Should Other Tech Publishers Be Worried About Gigaom's Closure?

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Gigaom, the influential tech and media website founded in 2006, closed abruptly Monday night. A note posted to the site said:

Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company's assets as their collateral. All operations have ceased. We do not know at this time what the lenders intend to do with the assets or if there will be any future operations using those assets. The company does not currently intend to file bankruptcy. We would like to take a moment and thank our readers and our community for supporting us all along.

The comments suggest the site could return. Still, current and former employees and admirers were mourning Gigaoam in social media posts and articles hours after the news emerged.

But it's also important to consider what Gigaom's closure says about the business of digital media.

Although Gigaom's audience was relatively small -- it had 2 million unique U.S. visitors on desktop and mobile devices in January, a 10% year-over-year decline, according to ComScore -- the site's business model was cited by media executives and analysts as an example to which other digital publishers should aspire because of its diverse revenue streams.

Gigaom generated revenue selling advertising and research products, as well as hosting events.

That should sound familiar. Digital-only publishers with tens of millions in investment cash, piles of generous headlines and big ambitions to unseat traditional media companies -- yet have little or no profits so far -- say they'll make money by selling more ads, hosting events and, maybe, introducing some paid model, whether that's subscriptions or research products. As it turns out, the so-called disruptors plan to achieve profitability by pretty much aping old business models.

(More on that last point here.)

It might work, especially when digital-only publishers don't carry the legacy costs (like paper and pensions) or the calcified structures of old media. And Gigaom might have been badly mismanaged, but its sudden closure should at least give digital-only publishers a moment of pause.