Blogging has now become a potential multimillionaire business. Execute it right, and you can earn millions. Take some of the most influential fashion bloggers: Chiara Ferragni of The Blonde Salad , Mary Seng of Happily Grey and Chrissy Ott of The Perfect Palette.

But, why and how do they make so much money?

• They have millions of followers
• They have a genuine fan base that can be influenced by the bloggers posts and opinions.
• Viewers engage and (actually) read their posts
• There is a feeling of connection, friendship and affiliation between the viewer and blogger.

The successful blogs have the power of attracting lucrative advertisements, modeling and/or being brand ambassadors. Overall they have the power of pushing through products to consumers, in a genuine and credible way.

So their blogs might have influence. But how can that they earn over a million of net income? The key, product diversification. The most influential bloggers today go beyond just having adverts on their page, yes, they do have them because it brings a certain amount of revenue, but the true money comes from this product diversification. We can see now bloggers having books, shoes, clothes lines, jewelry lines, apps… essentially whatever reaches their imagination (and target market). Take as an example the $8M revenue model breakdown of Italian fashion blogger Chiarra Ferragni:

• 30% Website (20% Advertisements; 10% Brand collaborations)
• 70% Chiarra Ferragni collection (Jewelry, shoe line, book)

Moreover, the blogs serve as free advertising platforms. When a new product or business venture is launched, there is no need of using traditional forms of advertising and product awareness strategies, these bloggers already possess a big platform (and database) with followers, fans and initial target consumers located in one place, their blog. Could it be easier than that? Not only are they able to directly influence with their own creations, the bloggers can earn extra (or majority) revenue, plus give their fan base something tangible to buy, to relate to and feel closer to the bloggers.

Finally, I´m going to raise a question I have always been curious about, will we ever see an IPO of a blog? We never thought it was going to be possible and happen with social networks, and look what happened with for example Facebook and Twitter. Do you think this could be possible? What do you think will be the next step for social media?