Online Media Cultist

It hit home for me this morning – not enormously revelatory of course to anyone paying attention – that we’re in the midst of a great and sweeping period of mergers and acquisitions right now in the tech and Internet space. We’re probably in something like the “latter web 2.0 days” of the Internet’s evolution, a time where big players are swallowing littler ones in an effort to grab market share, where the companies who produced the best ideas and services and were lucky enough to grab eyeballs and users and customers along the way are now setting themselves up for the long haul, and the sad shakeout of those companies who didn’t make it will continue to play out as spaces continue to become better defined.

Just taking a look at the news this morning, we see that Microsoft announced the acquisition of Rapt, a company involved with online advertising technology. Technology companies are now advertising companies, and Google, Microsoft, Yahoo, and so on have been gobbling up companies and technology left-and-right for the last year or two now in an effort to gain an edge.

We also see Microsoft still trying to strategize its way toward a merger with Yahoo. The argument goes that Microsoft + Yahoo > Google. We’ll see how that goes.

Moving on, we see AOL making great strides to propel itself back into the elite tech companies pantheon. Just this week the acquisition of Bebo was announced, and now rumors say that the acquisition of “out of the box” social networking platform Kickapps could be next.

As the economy overall remains jittery, I think we’ll see this overall trend continue. Soon enough though new-fangled semantic web services will appear, social networking will evolve to its next phase, online video advertising models and companies will mature, website traffic metrics will improve, and overall Internet usage will shift.

And then we’ll be in a new place, and it’ll be fascinating to see how it all plays out then as well.

AOL is furiously trying to break the bounds of its decaying empire, and it just might succeed in doing that.

But the price, my friends, is high. AOL announced that it will acquire social networking site Bebo for $850 million. Bebo is one of those social networks usually placed in the “middle tier.” It’s no MySpace or Facebook, but is strong and global and is among the most popular social networking communities in the UK, Ireland, and New Zealand. It also claims to be #3 in the U.S.

Rupert Murdoch, of course, was ridiculed several years ago for purchasing MySpace for $500 million, a seemingly outrageous sum at the time. But MySpace was and in fact still is the dominant player in the space so today the deal looks to be a relative bargain that will bring Murdoch and company great fortune.

AOL for its part will place its future in the hands of its AIM instant messenger, the dominant product in its space and, now, Bebo as well.

Interesting quotage:

TechCrunch: “AOL is clearly putting a massive effort into transforming the company from a dial up broadband provider into a company that has the competitive fire. The opening of AIM, mentioned above, is just one indication. The company has been releasing genuinely innovative new products and has also made a number of smaller strategic acquisitions over the last year or so.”

GigaOM: “AOL is talking some gobbledygook about marrying AIM, ICQ with a real social network. Whatever!”

Mashable: “As big as this news is by itself, the question that arises is: what does this mean for the Microsoft-Yahoo-Google-AOL love rectangle?”

paidContent: “VC firm Balderton Capital will reap about $140 million - nine times what it invested in Bebo less than two years ago - by selling its 15.7 stake in the social net to AOL.”

peHUB: “Bebo had been in the market for new funding to support acquisitions, particularly in the contextual and behavioral search markets. But that ended once acquisition offers began coming in. No comment on earlier reports that Yahoo was an interested suitor (which is now 0-for-2 on such efforts).”

After a week or so of swirling rumors, it has been revealed that Netscape is going to move its “social news experiment” (read = Digg clone) to a new URL at www.propeller.com. Meanwhile, Netscape.com will revert back to its old school portal roots.

In my view what all of this means is as yet unclear. The big question:

* Will Netscape spin the propeller once and leave it to its own devices?
The major players in the social news space are Reddit, Digg, and Netscape. If Netscape is left to wither and die (think = Myspace News… shudder) it will basically be exiting a space that I strongly believe has an enormous future that is just in its very opening stages. So it will be very interesting to see if AOL puts money and resources behind Propeller, or if the rebranding is simply a subtle way to get rid of it.

Netscape scout Muhammad Saleem is enthused about the news at any rate, while Mathew Ingram perceptively asks why the announcement was made ahead of the new site launch.

Referring to the announcement, written by Tom Drapeau, Ingram also fires off a great one-liner in noting that “at least Jason Calacanis knew how to market something with a little energy.”

Meanwhile, back at AOL/Netscape headquarters, you have to wonder why they’re putting their eggs more firmly back into the portal basket. Sure, a bunch of longtime AOL subscribers and ancient Internet users who hearken back to the Netscape browser days might enjoy finding their news and information in one place… but they can already do this at AOL.com.

I can’t help thinking that Netscape as social news engine is an experiment that is being killed before its time.

That said, like most experiments it has its imperfections. The site design and user interface is clunky, the decision to pay people to submit stories controversial (which isn’t necessarily bad), and the site performance is at times frustratingly slow (which is inexcusable for a large commercial site well past its launch).

But the mix of human editors and user submitted and voted upon stories is the future of online news, which translates more broadly to the future of news. It’s just that simple. I firmly believe that the vast majority of online news sites (social and “traditional”) will be doing some hybrid of this, and probably much sooner than later.

Netscape is (or was) the only large site experimenting in such a way, which means it had the pole position to become a major online news leader.

Maybe Propeller can spin its way to such a position, but I’m not optimistic at the moment.