A Fairy Tale: AOL Was Facebook a Long Time Ago
February 8, 2012
The Wall Street Journal amuses me. A Murdoch property, the newspaper does its best to minimize the best of “real” News Corp. journalism. I appreciate objective editorials which present oracular explanations of meaningful events in the world of “real” business.
A good read is “How AOL—Aka Facebook 1.0—Blew Its Lead” by Jesse Kornbluth. What is interesting is that this is a report from a person with Guccis on the ground. According to my hard copy edition, February 8, 2012, page A15:
Mr. Kornbluth was editorial director of America Online from 1997 to 2003. He now edits Headbutler.com.
I did a quick search on Facebook 3.0—aka Google—and learned from no less an authority than the Huffington Post the Mr. Kornbluth edits a blog which is a “cultural concierge service.” He is a “real” journalist and has been a contributing editor for Vanity Fair and new York, and a contributor to the New Yorker, the New York Times, etc.”
The addled goose is still in recovery mode, sort of like a very old restore from the now disappeared Fastback program. Thinking of old software and AOL, I think in 1999America Online was in hog heaven in terms of stock price. I recall shares coming in the $40 to $100 range. The accounting issues of 1993 were behind the company. The merger with Time Warner was a done deal by mid January 2000. The $350 billion was a nice round number. The New York Times marked the 10th anniversary in its “analysis” on January 11, 2010, with the story “How the AOL-Time Warner Merger Went So Wrong.”
Now I learn that AOL was Facebook 1.0. I had forgotten about AOL’s chat rooms. When I think of chat rooms, I recall CompuServe, but I was never into AOL despite the outstanding marketing campaign with the jazzy CD ROMs that seemed to be everywhere. Here’s Mr. Kornbluth’s Facebook parallel:
Community drove the growth of the service. And grow AOL Did. A million members in 1993. Five million 1998. And from there, exponential growth, another million every 125 days, all of them eventually paying $23.95 a month to enter our walled garden. For the most part, they stayed there too.
So what happened? Here’s the explanation which exonerates “real” journalists and MBAs:
I don’t believe management was evil or stupid. The shortsighted approach of the MBAs had a simpler origin: They didn’t use the service the way members did. They didn’t know how often Community leaders talked would be suicides off the ledge or how many desperate housewives found recipes and advice. All these points of deep engagement were driven from the bottom, from users. (Note that there are only two businesses that call the customers “users”—drugs and the Internet. For management, though, AOL was just an Instant Message service by day an email service by night. The ultimate verdict: Since advertisers shunned Community, what was it really worth? Very quickly, Community became AOL’s ignored child.
Interesting but several thoughts crossed my mind:
- What’s with the “they”? Wasn’t the author in management? If so, what actions did he take to make this Community point and drive the message through. I think there are usage data to trot out? There are in most organizations opportunities to give briefings or present alternative ideas are there not?
- If community were so obvious to AOL, it strikes me that community is a bit like Microsoft search. Management tosses in functions to make the service or software that much more valuable. Perhaps the core problem has more to do with attentiveness and motivation than what some MBA thinks or believes.
- AOL, like Google has today, many different products and services. The fat, friendly days of dial up modems were going away. The alleged financial cartwheels were like catnip to some I surmise. With myriad opportunities, was the whole ball of wax unable to figure out how to set priorities on tasks which mattered strategically?
The net net is that AOL did not know what it had beyond the dial up business and what could be done with those captives.
Facebook is not AOL. Facebook is not Google. Facebook faces challenges, and none of them has much to do with AOL. What is important about this Wall Street Journal editorial is that AOL is reaching for a semantic link to Facebook. What will a semantic tie up generate? Maybe some clicks. Otherwise, AOL is, like Yahoo, in for an interesting year. And search at AOL, well, there once was PLS, then Fast, and now who knows? I will ask someone of Facebook, which seems to be increasingly useful. Many Xooglers find Facebook a useful information service. Community? Don’t know.
Stephen E Arnold, February 8, 2012
Sponsored by Pandia.com
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[…] A Fairy Tale: AOL Was Facebook a Long Time Ago Beyond Search: A good read is “How AOL—Aka Facebook 1.0—Blew Its Lead” by Jesse Kornbluth. What is interesting is that this is a report from a person with Guccis on the ground. […]
[…] A Fairy Tale: AOL Was Facebook a Long Time Ago Beyond Search: A good read is “How AOL—Aka Facebook 1.0—Blew Its Lead” by Jesse Kornbluth. What is interesting is that this is a report from a person with Guccis on the ground. […]