Read on the NYT that once again, a major media company has bought a hot new online property or web application. Disney has bought a property at an astronomical price.
Let’s review. Myspace, Youtube, delicious, Flickr, Friendster, Skype.com, Upcoming.org, Deja.com, Blogger.com, Broadcast.com, About.com, Facebook, (the last is sure to happen any day now). How many of these are going to earn back the money spent to acquire it?
If I were to value media properties, here’s what I’d actually be willing to pay a high price for now.
- Reseller ratings –an absolutely outstanding consumer rating system of online resellers.
- Wiki-how: user-created tips about how to do things.
- Pirate Bay (of course I’d have to run it from Tanzania or some other inaccessible country with questionable IP laws)
- Jamendo: outstanding music sharing site connected legally to bit torrent..
- Librarything: book cataloguing site
- Netvibes –RSS feeds served on a page
- Craig’s List
- Linkedin — business networking site
Of course, I have no idea which of these properties would actually be money makers. And my guesses are based on my own usage patterns; I have no idea other than gut instincts about whether other people would find them useful. As I look over this list, I realize that as good as these sites are, I really have no idea whether these web properties would really pay off.
No matter. Big media companies need to spend their money on something –never mind that it may not be worth the asking price; they need to buy it before another media property does. It’s the advantage that comes with bigness: buying cachet even if it is short-lived. Big media companies need to do it; that’s their core mission and what distinguishes them from other companies. They buy up-and-coming brands and rebrand them as their own.
The core issue is: how to separate cool ideas from money-making ideas. Part of the problem is the strength of US patent law. Corporations are prevented from implementing obvious ideas, so they end up buying a license or buying the IP from the group that pioneered it.
I predict that Youtube will be overtaken by some other cool video clip sharing site and facebook will last for only a year or two before the cool people leave it for the Next Big Thing.
This slashdot discussion on the subject is revealing.