This past September (prior to Google's acquisition of YouTube), while on stage at MIT's Emerging Technologies Conference, AOL Chairman and CEO John Miller noted that YouTube would not last as a stand alone company for very long. He was also asked if that meant AOL was trying to acquire the social video sharing site. The week after, in my summary of what he said, here's what I wrote:
Last week, at MIT Emerging Technologies Conference, AOL Chairman and CEO John Miller predicted the YouTube would get acquired. When asked by a Reuters reporter if that meant that AOL was considering an acquisition of video sharing site, he made it clear that he wasn't going to confirm or deny anything and simply asked the question "Does anybody believe YouTube will be independent in five years?"
Now, at the Web 2.0 conference taking place in California, Miller has admitted that AOL was one of YouTube's suitors and that it simply couldn't play in Google's league. According to Juan Carlos Perez:
AOL LLC wanted to acquire YouTube Inc. but Google Inc. was the only company in a position to put together the US$1.65 billion all-stock offer that landed it the deal with the video sharing maverick, AOL's chief executive officer said Wednesday.
"Anybody [in the Internet space] who wasn't interested in YouTube was either asleep or not being honest," said Jonathan Miller, who is also AOL chairman, at the Web 2.0 Summit in San Francisco, responding to a question from conference chair John Battelle.
Miller's comment about "interest" is notable for those who follow the media business. When I'm asked to speak about new media trends, I often note that the last time I checked, most media properties are like any other business. They're interested in growth, not shrinkage. And right now, a lot of the established media companies are experiencing what I call the attrition affliction. With a relatively fixed average amount of time to spend with content, once someone votes with their eyeballs by spending time with a new "channel" (be it a Web site, a television station, or even a podcast), that time is usually "stolen" from another channel that that person used to spend time with. Generally speaking, most people don't increase the average amount of time they spend with content. When they find something new that they like, they just reallocate.
My father, who spent his entire career in the media business (yeah, the fruit doesn't fall far from the tree), taught me about the three-legged stool of media. One leg represents audience. One leg represents advertising. One leg represents content. Pull any one of the legs out, and the stool falls over. Right now, a lot of stools (particularly in newspaper land where I heard that readership is declining 6 percent year over year) are teetering.
This reality is causing major indigestion for the establish media most of which cannot organically reverse these attrition trends. The net effect is that to put their businesses back on the growth path, they have no choice but to bulk up the audience leg through acquisition. This is what made YouTube so attractive and this trend is what will eventually work its way through the blogosphere (my prediction) particularly as the news and commentary media realize that the only path to significant audience growth (the kind that can make an immeidate and material difference to the business) is to acquire it and that, increasingly, the best audiences to acquire are tuned into certain bloggers. This is also one reason that bloggers should always remain in control of where there blogs are stored as well as their RSS feeds. Long term, that will be important leverage in the open job market.