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By Root 840 0

—that is, creating open networks. But one new media company is building such a network. Glam is a web of women’s sites covering fashion, health, celebrity, and more. In only two years, Glam grew to be the biggest women’s brand online. As of this writing, it has more than 43 million users a month in the U.S. and more than 81 million worldwide according to comScore, surpassing the former queen of the hill, iVillage, with 18 million. iVillage, like Yahoo, operates under the old-media model: create or control content, market to bring in readers, and show them ads until they leave. Glam instead built a network of more than 600 independent sites, some created by lone bloggers, some by bigger media companies. Glam sells ads on those sites and shares revenue with them. Glam also replicates the best of the network’s content at Glam.com, selling ads there—at a higher rate—and sharing that revenue, too. Glam gives its member sites technology and content to make them better. It gives them traffic and they give each other traffic, pointing to sister sites in the network. The more traffic each site gets, the more traffic it has to send around—that is the network effect, another virtuous circle. Glam also gives its sites prestige, for unlike Google, it is selective. Glam’s editors find sites they like and highlight the best of the content, making Glam a curated content and ad network. That allows Glam to tell skittish advertisers that their messages will appear in a quality, safe environment, and advertisers will pay more for that.

There’s another big advantage to Glam’s network approach: cost. It need not hire expensive staff to create its wealth of content nor does it have to pay to license that content. At first, Glam guaranteed minimum payments to some sites—an investment that amounted to paying for content to get started—but it later eliminated those guarantees. Now it is a network of mutual benefit: The better content its sites create, the more traffic they get; the more traffic they can send around the network, the more Glam can sell ads at higher rates. Media companies should ask, WWGD? What would Glam do?

To be clear: Glam’s no Google, at least not yet. It’s not profitable and in 2008 was still taking venture capital—from, among others, the German publisher Burda—and investing in growth and technology. Its sites and their content can stand improvement. But I believe the model has legs and I’m no longer alone. The Guardian, Reuters, and Forbes each started blog ad networks to expand their content and advertising opportunities while their core businesses are challenged. These companies are taking a lesson from Google and its understanding of the networked architecture. I will argue later that restaurants and retail stores, certainly governments and universities, and even airlines and possibly insurance markets can operate like networks, creating more value when they create more connections in their worlds.

In 2005, I joined a roundtable held by the venture-capital firm Union Square Ventures in New York to talk about peer production and the creation of open networks and platforms. Counterintuitive lessons swirled around the room as entrepreneurs, investors, and academics analyzed the success of companies built this way. Across the table sat Tom Evslin, the unsung hero of the web who made the internet explode when, as head of AT&T Worldnet, he set pricing for unlimited internet access at a flat $19.95 per month, turning off the ticking clock on internet usage, lowering the cost for users, and addicting us all to the web.

Evslin gave a confounding lesson on networks. Explosive web companies—Skype, eBay, craigslist, Facebook, Amazon, YouTube, Twitter, Flickr, and Google itself—don’t charge users as much as the market will bear. They charge as little as they can bear. That is how they maximize growth and value for everyone in the network. Evslin used an ad network to illustrate the value of building scale in this manner. An ad network that extracts the minimum commission it can afford out of ad sales for member sites will grow larger