Drudge, Reuters and the Breitbart connection

Gawker has an interesting story about a profitable arrangement between Reuters, Andrew Breitbart and Matt Drudge.

Here's the setup:

...a large percentage of the stories the Drudge Report links to are newswire stories, which can be licensed by any entity willing to pay for them. An Associated Press story, for example, may be carried on literally hundreds of sites – and Drudge is free to link to whichever one of those sites he chooses, for whatever reasons. In turn, the lucky site he links to is rewarded with a huge blast of monetizable traffic through no reportorial work of its own.

How does it pay off for Breitbart?:

Over the course of a year, the Drudge Report links to thousands of AP and other newswire stories. At some point, Breitbart realized this was basically like pouring money down a drain, only worse. It was like pouring money down a drain that some random newspaper publisher was sitting under, cackling gleefully as the money poured down on him.

Why, Breitbart must have wondered, couldn't he be that cackling publisher? A newswire portal would require little investment other than the newswire licensing fees, and yet with the Drudge Report sending it a thundering river of traffic every day, it could potentially make millions of dollars in advertising too.

And so, in 2005, Breitbart launched Breitbart.com, which is basically a portal for newswire stories. Links to Breitbart.com from the Drudge Report followed. A study found that in the year the site launched, 25 percent of the links on Drudge pointed to Breitbart.com.

So how did Reuters, a bastion of "liberal media," hook up with Breitbart, the self-appointed basher of "liberal media"? Well, Reuters was one of the wire services Breitbart had a license with. Then they broke up. Then Reuters came back with a new idea:

Typically, newspaper sites pay newswires to license their content, and that's what Breitbart was doing until Reuters cancelled its original contract with him. Now, it wanted to switch things up.

Under the terms of the new proposal, Breitbart would not be able to publish complete Reuters stories on his own website. Instead, he'd merely publish headlines and summaries that would link to Reuters' own page.

How did this change Drudge Report's link habits?:

The Drudge Report linked to Reuters.com just 29 times from January 1, 2005 to October 14, 2005. Then, Breitbart signed his new deal to drive traffic to Reuters.com for money. From October 15, 2005 to December 31, 2005, the Drudge Report linked to Reuters.com 229 times. ... In 2006, the Drudge Report linked to Reuters.com 1888 times.

Read the whole story here.