"Top executives now view AOL as a major source of growth for the entire company."

We can all be accused of following the latest press release, merger, take-over, or Technorati Top 100 entry at the expense of seeing a large picture. The web is nothing if not compulsively discoverable.
So when I hit upon Media Drop's post about the offloading of 18 magazines by Time Warner, and The New York Times saying it would sell nine TV stations, I thought it was time to put my feet up. But first I dug out the quote above.

What's interesting about these changes is the way it recasts the changing media debate. After recent posts I've been criticized for assuming that the blogging community can match the objectivity and surefootedness of established print media.I hardly thought my position was controversial and still don't. Where the debate gets sensitive is when you look ahead at how it will play out. Many people assume newspapers have an interest in fighting their corner and maintaining the core, traditional values of "news".

But the print media are businesses first and foremost. And I've made the point that they sniff free content, so why should they be left out?The point is while we may busy ourselves trying to figure out what the blogging community means to print, the print media executives are planning the transformation of their businesses. The argument is over.

Three weeks ago I sat down with a senior figure at the Wall Street Journal discussing the changing media landscape. The most interesting point he made relates to blogging but it also gives an insight into the real driver in the business of transforming print media.He made the point that with all the bureaux, expertise, history, branding, trust, and relationships that his paper has created, when he looks at who makes the top ten online destinations, there along with his own brand is a guy who's doing it all practically alone. And not just one but two or three depending on which vertical you look at.

For a business it makes no sense to hang on to a global bureaux structure when the breakthrough moment might come from one piece of talent, outside your organization. Maintaining the cost base that a newspaper currently bears is a nonsensical proposition, and that is what will drive change in the industry.That's why Netscape is now a fully fledged online magazine (not a particularly good one) providing ultra low cost content to the AOL community and beyond.

No doubt the Time Warner hierarchy would love for some original content to spill out of Netscape into their own magazines and newspapers. It makes perfect sense to use Netscape as a talent search (though first they have to attract more original content).
The problem is Netscape's position is not defensible as a business, until it starts providing cheap content across the Time Warner properties. It has the run on competitors right now but it has no defensible position when competition heats up. On the other hand it could provide costs savings to the owners.

The reality is not only that one guy can do what the Wall Street Journal does - in terms of attracting audience. But a bunch of friends can out compete with Netscape at the drop of a hat. And that in turn has you looking around asking, so what else can they do with that content? Where else can they save money? Cornering a source of free content is not a bad start.