The New Media Elites
Ebert and Roeper, in other words, had better make way for Joe from Dayton. User content is the core offering of some of the fastest-growing sites, including Wikipedia and Instapundit . Yahoo! now builds new services specifically to take advantage of its users' proclivity to weigh in. A new product just rolled out, called Trip Planner, allows travelers to pull many Yahoo! services, such as airline and hotel reservations, local maps, and sightseeing guides, into one document they can print out, like a mini travel guide. They can also go further and ask other users for tips. And once they've traveled, users can create public blogs and slide shows of their trips for others to use. "A lot of the time, you don't want a 600-page guide," says Slavet. "You want 10 pages personalized to you."
Blog it. Buying into the blogosphere is another way big media companies--old and new--can connect with their users. AOL recently paid a reported $25 million for Weblogs Inc., a conglomeration of advertising-supported blogs covering everything from gadgets (Engadget.com) to autos (Autoblog .com). "Although blogs don't typically generate much revenue, blogs are low cost, low production, and you can get in quickly," says Jim Bankoff, executive vice president for programming and products at AOL. Blogs also give a big portal like AOL a way to divvy up its audience for advertisers into influential microcommunities. "If there are three people in the world you want to call up and ask what they think about a car, those people hang out on Autoblog, " says Bankoff. That said, once a media giant like AOL gets its grip on a blog, the blog loses its outlaw flavor, and its audience may be next.
In fact, it won't be long before all the new media are old enough that they start losing their rebelliousness and looking a lot more like their old-media predecessors, with thousands of employees, big bureaucracies, and heavy market pressures. "They're going to start acting like their parents," says analyst Vogel. "And inevitably they will disappoint people, have a down quarter, and the stock market reactions will be severe."
If history is any guide, that moment could occur anytime. It was only five years ago that the first round of Web frenzy came to a crashing end when many Internet stocks (and the companies behind them) lost all of their value. But there is a crucial difference now: The Internet leaders today actually are making money, gobs of it, with Google alone sitting on $7.6 billion in cash. That exceeds the current market value of Knight Ridder--what investors currently think the newspaper chain is worth--by a cool $3.5 billion.
NEW MEDIA, OLD MONEY
As advertising shifts to the Web, the leading Internet sites are raking in the big bucks.
COMPANY 3Q REVENUES 3Q PROFITS
Time Warner (AOL) $10.5 billion $897 million
Disney (ABC) $7.7 billion $851 million
Google $1.6 billion $381 million
Yahoo! $1.3 billion $254 million
New York Times Co. $791 million $23.1 million
Source: Companies. Note: Disney's third quarter ended July 2.
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