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| Earl Mardle's Journal Thursday, May 29th, 2003 |
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Remember in the heady days of the Dotcom bubble when "new media" and "old media" were supposed to converge, creating and explosion of, well something, mostly profits? "There is still a wait-and-see attitude about the merger paying off the way it was supposed to do," UBS Warburg analyst Christopher Dixon told the E-Commerce Times. "They've done more in terms of cross-platform work lately, but the question is still out there, and it's a matter of time before AOL has to show progress or admit it might need to rethink where it's headed." I still say that the main reason for this failure is that AOL is not at all a content business. because it attempts to be not only the source of connectivity, but also to keep its users on its own networks (many AOL users have never used the Internet, only AOL services and content) it has had to develop those services and that content itself or through commercial partnerships. It flies in the face of what the Internet actually is, a vast source of information, content, services, all built on its End to End structure. Unfortunately AOL, and many others, thinks that End to End means that they have to own the process "from one end to the other". They couldn't have been more wrong. Merging AOL and TW made about as much sense a merging a trucking firm and a cake shop because the cake shop does deliveries. The media business model is this "I sell my audience's wallets to my advertising customers", the ISP business is "I sell ends of connectivity". The first sucks up human resources like crazy, the second is rapidly becoming a commodity business. There is no point of connection. In Australia, Telstra is moving out of the content business because its expensive and doesn't attract enough new customers looking for "high quality content" on their network. Big surprise. Education is occurring. post a comment
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