By Dan Mitchell
August 26, 2011

FORTUNE — This week saw the official launch of The Daily Dot, a Web publication that intends to coverthe Internet like a “hometown newspaper.” That is, it’s all about the people on the Web, particularly on social media sites, and what they’re doing and saying.

Editor Owen Thomas, formerly of VentureBeat and Gawker, told Adweek: “To the extent that we can humanize the Web, that gives us an advantage over people who look at the Web as a business, as a set of technologies, or as a set of APIs.”

A refreshing approach, if somewhat perilous. It runs the risk of coming off as painfully contrived. (Years ago, I worked for a tech news site that would publish stories like “Internet Reacts to Death of Princess Di.”) And there is some of that, but overall, it seems to steer clear of outright fluff. For example, a story about a viral YouTube video that depicts a little girl hugging and petting a dead squirrel offers fairly deep insight into how such things come to be posted, and how they manage to become popular.

Thomas is right that too many of us see the Internet as merely a vast array of investment opportunities, or as a technological playground, and too many of us tend to gloss over the very human activity that takes place online every day without regard to the business implications.

That doesn’t mean businesspeople can’t derive some value from The Daily Dot. The site shows how people are using the medium and what their expectations are. People’s obsessions with meat art and cross-section photos of candy bars might not be an obvious source of profit, but they do offer insights into what people do online and how they react to what they see.

Despite what Thomas says, the site does cover business. On Tuesday, the main story in the business section was about Starbucks (SBUX) using Facebook to promote a new drink. Other sections touch on business as well, and in more interesting ways. For example, there are a couple of good stories about Twitter spam, which is a real problem for Twitter, for users and for companies that use the social network as a promotional vehicle. A story about theft of digital art highlights in a unique way how online media changes our conceptions of copyright. Of course, there is plenty of coverage of Facebook, Reddit and other social media sites.

According to Adweek, The Daily Dot has no outside financing, and has started with just $600,000. Despite having spent months preparing for launch, there are no ads yet, save for a set of unique house ads extolling the benefits of advertising on the site.

This represents the “Catch 22” of starting an ad-supported Web site, says Nicholas White, The Daily Dot’s co-founder and CEO. “It’s hard to sell ads when you don’t have an audience,” he said, and it’s hard to build an audience without ad money flowing in. The site “absolutely” tried to drum up some advertisers before launch, he said, but the current atmosphere isn’t conducive to taking a chance on Web startups.

The plan, according to White, is to go for big brands that have proven themselves Web-savvy. He even mentioned a few – GE, Heineken, Pepsi – though there’s no indication that any of them are ready to write checks. “These are the kinds of brands that are going beyond just having a Facebook page,” he said.

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