Warning: read the Pajamas Media fine print first

Filed as General on May 2, 2005 4:16 pm

by Duncan

Duncan Riley> Roger L Simon and others are making waves with their new blog advertising/ news network Pajamas Media. Growing blog network Bloglogic has joined and so apparently have others. Indeed, despite the people behind Pajamas Media being political bloggers it was a post from growing blog network Bloglogic that prompted me to take another look today. I emailed Pajamas Media and was sent 3 documents, which I presume are provided as standard to all people making enquiries. The documents consisted of an agreement and seperate non-disclosure agreement, that must be signed to go forward, and a business proposal. As a result of reading these documents, I have some concerns with the way in which they are developing the business.

Legality of documentation
I’m not an American law expert, but I find it hard to understand how a legal agreement can be signed by a non-existent corporation and an individual as proposed in the agreement documents sent. To quote:

“Pajamas is a California partnership in formation. Once formed, Pajamas wishes to contract with [you], an individual who lives in [your state, country] to do two things:”

Certainly in English-law countries (Australia, UK, Canada, NZ) I’d think that there would be little, or no legal standing in such an agreement, because the partnership/ company does not exist at the time of signing and therefore has no legal standing.

Exclusivity
The agreement that must be signed to obtain further information on the proposal and, I think rather disturbingly includes the following paragraph

“In consideration of this opportunity, [you] agree to enter into a 120-day exclusive right, starting on the date of execution of this agreement, to exclusively negotiate with Pajamas on representation for remarketing of creative and journalistic works and advertising on your blog in various forms. (Note: This agreement is not meant to contravene existing agreements, if any, with other advertising companies. But it does preclude the signer from entering into new agreements or extensions of existing agreements with the exception of discussions necessary to manage current contracts for running blog ads).”

Basically, if you sign the agreement your stuck with Pajamas Media, site unseen, for roughly 3 months, and basically can’t talk to anyone else about advertising or being part of a network. Problem is though, is it is literally site unseen and a step of blind faith. Pajamas is asking for exclusive rights without actually articulating what it is they’re are offering or when they are going to get off the ground, and they are using hairy-fairy language to get the sing ups:

“Pajamas will offer you ‘€œmost favored nation’€? status for advertising percentages and content sale percentages, implying that the terms of their transactions will be equal to the highest percentages given any other participant who is not an owner in Pajamas. Pajamas intends to reach out to blogs in part by using bloggers as a sales force. You have a blog network, and it makes more sense for us to pay you to approach the bloggers in that neighborhood than it makes for us to hire some sales person to find them and approach them. So we’€™ll have an affiliate program, which will allow you to bring in other bloggers and participate in the revenue that they bring to us.”

All very well and good, but what does it actually mean? The cut could be 5, 10, or 15% for what a we know, although I’m sure it would be more, bloggers are expected to sign up based on this? And bloggers are our sales force? let me get this right, I sign up, they get a cut of my advertising, but I’m suppose to recruit others to Pajamas Media? Nearly smells like an MLM to me. No offence, but if I’m signing up to an advertising network, Im doing the writing and they’re doing the selling, and I’m not going to end up doing both and recruiting others.

Secrecy
For a partnership/ company being formed by high profile bloggers, people who are suppose to champion transparency, there is a lot of secrecy around the proposal, which includes a full disclosure document with threats of legal action in California should bloggers dare spill the beans on what’s being proposed. I respect the right of companies to have secrets, but isn’t the blogosphere about something better than this? If Jason Calacanis can engage an audience on matters within Weblogsinc whilst still making money, why can’t Pajamas?
Interesting also that whilst the agreement sent through mentions Pajamas as a partnership in formation, the non-disclosure agreement doesn’t. I’d also be interested in the legality of enforcing a non-disclosure agreement of a California based company with say a foreign blogger, who blogs and hosts outside the US.

Intellectual Material
I read, and reported on the launch of Pajamas media as being the launch of an advertising network and a news service. Sure, now I’ve re-red the post I can see that the news service and advertising service is one in the same, it didn’t hit me until reading the documents sent through. Basically, if you eventually sign up for the service (I presume final signup comes at a later date) you’re not only signing up for advertising, you’re signing up to give Pajamas rights to reprint your intellectual content as they please, and to re-package it and re-sell it to the mainstream media. Now, don’t get me wrong, I think the idea of providing a news-wire type service that covers the best in blogging is a genius idea, but I’m concerned but not everyone will understand the consequences of essentially signing over control and distribution of their intellectual content. There is also no guarantee that the news offered and used will result in monetary reward either directly to the blogger.

Political
Sure, lots of people are going to know the background of the people behind Pajamas, and plenty aren’t. The bloggers are almost exclusively Republican/ right wing political bloggers. Whilst they are mostly very high profile and successful bloggers, for a company that is approaching the greater blogosphere, the mono-culture of views may be a great advantage amongst the right-wing political blogging community, but how well will these skills translate over into the rest of the blogosphere. Those utilsing Pajamas services outside of right wing political blogs also run the risk of politicizing their sites through association and indeed risk alienating loyal readers should they sign up. I’ve also got a feeling that once these guys get off the ground that the left of the blogosphere will come gunning for them, there is, after all a lot of people behind Pajamas that those on the left like to hate. Is it worth the risk of getting tied up in the potential of this happening?

Suffice to say, despite my initial interest, I won’t be signing up. I may, however at a later date reconsider when (a lot) more information becomes available, as I do see some synergies that may work. My advice to others is that you should indeed read the fine print first, and if you’re still keen but aren’t to sure, seek legal advice.

Update: Paul from Bloglogic has emailed me to let me know that the network hasn’t joined Pajamas and has some concerns as well, which is posted here. I’ve amended the post to reflect this.

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  1. Regarding Pajamas | BlogLogic.netMay 2, 2005 at 6:37 pm
  2. Roger L. Simon responds to The Blog HeraldMay 4, 2005 at 12:32 pm