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STARTUP

Building a Hugely Profitable Blog
 

Three years ago, Fred Mwangaguhunga launched MediaTakeOut.com, a blog focusing on urban gossip that is beating similar sites run by much larger companies.

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Fred Mwangaguhunga started his career capturing stories on film as a wedding videographer, a far cry from the gossip mogul he is today. But maybe that first college job augured where he'd end up: in the media hot seat, where photos and video footage of intimate moments are the coin of the realm. Mwangaguhunga is the founder and CEO of MediaTakeOut.com, a blog-style gossip website that caters to urban readers. The snarky, urban MediaTakeOut is known for breaking news that's often picked up by CNN, NBC, People, the New York Post and TMZ, and advertisers are buying the hype -- literally. The site gobbles up ad buys that used to go to competitors AOL Black Voices, BET.com and Essence.com, while its traffic has continually surpassed them as well. The lawyer turned serial entrepreneur, now 35, shows no signs of backing down. Watch out, Perez Hilton. He recently spoke with Inc.com senior editor Nicole Marie Richardson.

What led you to start MediaTakeOut.com?
I had a laundry business called Laundry Spa that was essentially a web-based business. Clients logged on, scheduled a pickup time and delivery time, chose a fragrance for their clothes, and we'd come pick it up and deliver it back to them. Business took off after we got a write up on the Daily Candy blog site. At Laundry Spa, we spent our ad budget on blogs. At the time, the idea of blogs was that they were really a niche only for the ultra-techie. After I sold my laundry business, I looked at the blog world and saw the growth they'd had. I thought this could be something bigger than a fad, or even if it is a fad, it's a fad that could last years. I didn't have anything else to do at the time, so I thought, let me just try this.

What were your start-up costs?
It cost $19.99 for the Yahoo account and about $7.99 for the domain name. Because I'm from a small business background, I operate this as a small business. We're lean in everything we do, and every expense is looked at to see how it will affect the bottom line. I want to maintain profitability and grow organically.

How is MediaTakeOut.com different from every other gossip blog?
In the urban space there are hundreds and possibly thousands of gossip blogs, but none have the traffic, the influence or the audience appeal of MediaTakeOut.com. Pretty early on in the formation of the company, I decided that, like Twitter, YouTube, and a number of other tech start-ups, we would spend most of our efforts building MediaTakeOut.com's brand equity and acquiring readers instead of focusing on revenues. Looking back, I think that was the right decision. But now, unlike Twitter and Youtube, we're actually making money. We've been cash-flow positive since the sixth month of operations and revenues are growing strongly.

Was it difficult to find out what readers wanted from the site?

Instead of using WordPress or another traditional content management system, we had a custom CMS built that was based loosely around the design of the Drudge Report. We offered people a bunch of different choices in media: A couple of music videos, a couple of stories about sports, a story about Britney Spears and a story about Beyoncé. At the end of the day, the urban clips were disproportionately more popular every day, so we began to focus on that.

So you didn't start out as a specifically urban site?
No, but the idea was, if this is what people want, give them more of that. So it went from 10 percent urban, to 15, to 20, to 30 to 50 percent. About a month into it, we realized, this is an urban site, so we decided to to make the switch and go completely urban. Since starting in 2006, MediaTakeOut.com has grown from virtually no readers to a site that receives more than 500,000 unique users a day and has five times the traffic of any other urban blog.

How did you get people to come to the site?
MediaTakeOut.com has broken some of the biggest urban news stories ever--like the Chris Brown-Rihanna assault, Rapper TI's arrest, and the Jennifer Hudson family tragedy. People know that we're the go-to place for breaking news in the urban community. Another huge part of our success is our active and engaged audience. We have over 650,000 registered users who actively comment on our articles. Their comments, often humorous and usually insightful, give readers that "extra" that they can't find anywhere else.

How does MediaTakeOut.com's traffic compare to other entertainment sites?
While MediaTakeOut.com focuses heavily on African American-oriented content, our traffic is on par with some of the largest mainstream sites on the web. According to September's Comscore numbers, MediaTakeOut.com received 87 million page views, making it the sixth most visited entertainment website in the United States behind only TMZ, MSN's Wonderwall, Yahoo's OMG, People Magazine, and TV Guide. It was ranked ahead of Perez Hilton, E! Online, Access Hollywood, Entertainment Weekly, and Us Magazine. AOL BlackVoices received 75 million page views and BET.com received 38 million.

Have advertisers taken notice?
In 2008, Internet traffic rating services like Alexa, Google Trends and QuantCast began reporting that MediaTakeOut.com was getting more traffic than some of the most popular corporate-owned sites. But a lot of people in the industry, including ad buyers, refused to believe it. [When Comscore's September numbers were released,] that was huge. Here we are a website started on a shoestring budget less than three years ago, and now we're officially more popular than the urban arm of AOL, a multi-billion company, or BET, the urban arm of Viacom, another multi-billion dollar company. The best part of it is these numbers went out to everyone -- every ad agency, every ad buyer, and every company looking to advertise to the urban market. Of course, advertisers immediately took notice. It was like a memo went out to all the ad agencies saying, "MediaTakeOut.com is one of the big boys." The day after the numbers came out, two advertisers that had turned us down for campaigns called up and told us they had reconsidered, which led to the largest two deals in the history of our company.

How do you plan to grow the site further?
In entertainment, I firmly believe that the only way to grow your readership in a sustainable way is to provide better content. I work 18 hour days, 7 days a week, and at least half of that time is spent trying to find ways to make our content more entertaining and engaging for readers. Our team spends countless hours each day trying to gauge our readership's interests. What topics or entertainers are getting hot, and which ones are losing the public's interest? All that hard work has paid off. We have tons of data on our audience and we monitor it daily. Through our research, we've become pretty accurate at predicting trends in the urban market. With a couple of pushes, there's no reason why MediaTakeOut.com can't be as popular or more popular than TMZ. They may have more resources and more footage, but a bigger budget doesn't necessarily mean a better product.  Two years ago, if we had said we could be as large as BET.com, it would have seemed ridiculous. Now it's a reality.

-- Additional reporting by Meredith Maines

Last updated: Dec 3, 2009

NICOLE MARIE RICHARDSON is the executive editor for special projects at Inc.com. She manages the website's largest projects, including the Inc. 5000, an annual list of the fastest-growing, privately-held companies in America.
@nicole_marie79




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