Friday, May 1, 2009

Shirky Debunks Wall Street Journal Story

I almost choked when I heard about the Wall Street Journal story that said over 450,000 Americans are making a decent living by blogging. Then it went on to say "It takes about 100,000 unique visitors a month to generate an income of $75,000 a year."

Riiiiiight, I thought. 450,000 bloggers have stats like that.

But it took my hero Clay Shirky, writing for boingboing, to dissect the utter stupidity of the WSJ story. It's a basic misunderstanding of the power law distribution he explained so well in his book Here Comes Everybody: A very few people are making a bunch of money, and when you combine them with the many others who aren't, the average (or mean) of their incomes is thrown off. What you want to look at instead, in the case of a power law distribution, is the median (or midpoint). And even then it will be distorted. Like the average income of people in a bar if Bill Gates is one of the people.

Shirky gives us the real numbers:

Average revenue for bloggers in the top 10% of revenue is even lower than the 100K median, and the median income for all bloggers running ad-supported weblogs is (wait for it)...

...$200. A year.
He then concludes:
There was no way to rescue this [article], since the argument rests on incorrect extrapolations from selective readings of suspect data; the Wall Street Journal should be embarrassed to have published it.

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