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Thursday, August 17, 2006

AOL Buying, Is a Social Net Next?

AOL is on a spending spree, buying video game website GameDaily.com and instant messaging technology company Userplane, but their work is far from complete.

The best thing the company could be would be to hire the R&D talent that could put them in front of instead of several years behind the innovators. Sure, their purchase of Netscape hasn't turned out too well. I mean when was the last time AOL or Netscape developed anything first? AOL was the first successful instant messaging company, and we all know what Netscape did.

The pressure should be on Jason Calacanis to come up with something that sets rather than follows a trend. We always see the fruits of Google Labs and the researchers at Microsoft and even Yahoo, but AOL?

Or, the more expensive alternative is to bet the farm on being able to monetize the social network crowd through advertising. While AOL has made substantial coin in subscription fees, the company has also been adroit at pumping customers with lots of ads in between their searches and IM sessions.

What was the AOL crowd -- youngsters and their parents who were too lazy to learn about the "real" Internet -- have become more savvy and moved on to MySpace and YouTube. While users of the social networking site they bought would cry about AOL "Netscaping" them, AOL knows how to sell to a younger audience, and the acquisition would give the social network the gateway to lots of ad revenue.

By John Gartner at 08:12 AM | Comments (3)

(3) Thoughts on AOL Buying, Is a Social Net Next?

John,

You are usually dead on and insightful, but this one has me confused. Why on earth would News Corp let go of MySpace to AOL? I can see AOL WANTING MySpace, but...hey, I WANT Scarlett Johansson, but that doesn't mean Josh Hartnett (or whatever his name is) is going to give her to me.

News Corp is just peaking with FIM, and assembling the pieces of the pie, and doing so with MySpace as it's crown jewel centerpiece, so this scenario is not only unlikely, but dare I say that it is impossible.

When I was with Intermix, and News Corp bought us, the email that came from the CEO to us, had the subject line "Look Out Yahoo, here comes FIM". As they are reaching the ranks of the Yahoo's, the Google's, and the MSN's, I can't see them dumping anything to someone like AOL, let alone MySpace.

Also, MySpace isn't independent as you mention, and as far as getting access to ad inventory via an AOL move, remember the $900mm Google deal from a week ago? Where do you think most of that ad revenue is going to come from?

Good stuff though, love the site...keep it up.

Comments by Andrew : Thursday, August 17, 2006 at 09:27 AM

Yeah exactly! Wtf are you talking about, are you on drugs? Did you think Tom sitting in his bungalow still had controlling power thinking he might cash in his chips so he could take his girlfriend to vegas for the weekend?

Comments by Dean Niblett : Thursday, August 17, 2006 at 11:11 AM

Besides, AOL is in the midst of launching it's own version of MySpace, AIM Pages (www.aimpages.com). Seems unlikely they'd buy MySpace.

Comments by Jason : Thursday, August 17, 2006 at 01:30 PM

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