Two companies that deal in information took opposite approaches to content, the consumer, and the impact of both on business last week. Time Warner's (NYSE: TWX) America Online said it will provide more of its proprietary content for free, while news agency Reuters (Nasdaq: RTRSY) is ripping the free content it offers to other sites.
AOL's move shouldn't be too surprising to those who have followed the Internet service provider's fortunes. Not only is the average Internet user more sophisticated than in AOL's heyday, but high-speed Internet is cheap. Free email from Microsoft's (Nasdaq: MSFT) Hotmail and Yahoo! (Nasdaq: YHOO), and even possibly Google, also pose a threat. Not to mention, search functionality is, of course, the new killer app.
Flagging subscriber numbers have led AOL to new ideas for retention. Now, it's come around to the idea of letting potential users sample its content, such as concerts and news.
Meanwhile, Reuters plans to curtail its free content, hoping to woo consumers to its own site. MarketWatch.com (Nasdaq: MKTW) reported that 40 online publishers will be affected by the move, including its own site and Microsoft's MSN Money.
Indeed, for many individual investors, Yahoo! Finance's news feeds might spring to mind, whereas Reuters is a keystone of free bulk business and stock news. (Individual investors may not miss its updates on pork belly futures and the like, but I digress.) Incidentally, Dow Jones (NYSE: DJ) -- publisher of The Wall Street Journal, one of the original success stories in paid Internet content -- recently pulled its own news feed from Yahoo! Finance with little fanfare.
Reuters' plans are an attempt to garner some of those robust advertising revenues that are bolstering profits at Yahoo! and others. Eventually, its significant content will be available on a subscription-only basis.
Whether stand-alone Reuters will attract high levels of Web traffic is questionable. Though it worked for WSJ, will Reuters have the same draw? There's a lot of information out there, and this will require that consumers change their traffic patterns or pony up for news that has been free for years, unless Reuters plans significant value adds such as WSJ's online version boasts. Meanwhile, competition's still steep -- MarketWatch and Thomson (NYSE: TOC) are teaming up to create a news feed of their own, a move that jilted Reuters.
Though there are forces at work that support the decisions, both AOL and Reuters seem to be showing some late-onset desperation over the idea of having missed the party. However, embracing the free Internet with its content may work very well to remind users that AOL exists -- Reuters' move to isolate itself now may leave it out in the cold.
Too much information, too little time? Consider monthly stock picks in
Motley Fool Stock Advisor
.
Alyce Lomax does not own shares of any of the companies mentioned. She's been a WSJ Online and Yahoo! Finance user for many years.
Terms & Conditions
RSS Headlines
Fool UK