Pajamas Media fallout gets nasty: bloggers accused of accepting welfare

The fallout from the announced closure of the Pajamas Media blog advertising network has turned soured, not helped by a CEO who claims the company provided bloggers welfare.

CEO Roger L. Simon, not taking the negative reaction well, lashed out at complaining bloggers (via Donklephant):

Actually that part of our business has been losing money from the beginning, so the people getting their quarterly checks from PJM were getting a form of stipend from us in the hopes that advertisers would start to cotton to blogs and we could possibly make a profit. Didn’t happen. No wonder those people are kicking and screaming now that they are off the dole. I might too. [What’s their beef? I thought most of them were free marketeer libertarians or something.-ed. Go figure.]

Emphasis is mine, but it’s the key line.

Dan Collins at Protein Wisdom responds:

Here’s the thing, Roger: you never once told us that the blog network you kept insisting was the next great thing “has been losing money from the beginning” — at least, not to our faces, and certainly not in any way that would suggest that you were carrying us like welfare recipients.
And really, if that was truly the case, why not let us know and offer us a chance out of contracts rather than blow sunshine up our asses? And don’t tell me you were keeping us on out of the goodness of your heart, either. Because there’s simply no way a big businessman like you would feel the tug of conscience. It’s all about the bottom line, after all.

The fact is, Roger, not everyone was given millions of dollars of venture capital to blow through. So before you go comparing people YOU SOLICITED TO JOIN YOUR ORGANIZATION to people taking welfare (you ever try paying a hooker with food stamps?), you might want to think about where it is “your” money is coming from.

It’s a bizarre turn of events, and Simon seems to be making matters worse. Pajamas Media was set up as a blog advertising network, and the content came later; that from day one it’s never made a cent from the advertising efforts brings into serious question exactly what the business was doing to lose the money to begin with, particularly when things in the industry were still good.

The other missing piece is why didn’t Pajamas Media try and make the ad network work? $3-$7 CPM is the rates mentioned for the network, but the flaw from what I can gather is how they offered it: on set inventory, paying out even when advertisers weren’t available. That’s the mistake (and why you see so many Pajamas Media house ads on member sites). Glam use to offer something similar, but in the last 12 months have amended contracts to back out of the commitment, so that mostly they’re only offering high rates when the ads are there; why didn’t Pajamas do that? Sure, bloggers may not have appreciated a pay cut either, but it would have been the sensible direction as the ad market dried up.

The other question is why close it and not offload it? That network had value, and managed properly, would have provided value to another company. No doubt some ad networks are already circling looking to sign up new blogs, but they could have walked away and said “we’re letting someone else have a shot.”

As I’ve said already: it’s all a bit bizarre, and Simon is quickly losing friends in the conservative blogosphere, people he’d really still need some level of support from to help promote Pajamas Media TV.