The New Media Elites
The question for the traditional media powerhouses, with their troves of content, is which role they want to assume: simple providers of content on whichever portal suits them, or portals unto themselves, offering search (the biggest magnet for advertising right now), instant messaging, E-mail, and other services directly to their users.
News Corp. is taking the portal approach and plans to add E-mail, search, and voice services to its Web offerings. Disney, burned from its Go.com portal venture, is now spreading its money around, investing in mobile phones, interactive television, and other advertising-supported websites. Steve Wadsworth, president of Walt Disney Internet Group, says the company has learned a lot since the Go.com days. "Just because something is cool doesn't mean people will do it," he says. "People do change their behavior, but it happens more slowly than you think and often in different ways than you expect." The ability to download a movie over the Internet to your computer doesn't necessarily mean you want to. But if you can download it onto Apple's new video iPod, that may prove more appealing. In February, the company will launch Mobile ESPN, a cellphone service that gives users immediate access to real-time sports scores, news, columns, fantasy sports team management, and video highlights they can find on ESPN, which is owned by Disney.
Some of the hottest approaches to the Web, being embraced by new media and old alike, are sites like MySpace.com, Facebook.com (story, Page 58), and Flickr, where users create the content and the online community. The beauty of user-generated content is that it is free and almost limitless, and ads can be sold against it. MySpace, for instance, is adding 125,000 new, mostly teenage users each month, who spend an average of one hour and 40 minutes a month on the site, writing blogs, listening to music, and viewing each other's home pages while browsing ads from the likes of Nike and other consumer brands. But free content alone wasn't enough to justify News Corp.'s spending more than $500 million for the site, and the entertainment giant, which owns Fox Broadcasting, has no illusions about how quickly cool can shift to cold. "The great thing about MySpace is what the users give each other. They're the evangelists of the business," says Ross Levinsohn, president of Fox Internet Media. "But we have to continually give them features and products and the ability to make it relevant, to make it work. We need to keep growing their engagement." To that end, Fox plans to use MySpace as a giant focus group, testing its new fall TV pilots online or floating ideas from its hit teen shows American Idol and The OC and having MySpace users weigh in with their take.
Yahoo!'s research shows, for example, that even limited user reviews of movies, cars, consumer products, and travel experiences are surprisingly popular--and can draw ads. "A small number of users give reviews, but large numbers use those reviews," says James Slavet, who runs Yahoo!'s auto and travel sites. "Expert views are really important. But other users' opinions are another angle on making a decision."
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