A Reuters article recently stated that AOL is considering a a merger with Yahoo. While neither company is as popular as Facebook or Google, both make money and tons of it.
The article states a quote that neither Yahoo nor AOL can be as competitive as they once were as standalone companies, but together would be able to compete once again.
Some would say, "Compete for what exactly?" The answer is advertising that’s content-driven, and therein lies the crux. The question then is whether either company even if merged can produce magnet-like content that will drive people to them.
Both AOL and Yahoo would have to make concessions if they merged. Yahoo would have to shrink in size, and AOL would have to dump it’s legacy dialup business completely – and you’d be amazed at how much cash their dialup biz still generates.
Does the need for content-driven sites still exist?
Yes.
Here’s a few things that most people forget when it comes to what’s popular for web sites right now.
Facebook has no original content.
Every single thing on Facebook is user-generated. They have absolutely zero from-Facebook content with any express purpose of revenue generation. There is no news, no weather, no sports scores, etc. And any content like that is pulled from other sources; not from Facebook staff itself.
Google has no original content.
Everything in Google is pulled from somewhere else because their core business is search first and foremost. Yes, they have many services, but not a single one of them is a staff-made news and entertainment destination.
If you’re thinking, "But what about Google News?" Again, everything from there is pulled from somewhere else; none of it is written by Google staff.
Yahoo! and AOL do have original content. Always.
When you go to with the Yahoo! or AOL home page, what you see is news and entertainment, with content written by them. Yahoo! is the better equipped of the two because they also have direct links to other useful utilities like email, maps, weather, games, jobs, movies, real estate and the list goes on and on.
Destinations like these do matter. It’s the reason so many people set MSN as their home page even when they switch browsers. Why? Because you get a good potpourri of news and entertainment all in one place.
Would a merger of Yahoo/AOL result in a revived magnet destination? Unknown.
My personal opinion is that older portal-style sites have to become comfortable with the fact that it’s best not be social destinations. There are still millions of internet users out there that couldn’t give a crap about social media and prefer magazine-like sites like Y! and MSN. The best course of action for portal sites is to simply be the best at what they are and stay the course. To be the best, they have to have the best magnet-style content. Yahoo! in particular is really good at that, but they do need to get the hot stories faster. If they can do that, be it with an AOL merger or not, they’ll be a great magnet destination once again.
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