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AOL Makes a Bet on Blogs

The Time Warner unit sees a rare opportunity for growth.

Time Warner's


AOL, which bought blog-operator Weblogs last year, is beefing up its roster of online journals.

This week the New York media company launched, which covers some of the most widely held companies, including Time Warner,


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AOL plans to add companies to the roster and may expand Weblogs in other areas, including sports and music, says Jason Calacanis, the head of Weblogs.

"It's a very hard sell," says Calacanis, adding that sports and music blogs would need to attract consumer-goods advertisers, who typically want mass audiences. "What we do is niche. I am trying to figure out the model."

Though AOL has lately shown signs of improvement, it continues to be a drag on the world's largest media company. Google agreed to buy a 5% interest in AOL last year for $1 billion to help the unit capture more advertising sales and gain more traffic. AOL had 19.5 million members as of the fourth quarter, down 2.8 million from a year earlier.

Time Warner's blog push is the latest sign of the growing ascendancy of the Internet at the expense of more traditional media, as readers and advertising dollars continue to head online. Earlier this month, Time Inc., the company's magazine publishing unit, cut 250 jobs.

Advertisers are now looking to target their messages as specifically as possible. Other areas of interest for Calacanis include local blogging. He recently established

Blogging Ohio, a network of journals about the Buckeye state. In addition, he plans to continue to spin off blogs from his existing roster of titles, which include the tech forum


The blogging universe -- or blogosphere -- is about 60 times bigger than it was three years ago, according to

Technorati, which runs a blog search engine. The firm estimates that a new blog is created every second of every single day and that 19.4 million bloggers are still posting three months after they create their online journals.

For most people, however, blogging is an unprofitable hobby. Calacanis and his rival Nick Denton of

Gawker, which owns the blog of the same name, achieved success by creating networks of blogs. Advertisers like blogs because their audience tends to be well-heeled readers.

"One big site helps another site gain some momentum," says Rafat Ali, editor of the Web site "People are already familiar with the tone and expect the second networking blog to have a similar tone."

Calacanis' next move may be to revamp the venerable if faded Netscape brand, which Time Warner also owns. Earlier this year, PaidContent reported that Time Warner was going to resurrect the Netscape brand and put Calacanis in charge of the business, which would emphasize blogs. He declined to comment on Netscape other than to say that he has a "great affinity" for the Internet company, which was acquired by Time Warner in 1999.