The Walled Garden that is Facebook

Post ImageSometimes I get too excited about Facebook. I use it every single day, and I think it’s a great tool, but it’s far from perfect. That’s why I read blogs written by people like Jason Kottke, so that I don’t lose perspective completely. Earlier this week, Jason called Facebook the new AOL:

What happens when Flickr and LinkedIn and Google and Microsoft and MySpace and YouTube and MetaFilter and Vimeo and launch their platforms that you need to develop apps for in some proprietary language that’s different for each platform? That gets expensive, time-consuming, and irritating.

As it happens, we already have a platform on which anyone can communicate and collaborate with anyone else, individuals and companies can develop applications which can interoperate with one another through open and freely available tools, protocols, and interfaces. It’s called the internet and it’s more compelling than AOL was in 1994 and Facebook in 2007.

He’s so right.

I don’t know if Facebook will end up like AOL has, and it certainly won’t be mailing out CDs anytime soon, but the comparison is still fair.

Walled gardens might seem like a good idea initially, but eventually the walls will crumble.


AOL Buys Weblogs Inc.

Post ImageNews has been circulating since late last night that AOL has purchased Weblogs Inc. which publishes an entire network of blogs, including the very popular Engadget. Terms of the deal aren’t yet known, but various bloggers have been suggesting anywhere from $25 to $40 million USD, which certainly makes sense as the company makes at least $1 million in annual revenue from Google AdSense alone:

Weblogs, a privately held Santa Monica, Calif.-based company, operates 85 blogs with subjects ranging from parents to technology to film. AOL said Thursday that it will integrate the blogs throughout its network, such as within its television, travel and personal-finance channels.

“This…combination allows our audiences to be able to do a ‘deep-dive’ into a vast array of compelling topics that keep them interested and entertained on our network of properties, day after day,” Jim Bankoff, executive vice president of AOL’s programming and products, said in a statement.

While I think it’s a smart purchase for AOL, I am surprised quite frankly. My thoughts are more in line with Nick Denton’s:

Nick Denton, publisher of blogging site, was skeptical of the deal. “The whole point about blogs is that they’re not part of big media. Consolidation defeats the purpose. It’s way too early,” he said, adding that Gawker is not for sale.

That said, the deal will give AOL a very heavily trafficked collection of content properties, which of course is great for advertising dollars. What does this mean for the rumored Microsoft-AOL deal? My guess is that if anything was on the table, this deal won’t have much of an impact.

The downside to the deal is that Engadget and others will probably be peppered with Netscape and AOL advertisements. Not looking forward to that!

Regardless, as Weblogs Inc. founder Jason Calacanis posted:

You’ve got…blogs!

Read: CNET

Google's Defense on AOL

Post ImageYou might recall that last week I mentioned there were rumors of Microsoft talking with Time Warner about AOL. At the time, I said it would likely be a play for access to the content that AOL controls, but it’s pretty clear now that Microsoft talking to AOL is more a business tactic – they want to eliminate the revenue Google gets from AOL. So news of a possible Google takeover of AOL should be no surprise:

Google could try to bid for America Online to preempt a Microsoft takeover and protect the $380 million in revenue Google gets from its biggest partner, according to an analyst.

“We believe it is entirely possible that Google could consider making a bid for AOL as well,” Lauren Rich Fine, an analyst at Merrill Lynch, wrote in a Friday report on the implications of an AOL-Microsoft Network deal. “This would certainly protect Google’s revenues from AOL as well as enable Google to keep 100 percent of the search advertising revenues as well as gain a significant amount of content.”

This is so much more exciting than Microsoft versus Netscape or any of the battles of the past, because Google has tons of cash too. Not as much as Microsoft, but enough to make things interesting.

Read: CNET

Microsoft to buy AOL?

Post ImageA number of publications including the New York Post and Reuters reported this morning that Microsoft is in early talks to make a deal with the AOL unit of Time Warner:

“There have been talks on ways Microsoft and AOL assets can be better leveraged and they’ve taken place over the normal course of business …,” the source said, calling reports of a joint venture “way overblown.”

Although the talks, which have taken place over several months, could advance, nothing was imminent, the source added.

Low-ball estimates for AOL are about $10 billion with improvements possibly doubling that valuation, Richard Greenfield, an analyst at Fulcrum Global Partners, said.

If Microsoft were to buy the assets, you can bet they’d merge it with the MSN unit. Otherwise, the deal could simply be some sort of cross-advertising agreement, which would be good for Microsoft as they’d probably acquire access to the vast content that Time Warner owns. AOL has been dying a slow death for years now, so I’m not sure what Microsoft would want with the company besides advertising and content possibilities.

Read: CNET