Friday, November 17, 2006

The Next Generation: Major Media Companies Retire their Web 2.0 Pioneers

In a pair of interesting announcements Fox Interactive Media, which holds social networking portal MySpace as its primary asset, is putting its President Mark Levinsohn out to pasture, as reported by Staci Kramer of speculates that the move may have been triggered by the exit of FIM COO Mark Jung, whose duties Levinsohn had been covering. Meanwhile over at AOL Jason Calacanis, erstwhile weblog impressario and reinventor of AOL's Netscape portal, is also on the way out according to TechCrunch, apparently due in part to AOL's chief executive Jonathan Miller exit. In both instances you cannot fault these executives efforts in establishing healthy media properties: MySpace continues to grow traffic and Netscape, after a transition into its new social news bookmarking persona, seems to have found its footing in the traffic rankings. Instead, it appears as if Time Warner and Fox have decided to start cranking up the profits in their Web 2.0 properties in the hands of seasoned media executives familiar with how to draw in big-name advertising dollars.

This is not necessarily a bad thing, but it does signal a watershed of sorts for Web entrepreneurs who had hoped to make the most of marriages with major media companies. As is so often the case, vision and line management skills to toe the bottom line do not always go hand in hand. But at the end of the day these moves probably have less to do with the skills and personalities of the people involved than the realities of how quickly advertising dollars are likely to be shifting to contexts defined by social media properties. The major media companies want to make sure that they get this transition right, so that players such as Yahoo, already amassing their own impressive stable of social media assets and with strong ad networks of their own, will not beat them to the punch with major advertisers.

In an era in which convergence is no longer just cocktail chatter but a rapidly approaching reality social media properties in the hands of these ad-driven executives are going the be asked to shoulder significant revenues for these companies in the near-term rather than as a down-the-roader - a move that may break some of the delicate chemistry between user-publishers and their products that holds loyalties together. It's a little bit harder to fire audiences than executives, after all. In some ways we may be seeing a replay of the ill-fated initial marriage of AOL and Time Warner - except that this time it's not the "Old Media" guy on one side of the announcement podium and the "New Media" guy on the other, but instead the "Merged Media" people confronting users who are nowhere near the podium. Best of luck to those leaving and those staying at AOL and FIM - hopefully there are plenty of geese with golden eggs for everyone...
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