AOL today told internetnews.com that it is building a social-networking site likely to compete with News Corp.’s MySpace.com.
“We have something that we’re working on,” AOL spokesperson Anne Bentley told internetnews.com.
Several AOL employees have left comments on various blogs echoing confirmations.
Social-networking sites only recently exploded into business relevancy. Many started paying attention when News Corp. bought MySpace for a $580 million two summers ago.
That site still dominates the field, topping Nielsen//NetRatings’s Member Sites chart with over 36 million unique visits in March. Users spent over 2 hours on the site with each visit.
Numbers like that make investors and media executives drool and fumble for cash.
Yesterday, for example, venture capital firm Greylock Partners invested $25 million into Facebook, which is nowhere near MySpace in popularity.
And that was after rumors of a $750 million acquisition bid.
Analysts note that social-networking sites appeal to a large and youthful audience. Web-savvy youth have cash to burn and no idea where to spend it because they haven’t decided who they are going to be yet.
Marketers love that kind of nubile malleability.
Further, Old Media such as Time Warner, News Corp. and rumored Facebook suitor Viacom lust for the New Media facelift a social-networking site can give their portfolio. Hence the ogling.
Forrester Research Analyst Chris Charron doesn’t mind AOL coveting a youthful audience, but he does suggest they not try to simply copy MySpace’s formula.
“I think it’s too late for anybody to create a MySpace killer site,” he told internetnews.com.
In many ways, AOL brought teens online 10 years ago with its Instant Messenger. At one point, they probably could have leveraged that success into a dominant social-networking site.
“I think that time passed about two years ago,” Charron said.
Instead, AOL spent years trying to out-portal MSN and Yahoo while failing to live up to the expectations set by its famous and disastrous merger with Time Warner.
Charron thinks AOL should return to innovation instead of, once again, trying to copy a successful rival.
“I think it’s a mistake to try and kill any existing site,” he said. “It’s much better to look to other areas and look to other types of applications.”
Charron thinks that with innovation, AOL’s social-computing offering could be much more than a second- or third-place MySpace clone.
“There are a whole host of social-computing technologies that AOL should be looking at. Look to creating a peer to peer video portal; look to some sort of meet-up technology; look to all sorts of technology,” he said.
But look though it might, the company’s code-name for their project, AIMspace, suggests that once again, a rival’s success with youth and money may have sung a siren song too strong for AOL to commit to original thinking.
