AOL, 2006 Called and Wants Its Content Commoditization Strategy Back…

Photo by jdlasica on Flickr
It was a Monday like any other Monday. After a weekend of too much drinking, low-key football-centric Sunday celebrations (Go Packers!) and an early night to bed, I woke up this morning in the way I normally do on a Monday: Cursing ye gods of Mondays past, and hoping the day would not turn into the inevitable case of the Mondays that they all do.

Wearily, I reached for my laptop to find out what the Monday morning tech news buzz was and my eyes flew open in surprise: AOL had acquired the Huffington Post for $315M in a hybrid cash and stock transaction. This only a few months after TechCrunch had been acquired, also by AOL, for an undisclosed amount.

It was a deja vu kind of moment this morning as I saw the stereotypical business model of the mid-2000s flash before my eyes. In those days, everyone thought they could make money purely on advertising and content. Crank out the content, get more eyeballs, get more ad dollars, PROFIT!

The problem was (and still is!) is that the more content that is produced, the less valuable it becomes. It’s really very simple economics. More importantly, the advertising world has two buckets… maybe three if you put Adsense by itself in the lowest bracket. You have direct-buy, expensive, high-return type ads. These are most often purchased by big companies with big advertising budgets like Apple, Cisco, etc.

The second type of advertising (putting aside alphabet soup forms like CPA, CPM, CPC, etc) is generically called “remnant advertising”. Remnant ads make up the vast majority of internet advertising. It’s cheap to buy in bulk (and in a less targeted way), doesn’t usually pay a lot and, in general, is a good way to do commodity advertising.

This is what we did at b5media. I’ve not spoken much about my time at b5media because, frankly, it disgusts me where they’ve come. We actually had a good product going and things went awry. I won’t place blame. But what I will say is… we built that company on commodity advertising, commodity content, and had a tough time growing the company. I left with over 350 blogs in a dozen “channels”, each channel being a grouping of 20-30 blogs around a topic like sports or entertainment.

It was easier to try to do ad sales for a group of blogs on a topic, than it was to do targeted, lucrative advertising.

The problem with the b5media model, along with the Weblogs Inc model that sold (ironically also to AOL), the Gawker model, the Glam model, and now the AOL model, is that the content quality sucks. When I pick up a magazine or newspaper, I would not liken most media to The Atlantic or The New Yorker, both of which are highly intelligent publications that put out content that is exceptionally tuned and academic. The quality of the content is orders of magnitude higher than most newspapers or magazines (obviously including this blog).

Those publications are rare and can get private money from subscriptions, etc. The advertising route is the cheap route, and the route that business models go when they aren’t good enough to charge for access (a more reliable revenue source).

For the record, commodity business don’t normally pay their writers anything comparable to what their “colleagues” at uncommoditized media organizations get paid. That’s because, their work is not valuable unless it is in bulk.

Going back to the $25M Weblogs Inc acquisition in 2005, AOL has gone down this road of commodity content before. They even killed off a bunch of the WIN properties keeping only the ones that were truly valuable – like Engadget. They are taking a different approach and buying individual high-productivity sites now – which is better – but then their strategy is one that involves combining these sites, at least on a content integration level, into a mass-produced, commoditized content machine.

So is it really different?

A Tribute to My iTunes: a Short Story

Photo by Craig Cloutier
A short story.

It’s Raining in Baltimore a little toward Sullivan Street. I guess it’s going to be a Long December Round Here. This happens Time and Time Again. I guess that makes me the Rain King.

So, I’m just going to put my Hand in My Pocket, smoke some Mary Jane, and hope to Wake Up later. Isn’t it Ironic?

Or, sadly, I’ll end up heading Back to Hell since there’s no way to Prevent this Tragedy. It’s the nature of The Poison.

Or better, maybe I’ll wake up in the Arms of a Woman I can call Sweet Pea. And tell All my Friends who will think I’m scraping the Bottom of the Barrel.

That will inevitably lead to a fight where I ask them to Take it Back. Then I’ll feel bad and tell them that Maybe You’re Right and head back to the Old Apartment. I’ll feel bad about my life and imagine what I’d do if I had $1,000,000. Bah, It’s All Been Done.

Later, after I feel bad for awhile, everything will be cool between my friends and I and we will Come Together. Dear Prudence! Oh well. Oh blah Di Oh blah Da, life goes on. I’m so Tired and my life is so Helter Skelter. Good Night, I’m a Loser! Turn on the Rock n’ Roll Music. It’s Still Rock n Roll to Me. I Don’t Want to Spoil the Party. This happens Eight Days a Week.

I could get a hooker. But nah… Can’t Buy me Love. Is there Another Girl? Help! Let it Be… Maybe she’ll Stay.

So I head to Pflugerville…. Rockin’ the Suburbs. I do the Best Imitation of Myself… and Uncle Walter… who is a creepy old guy, so I get nowhere. At least there’s Video.

But I found her! She was an LA Woman which was a Shock to the System. After spending some Mony, Mony and a yippy Rebel Yell, we decide on a White Wedding. Oh What a Night!

She’s Always a Woman… Especially after she gets a Captain Jack and Coke. Yum. She’s already ready to Say Goodbye to Hollywood. She claims a New York State of Mind, but I’m convincing her that Austin is better. It’s just Honesty.

Shit, now she’s talking about Allentown. Pennsylvania?! WTF! And Maybe Miami 2017?! Plan ahead much? She’s too much of an Uptown Girl.

Whatever. I was Born in the U.S.A. and it’s all the U.S.A. Certainly not the Glory Days in Darlington County, thank God. Who likes Jersey anyway?

Mmmm mmmm mmmm mmmm. This is what happens When I Go Out With Artists. We end up back In the Days of Caveman when God Shuffled His Feet. I Think I’ll Disappear now.

It’s Friday i’m in Love. I’m also High and sing a Lovesong. Why Can’t I Be Like You, bring you Close to Me In Between Days. Let’s Go to Bed. Just Say Yes.

Eek, I find out she’s a Woman Like a Man! Run!!!! Does this make her the Blower’s Daughter? Ick! Cheers Darlin’! I don’t want to ask you to Be My Husband. I don’t roll that way. Not that there’s anything wrong with that! LA Woman, my ass…

So Morning Calls and I think of a Ghost of a Good Thing. There’s Several Ways to Die Trying.

I’m So Damn Lucky. This is woman #40. Six after #34. In case you can’t do basic math. Should I Stay or Leave? On to #41? It’s Out of My Hands. This is the Last Stop. I’m such a Pig she says drunkenly. Go ahead, woman… Crash Into Me. Talk to the Bartender. That’s not water. Don’t Drink the Water. It’s from the Louisiana Bayou where they make Alligator Pie with Big Eyed Fish, Captain…

Heh. Crack a Bottle, you’re drunk. I’ll get you home, babe. Especially with an A*s Like That. I’m So Bad. One shot 2 Shot. It’s Curtain’s Down. We’re Going Through Changes, Slim Shady. Space Bound!

It’s So Easy. Get on the Nighttrain, Mr. Brownstone. You’re Crazy, Sweet Child o’ Mine. Don’t Cry.

I’ve got 99 Problems, girl, and that’s as Real as it Gets. I can’t be Young Forever. I want to Run this Town, but I guess I’ll need an Encore. I’m So Ambitious.

On to the Next One.