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JANUARY 30, 2006
AOL: MySpace Invader Launching a social network off its instant messenger Did you think MySpace (NWS ) could blow up this big, this fast without anyone else noticing? Time Warner's (TWX ) AOL is readying its bid for the MySpace.com, um, space. It won't be a site per se. Rather, the online giant is building a platform off its massively popular AOL Instant Messenger service to better enable its users to share and create content. That the internal shorthand for the project is "AIMspace" -- don't count on that being its real name -- testifies to how tightly the company plans to tie it to AIM, which the company says has 43 million users. (What is an IMer's "buddy list" if not a social network?) It also shows how MySpace has become the generic term for all social networking sites, which were the dark-horse mass media success story of 2005. Executives with firsthand knowledge of AOL's internal discussions say the platform's features won't arrive all at once, but the first ones likely will surface in March. It's expected to blend all manner of AOL content offerings with the user-created content, conversation, and community that define social-networking sites. As with MySpace, expect music to play a major role in AOL's effort; it's an area in which AOL already boasts bona fides. While traffic at AOL Music has slipped slightly, thanks to growth at Yahoo! (YHOO ) Music and Apple Computer's (AAPL ) iTunes, the site nonetheless notched more than 17 million unique visitors in December, according to comScore Networks. An AOL spokeswoman declined to comment on any specifics beyond an e-mail saying "it's just too premature for us to talk about our social networking plans today." IF YOU NEEDED ANOTHER milemarker to measure today's landscape, consider some MySpace data. Last month the site, which just entered its terrible twos, had 32.2 million unique visitors, more than quadrupling the comparable total for 2004. Earlier this month, Rupert Murdoch said MySpace was adding 1 million new members a week. (How hard is Viacom (VIA ) kicking itself for getting outbid by Murdoch's News Corp. (NWS ) for the site last summer?) Thus there's a vogue for anything smacking of a social network. In recent months, Yahoo purchased photo-sharing site Flickr.com, social calendar site Upcoming.org, and del.icio.us, a tagging service that allows users to share bookmarks. Eye-popping traffic numbers rung up by MySpace, facebook.com, and xanga.com, and those brands' meteoric rise, make it easy to forget just how devalued the phrase "Web community" once was. Not that long ago it was linked to flameouts and never-weres such as TheGlobe.com and Geocities. Back then, the notion of reader-produced content was, often correctly, interpreted as "we are too cheap to pay for it." That millions of consumers, and especially young ones, now find online pals' content -- be it photos, messages, or random musings -- more compelling than that of quote-unquote professionals is one of the bitterest pills Big Media has had to swallow of late. Despite its New Media DNA, AOL is as Big Media as online players come -- that is, it's an established mass-market brand not especially renowned for risk-taking. Its massive user base and the popularity of AIM and areas geared to music and games suggest AOL could be the one Big Media player to create, rather than buy, its own social network. But social networks thrive on a sort of chaos that's anathema to AOL, and the ways in which AOL seeks to tame the wilder aspects of the Web are at odds with MySpace's loose vibe. (That MySpace is a big online hook-up joint doesn't always register in press accounts.) The years when AOL's revenue was goosed by hourly fees racked up by adults at play in its minutely segmented chat rooms are long gone, and though it used to be good at lighting a fuse and getting away, it's uncertain if AOL can go back. But AOL is trying to play in the upside-down world of today's media. Murdoch wants to make MySpace more like a portal. And the portals want to be more like MySpace. For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia  By Jon Fine
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