AOL Could Be King on Online “Magazines”

There is a very smart, clear, article in TBI that looks at one of the cornerstones of AOL’s plans now that they’ve been spun back off of Time Warner:

The model goes something like this: Find a vertical with an audience attractive to advertisers, brand it (Daily Finance, Asylum, Lemondrop, Politics Daily), hire five to seven people to run it and plug in AOL’s traffic fire hose. Repeat.

It’s not like isn’t being done by others. Nick Denton’s mini-empire has a very similar model and, guess what, it remains profitable while the traditional dead-tree magazines are dropping like so many flies.  The main reason to think AOL might succeed here is that they are building a digital-age system from the ground up, not trying to shoehorn an old business model into a new universe.

They’re the antithesis of the kind of quality standards Time Inc. and Condé Nast tout, relying largely on aggregation, blogging and traffic-goosing tricks such as provocative slide shows. But unlike the print publications trying to port their cost structure to the web, these publications can be cash-positive from the start. In fact, one could argue these sites cropping up represent today’s version of the magazine launch — after the old, splashy kind died with Portfolio.

And, as TBI finally points out:

Then you’ve got an economic environment tailor-made to building this business. Traditional magazines are in disarray, talent is cheap, and audiences are splintering and accepting of new brands. AOL has more than 300 people producing these sites in New York and has contracts with about the same number of freelancers. In the past six months, AOL has hired more than 50 journalists from places such as the Associated Press, Washington Post and USA Today.

If you are looking for the future of news, you might get a good idea by paying some attention to that old internet warhorse, AOL.

Let’s just hope they don’t starting sending out those damn CD-ROM’s again.