I think BlogHer has pretty good payouts and they have a lot of content that is very empowering,” Lipa said. “People are hungry for information.”

David Siminoff, a BlogHer board member and investor, was introduced to BlogHer’s management team by venture capitalist Ann Winblad. In less than a week, he had drawn up a term sheet and gave “the gals,” as he calls them, their first venture investment.

“I liked the story. I knew BlogHer would fill a hole being created in the ecosystem,” Siminoff said.

The biggest early challenge was that the management team wasn’t made up of technical people, he said.

“It was a bad news, good news story. The bad news is that it was an ugly site, but the good news was they had all this traffic and passion,” Siminoff said. “They’ve become a brand on the Web and will continue growing big.”

Mike Kwatinetz, founding general partner at Azure Capital Partners, said the key to a successful online business is finding a consistent, relevant way to serve the needs of its targeted customers.

BlogHer is “laser focused” on its customers, he said.

“That focus is what’s helped the company show continued growth and momentum via reach and revenue, even as new social media phenomena have joined the scene, such as Facebook and Twitter,” Kwatinetz said. “We think BlogHer’s on track to continue to innovate in this space.”

Jeremiah Owyang, a social computing and interactive marketing analyst with Forrester Research, said BlogHer’s bloggers are very influential because so many brands are trying to reach women online.

Owyang said that BlogHer must keep up the level of transparency it’s now established in defining “sponsored conversations,” a technique in which marketers provide financial or material compensation to bloggers in exchange for their posting content about a brand, according to a recently released study by Forrester.