Federated Media Publishing is looking for a new leader. In a blog post today, founder John Battelle says after four years he is conducting an executive search to find somebody to “take it to the next level.” The blog advertising network is trying to branch out into something called “conversational marketing,” which it is also trying at the same time to invent. After shopping the company around last year and not finding a buyer willing to pay his price, Battelle decided to raise $50 million instead.

With those investors comes pressures for growth and profits. Battelle claims once wrote that he finds the prospect of making ” lots and lots of money . . . uninteresting,” and quotes himself saying so in today’s post. Now, as he notes in the comments, he says that “there is almost nothing I find uninteresting about running FM”. But he realizes it is time to step down, though he writes that he will still be deeply involved with his baby in other ways such as bringing in advertising clients. He also offers these tidbits about FM’s business. It made nearly $40 million in revenues in its third year, 2007 2008. Update: Battelle was referring to 2008 when he mentioned the company’s third year, though this was ambiguous in the post. → Read More

After turning down a $100 million buyout offer, Federated Media Publishing has opted instead to raise $50 million in a C round led by Oak Investment Partners. As was reported two weeks ago, the rumored valuation is $200 million. While the company is not confirming that number, publisher Chas Edwards quips, “We have to be worth at least $101 million.” Federated Media acts as the advertising salesforce for about 150 blogs and dozens of online media properties with a collective audience of 50 million people a month. Its blog partners include Boing Boing, GigaOm, Ars Technica, Silicon Alley Insider, and TechCrunch. It even sells ads for video blogs like AskANinja and on some Facebook apps, such as Graffiti and Watercooler. A Tidy Advertising Business . . . In 2007, according to Edwards, Federated Media sold $22 million worth of ads across its network, up from $4 million in 2006. It generally splits the ad revenues with publishers, taking 40 percent for itself. Edwards says that Federated Media is able to command between $10 and $25 per 1,000 impressions (CPMs) for the ads it places on the blogs it works with (and $6 to $12 CPMs on its Facebook apps, which is very high for social-network inventory). Edwards says Federated Media has been cash-flow positive for more than a year and EBITDA-positive since September, 2007. The blog advertising network previously raised a total of $7.5 million. . . . or a Blog-By-Night Network? The issue, though, is that unlike a traditional media company where content and publishing are under the same roof, FM does not control the sites for which it sells ads. And there is no lack of ad networks that big blogs can work with. Even Technorati is hoping to turn itself into an ad network for blogs. In order to tie its partner sites closer to Federated Media, we’ve suggested before that the company could use this new cash to buy guaranteed ad inventory on the blogs in its network, or buy some of those blogs outright. But Edwards tells me Federated Media will not guarantee advertising under any circumstances, and is unlikely to buy any partner blogs: Let’s say we bought all the sites that are part of FM. If we don’t deliver value they can walk away. The stability of our relationship with content creators will come from the value we create every day, not from → Read More