AOL is shopping for blogs.
Having founded a magazine for IDG and starting a newspaper in Boston, CEO Tim Armstrong has fully embraced plans to turn the company into the Time Inc. of the 21st century.
He sees there’s money in it.
For example, Gawker media owner Nick Denton tells us his network’s Q2 revenues were up 42% year over year. But Gawker’s revenues aren’t nearly big enough to sustain a company the size of AOL.
So a big part of AOL strategy is to increase the number of blogs in its MediaGlow portfolio from around 70 to 100 by the end of the year. It’ll grow beyond after that, reaching for more and more scale.
Mostly, AOL will launch new blogs all on its own.
But we also understand AOL wants to achieve scale by spending some of the money it makes from its shrinking ISP business buying a few blogs.
What kind of blogs? Call it informed speculation, but we’d guess:
- They’ll have a specific audience in a demographic attractive to advertisers.
- If they don’t have scale, they’ll create good content that could scale.
- It’s not important that they have a mature ad sales force or developed ad products.
- Video blogs are a major priority for AOL.
- Email lists have proven to be valuable to brand advertisers, and AOL would look at them too.
- Overlap with an existing AOL blog isn’t a deal-killer, but that could mean hollowing-out the acquired blog to reduce redundancies.
- AOL will look at publishers who produce content only for mobile.
With Engadget already in the fold, AOL could own tech news by acquiring TechCrunch.
Problem is, TechCrunch might be too trade-y and too expensive for AOL, though ~$30 million is a far cry from the $1.8 billion CBS paid for CNET.
Founded by former Gawker managing editor Lockhart Steele, the Curbed network is the place to go for real estate porn.
With its local content, Curbed could also help AOL crack the local ad market. Curbed also owns the Eater and Racked sites.
One problem: Does anyone want to know what's going on in real estate right now?
If AOL wants scale, it wants the Huffington Post. The ~$90 million price tag is probably too high.
AOL thinks online advertising's future over the next 3 to 5 years will prove to be in video advertising.
We don't disagree. 80% of the U.S. online audience watches video, according to ComScore.
Brand advertisers, used to spending all their money on TV commercials, understand how video ads can tell a brand story whether or not they generate much clickthrough. This helps publishers charge a higher rate.
Next New Networks owns lots of portal-friendly content like TMI, a talk show that has a certain 'Good Morning, America' feel to it.
If Next New Networks is too pricey, AOL could turn to Revision3. Both video publishers have yet to reach massive scale, but daily traffic from AOL.com could change that in a snap.
Video shows work for portals. It's why the first thing MSN media boss Scott Moore did when he came back to Microsoft was make new versions of all the mini-shows he created for Yahoo.
AOL could pull the same trick acquiring NNN or Rev3 tomorrow.
Thrillist is an email that goes out to guys in their 20s and 30s and tells them where to eat and drink.
Because the email goes only to people who have asked to receive it, the ads are very valuable. A video ad sold against the email can fetch a $275 CPM.
Comcast bought Daily Candy, an email list for women also owned by Thrillist's investors, for $125 million last year. Anything in that price range might be too pricey for AOL.
AOL is interested in more than just traditional blogs.
For cheap, it could pick up SportyTweets, which aggregates sports news and sends it to ~350,000 Twitter followers. 20% of its users get their updates by text.
Tumblr was supposed to rival Twitter. It hasn't.
But if AOL were to buy it, it wouldn't just be getting a blog platform, it'd be buying the ability to advertise against a slew of relatively popular 'meme-blogs' like Garfield Minus Garfield, This Is Why You're Fat, Look At This Fucking Hipster and Pets Who Want to Kill Themselves.
Sure, these blogs are faddish and fade in popularity quickly. But owning the platform, AOL would be able to take advantage of them while they're hot and would have the inside track at acquiring any that showed signs of sustainability.
Founded by two of Gawker's most popular former writers, Choire Sicha and Alex Balk, one can assume The Awl attracts the same demographically appealing audience as Gawker.com.
Only the site would be much cheaper for AOL to acquire.
Though growing fast, the Awl's traffic is small. Of course, that's nothing a link or two from AOL.com can't fix.
Blog for women wowOwow.com gets more traffic than it should considering its horrible name and mind-crippling URL.
Of course, neither URL nor blog name matter when the traffic is coming from AOL.com.
With content from the likes of Candice Bergen, Lesley Stahl, Whoopi Goldberg and Peggy Noonan, wowOwow attracts the same audience demographic that's ABC's 'The View' such a hit with advertisers.
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