AOL Spaces: Great Idea, Five Years Too Late

No, I haven't checked out the new AOL MySpace killer (AIM Pages), and, yes, I suspect this admission will prompt a dozen comment bombs railing about how analysts don't even bother to use the products of the companies they are analyzing.  So be it.  My prediction: Even if the AOL product is ten times as good as MySpace (whatever that means), it is going to bomb.

Why?

For the same reason that AOL instant messenger still dominates instant messaging: it's where the people are.  MySpace is about community, and MySpace has the community. Unless MySpace suddenly unplugs itself or sells out, the community isn't going anywhere.  (Yes, I know, the AOL product is built for AIM users, so there's a built-in community, but most AIM users who want MySpace-like features are probably already using MySpace).

True, for an AOL (and Time Warner) shareholder, this situation is agonizing.  AOL is about community, too--or was--and five years ago, AOL ruled the MySpace demographic.  All those people that today use iPods, MySpace, Skype, and craigslist?  Five years ago, they all used AOL.  Now, most of them wouldn't be caught dead using AOL.

Whose fault is this?  A combination of AOL's former management, who decamped to run Time Warner (and failed), and Time Warner's current management, who celebrated arrogant AOL's self-destruction right up until the moment they realized they, too, were going down with the AOL ship.  After finally waking up two years ago, they've made a few smart, bold moves, but only a few.  And, unfortunately, in the "space space," as well as in VOIP, portals, music, and a half-dozen other promising spaces, it's too little too late.

P.S.: I tried to find AIM Pages, after all, just to make sure I wasn't making an ass of myself.  I couldn't.  So perhaps the WSJ hallucinated.

P.P.S.: Given that MySpace is launching a Messenger product, there is probably a smart partnership or sale opportunity here.  Time Warner clearly doesn't want AOL.  There is clearly still value in AOL.  Perhaps Rupert would like AOL?  If nothing else, it would save MySpace the hassle of having to break into the IM market.

Disclosure: Yes, I still own the bag of rocks known as TWX.

Comments

[KING TROLL]

FIRST!!!

I BROKE MY HAND BROS. HAD KNOCK THIS FOOL OUT. IM OUT OF COMMISSION FOR 1 MONTH AND DOC TRIED TO GIVE ME PERCACETS, I SAID HELL NO IM NO DRUGIE. ILL DEAL WITH THE PAIN. SHIT SUCKS BUT ITLL BE ALRIGHT. CASN ONLY TYPE WITH ONE HAND

[Anders Kargaard Jensen]

Henry - you still own Time Warner and you still own Yahoo! - why don't you swallow that pride and get into Google? Its on sale currently - and its not because they are not growing enough.. also You talk about You are not in Google because the value is too high.. if you look at the current P/E its only marginally higher than Yahoo! - and Google is like growing 3-4 times as much per year.

Come on Henry - swallow the fact that you didn't get in early enough - and get on the Google train.. Google will continue to hurt Yahoo! growth like they have the last 3-4 years.. At least diversify and get a piece of Google - for some of your Yahoo!

Give me a good reason not to buy Google now, and I promise I will find the argument to win over you ;)

Everything is meant in a positive tone, in case its not clear..

[RS]

Myspace will only be popular until fickle teens move to the next fad (videoblogging on YouTube?).

AOL will always be playing catch up, they're never going to be fashionable again (unless there is some AIM retro movement in 10 yrs) so why even bother with that demographic.

[rick]

AOL should concentrate on the kids that are too young for myspace. They own the gradeschool-aged kids (tweens?) because their parents like the AOL parental controls.

However, as soon as they're old enough, they venture over to myspace where the big kids are.

[Steve D]

I know it's a small sample, but everyone I know of pretty much reflects my own attitude: AOL is irrelevant. They do have some nice assets like AIM and MapQuest, but overall emotional attitude is 'dying dinosaur'.

[Victor]

Yahoo sees no financial gain from ad system in '06

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060517:MTFH75191_2006-05-17_18-52-51_N17322434&symbol=YHOO.O&rpc=44

these guys are years behind Google in this game and they're slipping further and further behind. The secular trend away from Yahoo seems pretty clear to me, just from reading the tea-leaves. And don't even get me started on MSN.

[RS]

Don't be too hasty to write Yahoo off. Adwords systems are just the DoubleClick of 2006.

Let's see what 2007 brings - Vista, IPTV etc. will redefine the playing field - and we don't even know if Google are going to field a team in that game yet.

[Bruce L]

I'm not sure how to find AIM pages outside of using AOL Messenger- but, AIM pages annoyingly pops up whenever a user logs on.

[Walter]

king troll,

Do a service to humanity and particularly to this blog, break the other one.

[jakewolf]

It's all about the communities. Yahoo groups have spawned off countless businesses, myspace killed the record labels, and everyone talks on AIM. If you want to see how smart the guys at google are just take a look at my blog as I make fun of Google Finance.

PS: If you want to leave a message for a friend who obsesses over certain stocks and uses google finance let's talk. Being "punked" by google finance is now possible.

http://compound1000.blogspot.com

[Dimitar Vesselinov]

AIM Pages vs. MySpace IM
"Unsurprisingly, MySpace has a clear advantage in this virtual turf war: not only is MySpace perceived to be cooler than so-five-years-ago AOL, it is far easier for a consumer to migrate from one IM service to another (thanks, especially, to IM integrators like Trillian) than it is to migrate an entire byzantine network of friends, photos, and blog posts to a new social networking site. Perhaps AIM pages will help AOL stop the bleeding, but IM will advance MySpace's efforts to tap into its massive and entrenched user base to grow page views, continuing its disruptive march."
http://www.innosight.com/blog/index.php?/archives/52-AIM-Pages-vs.-MySpace-IM.html

[Eric Bradbury]

"It's where the people are." Henry, you could not be more correct in this simplified analysis. In my experience, college students (like myself) use facebook; highschoolers, "hip" adults, stalkers, and trendy commercial vendors with an affinity for nerdy gloating use myspace; and no one uses or (presumably) will use AOL's version. These spaces are already established enough to create a network effect. Not only is AOL unfashionably late to the party, but superfluous features on facebook -- such text message alerts -- will probably ensure that AOL cannot achieve a technological advantage anytime soon causing users to flock to their service.

[ugurss]

thanks admin good post
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