Deborah Yao of the AP reports:

Many bloggers have accepted perks such as free laptops, trips to Europe, $500 gift cards or even thousands of dollars for a 200-word post. Bloggers vary in how they disclose such freebies, if they do so at all. 

The practice has grown to the degree that the Federal Trade Commission is paying attention. New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest.

It would be the first time the FTC tries to patrol systematically what bloggers say and do online. The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.

“If you walk into a department store, you know the (sales) clerk is a clerk,” said Rich Cleland, assistant director in the FTC’s division of advertising practices. “Online, if you think that somebody is providing you with independent advice and … they have an economic motive for what they’re saying, that’s information a consumer should know.”

Marking “in kind” advertising clearly will not only be a huge boon for the public. If bloggers are to make a living from advertising, transparency and full disclosure are essential.

This could be bad news for players like Payperpost.com.

Here’s a link to the full FTC proposed guidelines.

AP reports: “While most of the erosion was concentrated in the Times Co.’s newspapers, its Internet ad revenue also sagged by 8 percent, or $3.6 million.”

The online advertising pie is still growing slightly even in the recession, but the number of publishers with forks is growing much faster.

Two other blog advertising competitors bow out without so much as a whimper:

Back when the election season first started I joined MSNBC Politics advertising network. They promised fifty five cents per one thousand impressions and they delivered. As soon as the election was over they quit advertising on my site without explanation. I finally contacted them and they gave a poor explanation that their company was going in a different direction now that the political season was over. I also joined the Buzzlogic advertising network in their beta period. They promised two dollars per one thousand impressions and they delivered as well, until this month. I basically got the same explanation as I got from MSNBC’s network. They won’t be advertising with us in the near future.

Did Pajamas’ CEO Roger Simon really say the following?

Actually that part of our business [ad sales] 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.

And he then removed the post? Which is worst?

(Simon quoted in the The Village Voice.)

Roger’s post is live again with a kinda apology. “I’m sorry if people found the word ]dole’ insulting. I didn’t intend it that way.”

This is old news, but worth chronicling for the record.

Earlier this month, Politicker, a network of state political blogs funded by NY Observer owner Jared Kushner, amputated most of its sites, leaving on a rump focused on NY and NJ.

Someone near the scene told me that almost 40 people are out of work, a quarter of that in IT. More than $4 million down the rat hole. Any confirmation or other details out there?

Blogads.com’s first competitor is the first to give up.

Pajamas Media was our first blog advertising competitor, created in November 2005 by a bunch of conservative and libertarian bloggers we’d previously worked with.

PJ’s ringleaders looked at our success and said, “Gee, that looks really easy. Let’s get someone to give us $3 million and we’ll kick Blogads’ butt.” That’s almost an exact quote, though I can’t point to source documents. (Anyone?) They went out and recruited ~75 conservative and libertarian bloggers we worked with. (Not everyone who joined PJ thought we were stupid or PJ was brilliant — a few remained friends, but went to PJ for outrageous guarantees.)

A year later, PJ’s management went back to their investor, a conservative billionaire [name?], and got another $3 million. Or was it $5 million? And that’s what they’ve done each year since. Until now…

As Pajamas wrote its bloggers yesterday:

As the end of the first quarter approaches and we near the production phase of Pajamas TV, we will continue to build our emphasis in this area. As a result we have decided to wind down the Pajamas Media Blogger and advertising network effective March 31, 2009. The PJM portal and the XPressBlogs will continue as is.

PJ’s fairly negative (and still not updated) history is here. And sadly, still no mention this Dunkirk-scale retreat on the front page of PJ’s site.

We’ll likely start working with some of these folks again via the conservative hive.

Just nine months after this:

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.”

We get this:

Sometime in the next hour or so, John will announce on the FM blog what we’re telling the staff right now: A small number of employees are leaving FM today. We’re sad about losing good people who have made valuable contributions to FM. We honor their service, we wish them well, and we’ll do everything we can to help ease their transition.

Federated has fewer than 75 staff, so they can’t have spent $50 million in just nine months, even with San Francisco’s inflated salaries. (Right?) Surely that small number of employees could be retrained if Federated was on a decent trajectory, right?

Federated appears to have gotten caught by the classic VC squeeze: first, agree a huge price tag. That’s fun for both the VC and the investee to brag about publicly. Then dole out the money in a series of chunks (called “tranches” by VCs) that are released only after the investee hits certain benchmarks.

Why does this happen? Well, at the end of lots of boastful presentations in the money-raising process, the investee is caught in a logical bind when the VC says, “You’ve made big promises and since you’re so sure of your story, let’s just add a small clause that covers our investment in the event you don’t live up to those promises.”

Having made this bargain/bet, the company starts spends madly trying to hit its benchmarks. Then when that scramble fails, the company has to pare back quickly to get to profitability.

It’s a nasty gambit, but greedy folks fall for it all the time.

Nine months after Edwards said “we have to be worth at least $101 million,” I wonder what the right number is today?

Pajamas TV offers you a chance to give conservative friends a unique Xmas gift.

PJTV… including “live coverage of election night!”

Sadly, it isn’t imbeddable, so here’s a screenshot.