AOL’s recent announcement that it was launching a number of new “micro-sites” marks another step in the evolution – and struggle for survival – of one of the initial mega-portals on the Internet, which for many was their first connection to the Web…sort of a digital first kiss. Check out this article on Wired for details. AOL’s experimentation was caused by the implosion of their original business model about ten years ago – charging millions of subscribers for access to the Web (via dial-up!) within the context of a closed environment. That was fine while it lasted, but the model became irrelevant when dozens of competitors began offering cheaper and faster connections and users made it clear being behind firewalls was no longer acceptable.
This latest move reflects the ongoing strategic exploration that seems to vacillate between a focus on prominent portals – be they Google or Yahoo – or building numerous sites designed to reach ever smaller on-line communities of interest. Clearly, AOL is moving as fast as it can towards the latter. The strategy can work, but the challenges of drawing (and retaining) an audience and somehow making money remains. In fact, it may be harder to draw users to these smaller sites given the increasing number of blogs, sites and online forums competing for traffic. As an aside, Kudos to AOL for finally opening the door to links to/from their sites, which will allow them to spread their networking reach and make their content much more credible and dynamic. Anything that presents a hurdle to users – be it a registration process, entry cost or difficulty getting information – is a very big negative in the increasingly free-flowing and inter-connected Web.