Nostalgia Kills Companies (Score 1)

It is sad that some of the things that made AOL great might get less attention as the Time Warner boys move in, but unlike the writer:

1) I doubt it will happen because this is about content, and I don't think the swinging scat fetishists are on AOL for the content -- they're on for the hot (lunch) chat and community experience. Yes they made AOL with their non-stop, $500 a month chat habits, but it's a different business now. AOL's membership is in the tens of millions, these folks number in the hundreds of thousands -- and as compulsive chatters in a fixed-rate world -- don't represent much to AOL anymore. To lose the folks due to inattention would be a shame, but more in the metaphysical sense than from a business point of view.

2) Everyone else is on AOL (and MSN, and Yahoo!) for the E-mail and content. There are a thousand little niche groups I could list (newbies, people who only use it out of habit, etc...), but one way or another the majority of folks are there to read E-mail and content.

AOL (like MSN and Yahoo!) is a content network. Content is expensive to produce and serve. It requires creative, editorial, production, technical, and maintenance staff, hardware and bandwidth. The staff who perform this work must be managed. The managers must be managed. In a company the size of AOL, the managers of the managers of the managers of the managers must be managed. This is an exaggeration in support of my point which is: From a business standpoint, it's hard to believe anyone could come to a reasoned conclusion that their stragtegy is off. Here's why:

1) If it's succesful, it pave the way for AOL/Time Warner to roll up dubiously (heh heh) successful online properties (e.g. people.com, time.com, cnn.com) without taking them offline. By doubiously succesful I mean: as online properties supported by a gutted advertising market, they just lose money anyway. Some of the loyal people.com readers _will_ come over to AOL. This is true for cnn.com, time.com, etc... readers as well. Yes this means downsizing and merging functions and the like, which is difficult and strategically risky. But if they're succesful with the people.com experiment, get ready for them to start rolling these properties up quickly.

2) AOL customers who might have been using the public network (which is expensive for AOL, since the bandwidth costs for them are at the edges of their network rather than inside it) to visit other interactive Time Warner properties will now do that within AOL's network. How many customers do this? How much will it save? You can bet AOL knows -- every ./er knows this stuff is very measurable. You can also bet they know or have projected with reasonable accuracy just how much they would make (and save) if they rolled all of the existing Time Warner interactive properties up into one big hairball like their plan dictates -- available for free to AOL users, available for pay to everyone else. Time Warner has nothing to lose, and everything to gain.

3) It broadens AOL's content base, which might help them stem the flow of users who have figured out that the public internet has a lot more content on it than AOL.

Pathfinder failed because it was ahead of its time. The writer notes that it was started in 1994 and shut down in 1999. Go Figure. In 1995 I had a beautiful blue Indy on my desk at a little interactive firm called Giant Step. It was my workstation and the primary DNS ("name service") and Web host for United Airlines (ual.com) and Maytag (maytag.com). Sometimes, when I was coding, I'd screw something up and shut down and restart the computer because I didn't know enough about Unix (Irix) to kill off the offending program I had written without shutting the box down. There was no firewall. There was no fault-tolerant n-tier architecture. Just me and my Indy.

My point (aside from painful nostalgic reveling) is:

1) Times have changed. The Web and its users have gone through the boom cycle and matured quite a bit in a short time. A good portion of the internet population is now paying for at least some of the content they consume.

2) No one would have paid for content in 1994, 1995, ..., 1999. There was no need to. There were too many companies willing to give it away "for free" or publish it for fun. Popular sites recouped a lot more of their costs in ad revenue than they do now. Those were great days, but they're gone, gone, gone (wo ooh oh ooh oh).

In closing I'd have to say that AOL users and non-users who enjoy comedycentral.com, cnn.com, the Netscape Network, time.com, people.com or any of the many other tens (hundreds?) of Time Warner interactive properties is in for some changes. I think this experiment will succeed.

Luckily, there doesn't appear to be any visible intent on the part of the big bad Time Warner wolf to stop people from chatting about plans to screw each others wives or poop on each other. And thank goodness for that. Without that, it just wouldn't be AOL.