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The Consolidation Continues

By - November 17, 2006

Ross Levinsohn

Many others have noted this already, so I’ll just toss in my red cent – with Ross Levinsohn leaving Fox Interactive (as with Miller, he’s credited with success), and being replaced by a “seasoned television executive,” just as Miller was, it’s clear major media companies are in the mood to consolidate and leverage the investments they’ve made in online, now that they are certain the properties can make money. While one can quibble with MySpace’s ability to make money on traditional advertising, you can’t argue with $900 million from Google over the next few years. And AOL’s advertising business has been growing nicely in the past few quarters.

But putting traditional media execs in charge of these properties may not be the wisest move. First, it will take at least a year for them to grok what is going on and figure out the lay of the land. That’s a long time to wait, while more nimble natives like Google and Yahoo eat your lunch. And second, well, these are not folks who took risks and lived the space early, and when forced to make decisions, they might make the wrong ones. On the other hand, maybe this is a sign our industry is maturing. We’ll know in a year or so.

I am sure there is far more to this than meets the press, with stories on both sides. Both Miller and Levinsohn were kind enough to wait until the week *after* Web 2 to leave their posts, so I could unwittingly interview lame ducks on stage. So far, my first interview on stage – Eric Schmidt – still has his job, as do Ray Ozzie, David Filo, and Barry Diller. But watch out, guys. These things do come in threes….

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3 thoughts on “The Consolidation Continues

  1. Travis S. says:

    It seems to me that the big media companies just don’t get it. Advertising doesn’t seem to be working on TV, so why do they think they can apply the same ideas to the web? What the hell does a TV executive know about Internet advertising and the web? Here’s a prediction: A year from now they are going to be farther behind than they already are.

  2. Clayton says:

    Advertising does work on MySpace, at least for entertainers. It breaks from the longstanding tradition of cold advertorial one-sidedness, and allows for an unprecedented connectivity (or the illusion of) between fan and artist.

    One of the likely outcomes of the imbroglio with Universal will be that MySpace invariably becomes considerably less “cool” with the removal of content. This will be disastrous for the many Universal artists who use MySpace per its design: a promotional tool unlike any the world’s ever known. Take away the hipsters and what do you have? A frozen mammoth.

    You simply couldn’t ask for a better market research tool, either, but once it’s diminished, its demise will mimic that of meteoric P2P clients past. The kids will be onto something untapped, even more so than they already are.


  3. David G says:

    I agree – it seems we’re on the cusp of a frenzy as the TV networks look for more online real-estate.

    Do you think it is all sustainable or will prices eventually outstrip the deep TV pockets?