John Battelle is bullish on the prospects of online publishing, especially for new publishing models and for old companies if they can “change their DNA”. In a recent interview with CNET’s Stefanie Olson, veteran search watcher, blogger, and online publishing advertising magnate Battelle suggested that Google will likely rebound in stock price after corrections in the past quarter, that advertising at his Federated Media Publishing company has not shown signs of diminishing, and that he sees a key strength of Federated as finding ways to keep high quality and independent blog voices intact while providing them with the type of advertising rates normally reserved only for established media.

Although I’ve expressed a lot of skepticism in the past about the “Conversational Marketing” model developed and promoted through Federated, Battelle’s credibility as an analyst in the online publishing industry is hard to match. He co-founded Wired magazine in 1993 and also the Industry Standard in 1998. Even if the flawed conversational marketing model fails, it now seems clear that Federated will have a powerful role to play as a broker between quality online publishing and large advertising networks. Federated appears to be succeeding - or perhaps just picking up money left on the table - in cases where Google Adsense advertising does not deliver enough value to publishers.