If you don’t read Felix Salmon’s blog on Portfolio.com, you should. Not only can you get your recommended daily intake of financial market acronyms in an easily digestible form, you also get Felix’s insight into blogonomics. Today he has a nice post in response to a reactionary article in the NY Times about bloggers having heart-attacks. Basically, as in any other profession, some bloggers are workaholics, and some of them worked themselves to death. Somehow the NYT thinks that blogs are special and this is news.

Anyways, Felix gives some analysis of what really matters in terms of bloggers’ incentives to publish breaking news quickly. As a paid blogger, Felix obviously knows what he’s talking about. Definitely worth a read.

A couple of interesting articles for weekend reading, about competition in the blogosphere:

Wired on Engadget vs Gizmodo.

NY Times on PaidContent vs TechCrunch.

The thing that really stands out, especially from the Wired article, is the intensity of competition. If blogs were characterised by strong network effects, this could be seen as competition “for” the market, with each blog hoping to emerge as the winner later. But I don’t think network effects are that strong in blogs. Just as multiple newspapers can survive, so can multiple blogs. This suggests that the competition is more like good old fashioned horizontal competition. Strong horizontal competition usually means low profits. That’s great for consumers, and bad for investors.

In a comment on my previous post about TipJoy, Rob Elliot makes a very interesting point:

This can have a detrimental effect on your “academic credibility”. Do you really want your students or indeed bosses to see you begging for money on the internet to supplement your salary?

Perhaps I’m naive, but this is something that I hadn’t thought of before. Does asking for tips make you think less of me? If I had ads instead of tips, would you feel the same? I’d be really interested to get any comments on this.

I’ve received $1.50 in TipJoy tips in only a couple of days — thanks! The only problem is, this is all virtual money at the moment, as none of the tippers have actually paid up. TipJoy lets tippers run up a debt and then pay later when the total gets to a reasonable amount like $5.

However, at the default of 10c per tip, it takes 50 tips to get to $5. At present, there are very few blogs and websites in the TipJoy network, so if the opportunities for people to leave tips are few, it’ll take a very long time for me to get paid, and virtual tips do not make me nearly so happy as actual cash. TipJoy does let you tip any website that you like, but the site owner only gets paid if they claim their tip, so I doubt that people will tip many sites that don’t specifically have the tip buttons. So I think there is a clear network effect here. TipJoy makes tipping very easy, but to get paid within a reasonable time, the TipJoy network of blogs and websites needs to be fairly large so that the frequency of tipping by tippers is reasonably high. The bigger the network, the more valuable it is to members.

Therefore I am calling on all econ (and other) bloggers: Add TipJoy to your site! If everyone does so, it’ll be more valuable to all of us.

On a practical note, I am wondering about the ability of ad-supported websites to join a tipping system. Does the contract with advertisers prohibit it?

Thanks to everyone who participated in my experiment by clicking the shiny green buttons. After stripping out search engine spiders and people who clicked multiple buttons, I received 154 “tips” over the 11 blog posts that I ran the experiment on. The total amount tipped was $38.21, or $3.47 per post. However, the posts were on the site for varying amounts of time, and older posts obviously tended to receive more tips. The median tips per day per post was 91 cents and the average was $1.08. Total tips per day were around $5. Over a year, that’s some nice beer money, and a lot more than I was making with Adsense.

The median across all tips was 10 cents, and the average was 25 cents (so the distribution is quite skewed). Here’s the distribution of all tips across the five amounts that were allowed:

Clearly more people tend to tip at the smaller amounts. However the spike at 25c is possibly interesting (or maybe just a statistical anomaly, I’m not sure). What is also interesting is that most of the revenues come from the bigger tips — demand seems to be quite price inelastic:

On a per-post basis, like I said above, the varying lengths of time makes comparisons across posts difficult. Comparing revenues per post per day shows a wide range, from 38 cents to $2.20:

Overall, I think it was an interesting experiment. I’ve now added TipJoy to all posts on my blog, so I’ll be seeing how actual tips compare to the data from this experiment. Very unfortunately, TipJoy doesn’t seem to work in RSS yet. So if you want to leave a tip, you’ll have to click back to the original blog post first.