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AOL vs. MySpace
There has been a fair amount of discussion in the blog world about the bidding war going on for AOL.
Jeff Jarvis reminds everyone that AOL is a "nightmare".
Henry Blodget says there are pros and cons for everyone in such a scenario.
What do I say?
AOL is an aging online business whose audience consists mainly of people who have shown no desire to step out and join the roll your own web that is emerging as the best place to be.
It may be of some value to the big guys as Henry lays out, but its a brand with problem and it may be a big problem.
According to Media Metrix, AOL's audience has been flat at 85 million unique visitors a month for the past year. It has a reach of about 53% of the total Internet audience and that has also been flat for the past year.
If it were removed from the other Time Warner online properties, alone its audience size would be tied with Google for third after Yahoo! and Microsoft.
Remember, at one time AOL was the biggest thing on the Internet. It's demise has been slow and sad to watch, but it is a declining asset and Time Warner has not done nearly enough to energize it and turn it around.
Don't get me wrong though, I am a fan of many of the moves that Jon Miller and his team have made, the main one being the move to a fully web centered business. But it took too long, way too long, to make this move. That's not Jon's fault. It's Time Warner's fault. They weren't willing to walk away from the dial-up business back in 2000/2001 when the writing was on the wall for that business model.
As I was working my way through the Media Metrix report getting the numbers that I quoted above, I came across a stat that honestly shocked me.
Here are the six web properties with the most pages viewed (remember ads run is mostly equal to pages viewed on the web):
Yahoo! - 43,700MM
Time Warner - 31,600MM (AOL is roughly 70% of this)
Microsoft - 21,800MM (MSN is part of this)
eBay - 10,900MM
MySpace - 9,600MM
Google - 6,300MM
Notwithstanding the somewhat interesting fact that Google is a relatively small page view generator, which makes sense given their reliance on search, the shocking fact is how fast MySpace is catching up to the big guys.
And what's even more amazing is that MySpace's page views have grown 50% in the past three months.
Web 2.0 baby!
But I am not really surprised by this because of what is happening in my house.
The Gotham Gal and I left AOL years ago, opting for Netscape for web browsing and email in 1996 and AIM for instant messaging a couple years later. We've never looked back. Never.
But we've kept not one, but two AOL accounts for my kids.
But the girls are never on AOL since falling in love with MySpace earlier this year. They do continue to use AIM, but they "live" on MySpace. It's the first page they look at when they log on and the last they look at when they log off at night.
I see what's happening. AOL is losing its core audience of IM/email driven teenagers to MySpace and they are losing it fast.
And MySpace is ramping big time.
If MySpace could grow its page views 50% per quarter for another six months, they'd have close to 15,000MM pages viewed per month by year end, and would catch Microsoft and AOL by March of 2006.
Don't bet against them.
Who is the smartest guy on the Internet right now?
Maybe not Sergey and Larry.
Maybe Rupert Murdoch.
Does $500mm sound like a bargain? It does to me.
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» MySpace has more traffic than Google from Yannick Laclau
Latest Internet traffic stats, which I reproduce below via A VC, are stunning. Page views last month, largest web properties, from Media Metrix: Yahoo! - 43,700MM Time Warner - 31,600MM (AOL is roughly 70% of this) Microsoft - 21,800MM (MSN [Read More]
Tracked on Oct 17, 2005 7:02:50 AM
» MySpace has bigger traffic than Google? from Ambot ah! [ technology news and reviews ]
From a recent Media Metrix stats report, Google has apparently been out viewed by MySpace, 3 to 2.
Yahoo! - 43,700 MM
Time Warner - 31,600 MM (AOL is roughly 70% of this)
Microsoft - 21,800 MM (includes MSN)
eBay - 10,900 MM
MySpace - 9... [Read More]
Tracked on Nov 10, 2005 1:27:49 PM
Posted October 16, 2005 in Venture Capital and TechnologyComments
85% of College Students use FaceBook
http://www.techcrunch.com/2005/09/07/85-of-college-students-use-facebook/
http://en.wikipedia.org/wiki/Orkut
Posted by: Dimitar Vesselinov | Oct 16, 2005 4:53:24 PM
MySpace Vs. MyYearbook Vs. The Next Big Thing: War Of Strategy/Design/Function Or Other?
http://www.minorityrapport.com/2005/09/myspace_vs_myye.html
Posted by: Dimitar Vesselinov | Oct 16, 2005 4:57:36 PM
An asset that targets the 12-24 y/o market is in extreme danger of "page view flight" of a massive scale. And why is MySpace any better than Friendster/Facebook/Xanga? As someone who has a accounts with all 3 and am at the later end of the target demo, I can tell you that MySpace is headed for a fall as soon as someone new and fresh comes along. No offense but there is a fundamental generational split between the "Web 2.0" drumbeaters (like yourself) and the people that are actually using these services. These assets are not stable nad thus the values being paid for them are a little ridiculous. While MySpace is rocketing up the charts, watch it plummet just as quickly. AOL is CONSISTENTLY at the top of the page view list and has a track record of this. The Internet Majors (YHOO, GOOG, MSFT) are going after it for this reaoson. Growth is great but size trumps all...no?
Posted by: Ahsan | Oct 16, 2005 5:04:13 PM
I browsed through some myspace pages yesterday and I found the user-generated-content rather poor in quality.
Since users can "enter HTML/DHTML or CSS in any text field.' the profiles are filled with bad design, animations, user-created-ads, and terrible pick up lines.
While the property may have the eyeballs, some standards will need to be put in place as Myspace may be running on momentum right now.
Posted by: Page | Oct 16, 2005 5:27:44 PM
I'm with Page, MySpace feels like the InfoSpace of web2.0. My Hype-ometer's off the charts on this one.
Posted by: David Gibbons | Oct 16, 2005 6:10:14 PM
The metric that matters is page views? How... bubblicious!
Posted by: steve | Oct 16, 2005 6:15:25 PM
Page,
You may not like the "bad design"... and the "poor" quality content... but this, in fact, is probably the strength of MySpace... It is the freedom from cultural establishments.
Posted by: Emil Sotirov | Oct 16, 2005 6:20:24 PM
I spent an hour clicking around on MySpace. I disagree with the negative comments above; yes, you can't get your tech-god satisfaction out of it, but you're missing the point. Most people don't want to be able to do everything. They just want some to some things well, and they don't care that much about the underlying tech. Mainly, they want human connection, and MySpace does a great (if not technically amazing) job of enabling circles of friends to post what matters to them, then link to each other, etc etc. It's not new, of course;they've just put together a formula compelling to enough people that would spread it.
It's amazing to me that this is remotely interesting; I don't have the time to do what these kids are doing, or the inclination. And I have to remind myself I'm a founder of a software company without the same social needs or aspirations, and that there's seriously different stuff going on with those crazy kids out there.
MySpace is easy. And it's sticky. Fred's right--it will keep growing. And sure, something else will come along. But in the meantime, it's a very viable, interesting, growing business.
Posted by: charlie crystle | Oct 16, 2005 6:37:04 PM
Page, I don't think I get mySpace, but I'm sure you don't get it. It's not the content, or the design. Both of which, I think we can agree, range from mediocre to horrible.
MySpace is like the mall, or a club, it's a place to meet people, a place to be seen, a place to flirt with cute boys and girls who don't go to your school and maybe hear some new music. It's a place to go when your toddler is sleeping for 15 minutes to see who else is around.
It may not last, but I think the plebian garishness of it is a big part of the reason it's done as well as it has. Not everyone has good taste, or a way with words, but they want to express themselves. MySpace gives them a platform.
Posted by: eas | Oct 17, 2005 12:37:05 AM
A post on Anil's site led me to post here. There is something a lot of the so-called Web 2.0 people are missing in their evaluations of these businesses, and it stems from the fact that they THINK they are edge thinkers, but in fact, they are mostly old school. The don't realize that today, even a 20 year-old can be old school if they don't 'continually' update the way they look at digital business.
We can no longer look at a digital business in terms of what it will be doing in ten years. That model of thinking is now dead on arrival. By the very nature of digital business and its protean form, some businesses only have 2 years of real life in their DNA. BUT THAT DOESN'T MAKE IT A BAD BUSINESS. It's just the new rules of business. It took me a lot of experiments and entrepreneurial heart ache to learn this, but having roughed it out in online biz since '95, this is the mind shift I finally came to. MySpace WILL quickly become obsolete when the next new thing comes, but the Advertising dollars and user data that can be acquired in the 24 months they may have left is still worth a lot of money. A lot.
The model is running through the blog world that there are three levels of the Internet's consumer class:
The Digital Upper Class: Those who patronize iTunes, Netflix, Amazon...The same crowd that loved UrbanFetch and Kozmo. Committed pay-for-content people.
The Digital Middle Class: Those who dib and dab occasionally downloading the random illegal file, and sometimes paying for something online. People on the fence about paying for content.
The Digital Streets: Those who see the Internet as "theirs" and that everything they can get online for free, they should.
Guess what? Most kids are in the street category. What's fascinating is that the street analogy really fits when you think of the real street markets. On the real streets, tastes change on a dime, the hot place to be one week may be different next week. Now who, on the real streets, is consistently able to tap into the so-called street? Peddlers of porn, illegal Movies/Music, dance club promoters, sellers of counterfeit clothes/watches/shades. These 'businesses' are all thriving on the street, and, not surprisingly, they are also thriving on the web, more so than most other businesses. I think the key to tapping into the market that is the ever-changing web, is to think of it as a busy street in a dark corner of Shanghai. People are looking for a quick fix that won't get them burned, and makes them feel like they got a bargain somehow.
Jason Calacanis just proved it. Everyone working in the blog space knows his network of blogs was not a huge revenue engine worth $25 million. But Jason learned the Internet the hard way and realized he had to play it "street". He very agressively got in everyone's face about blogging (a space that was already doing a lot without his presence), made Nick Denton an artificial enemy (pure brinksmanship, strategic theater), and even though Weblogs Inc. was started as a network of niche business blogs (name ONE of Jason's niche business blogs that has taken off), he wisely realized that he had to eat Nick's lunch (by creating consumer oriented blogs like Engadget, Blogging Baby, Luxist, etc.) to gain mindshare. This move, no matter what Jason says, did not reflect his early blogged exec summary. But he wisely realized he had to play the web like a street vendor and go where the action is, cause a stir, make the buck, and move on. In Shanghai, I'm sure there's a kanji for the word, but in my native New York, we call that a hustler. Keep in mind I don't mean the word in any pejorative way-rather, when it comes to digital business, I think it's a compliment. Is there value in Weblogs Inc. or MySpace? Sure, but that value is fleeting, as are all valuations on the Internet. The only way big companies snapping up these properties lose is if they act too provincially and don't realize that the Upper Class of the web is a small niche, and the mass-micro-payment dollars to be harvested are on the digital streets and alleys of the Internet. Incidentally, I think it's worth noting that the Weblogs Inc. deal was a pure content deal -- Blogsmith was not part of the deal. It seems many people either aren't aware of this, or don't care to mention it for various reasons. The pipes (software) are very valuable, but in the end, consumers are mostly interested in the water (content).
All this pie-in-the sky web 2.0 talk of shared this, free that, social whatsit, it just that--talk. I love human-beings, but the change humans are undergoing because of technology isn't that we're about to all become altruistic lovers of our fellow man. The new tech just facilitates new ways of doing business with each other. Heck, even the saint called Craig Newmark makes money from his site. Sure it's not as monetized as it could be, but I'm sure the money they bring in is quite nice. The free part of Craigslist is the carrot. Ultimately, Craigslist is the best example of the Digital Streets of the Internet where hustlers, fast movers, and shape shifters rule.
This would be a little more obvious if so many of the Web 2.0 Old Boys Club (as termed by Anil) weren't so disconnected from what American kids are really doing. How many people who read this site know that not Eminem, not Britney, not Franz Ferdinand, not 50 Cent, but a relatively new/obscure white rapper named Paul Wall, debuted with a number one CD on BillBoard just a couple of weeks ago? This guy represents how profoundly youth culture has and will continue to change Every Single Day from now on. The only way to keep up is to think like a Shanghai (or Manhattan) street hustler. Sure, you may not want to do the dirty street work, but imagine if you had 30 guys around the city hawking cheap wares on the corner--moving and changing product as the market shifts daily...This is a model Jason exploited well, and it's being replicated around the Internet in tiny spots here and there. It's actually a very old, and simple, model that works. If it ain't broke...
Posted by: Adario Strange | Oct 17, 2005 1:06:58 AM
David Carr covers the MySpace.com thang in the Times today.
Posted by: Charlie Crystle | Oct 17, 2005 6:57:27 AM
What great and divese comments concerning MySpace. Interestingly enough we have a 16 year old that spends about an hour a night on MySpace.
I have to agree with Fred and hpe the naysayers re-think their positioning about its growth.
Maybe it is not the most cutting edge of portals but lets not underestimate the role each one of these kids play in what the exponential growth factor in subcribers also. Not a day goes by without hearing about who "is now on MySpace too!"
Reminds me of AOL in '92 and '93 when many of us were in our 20's and early 30's balancing careers, social lives, school and the internet. At the time there were very few junior and high school kids on line compared to now. Given that many kids today in the 12-16 year old range are doing their homework while on-line, setting up their social lives online and downloading their entertainment online I don't know how important it is to them as fara as what the site looks like presently. The fact seems to be that they have planted a flag, multitudes are following, and the metrics are reflecting it. Maybe we "adults" should remember (at least in SF and L.A.)some of our favorite Chinese, Mexican, and other ethnic restaurants can be little holes in the wall that are not much to look at...but boy the food and crowds can't be beat and the lines seem be a bit longer every season.
Posted by: Wayne | Oct 17, 2005 1:35:11 PM
great post.
I'd like to hear your opinion on friendster...
No one seems to talk about them anymore and I am personally getting fed up with their schitzophrenic corporate identity.
friendster changes their "look" almost constantly.
months ago, i wrote to management telling them they were losing old skool customers like me as friendster tried its best to turn into a my Space.
I even wrote about it on my own site, spewing such things as...the pressure is on for Friendster.
Friendster may be thinking that the virtual community space may be maturing -- or at least getting a little more crowded.
Threatened by shrinking profit margins, the site has had to ramp up on noxious advertising, which I see as a move on management's behalf to "get serious" on their promise to make Friendster a profitable entity ripe for exit (sale of the company to larger, established player)...
Management has done little to clean up spam issues on the site........
....Friendster now resembles a teenybopper bazaar and not the simple, self-respecting digital enclave I joined in 2003. what does my space's success mean for friendster?
anyone?
Posted by: catablast.com | Oct 18, 2005 1:39:16 AM
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