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.