AOL's Advertising Advances

Interesting to see that AOL in the US is reportedly considering offering its online services for free to anyone with high-speed Internet access.

It is an open secret that AOL wants to transform its business into a more advertising led proposition and in a world where free email accounts such as Gmail, Hotmail and Yahoo! Mail are offered by its closest rivals, the company is finally realising that charging for basic online services is not the best model.

Apparently charging for these services accounts for up to 80% of the company’s total revenues. Compare that to Google, which makes nearly 100% of its revenues from advertising and happily offers free email and storage services to users.

It would be a bold move for AOL to take this strategy and it could attract a lot more users that would in turn attract more advertisers, but the transition will have to be handled carefully with the Wall Street Journal predicting the move could cost it about $2bn in revenues.

The UK unit of AOL faces a similar problem. The ongoing sale discussions over its access business will leave it as an advertiser led concern with content at the fore, it will be interesting to see how it pans out both sides of the Atlantic.

Down With the Kidz

The rise of social networking sites such as Bebo, Faceparty and MySpace seems to be getting everyone’s knickers in a twist recently.

Media reports have flagged up everything from bullying to paedophiles using the services and whilst conservatives are calling for stricter regulation of these sites, the UK Government has warned that regulation will only drive children onto unregulated sites.

So what is the answer?

At the end of the day you are not going to be able to shut down social network sites. They are not just sites; they are a social phenomenon that has been created by the advance of technology. If you shut down or heavily regulate sites like Bebo, Faceparty or MySpace then what is stop kids from simply creating their own sites and linking them together? What are you going to do then? Shut down every Web site that may pose a danger to kids? The Internet would become a very boring place indeed.

The answer obviously lies in identifying who is using the sites, but how do you do this?

Faceparty was recently rapped by the ASA for featuring ads on its site that were not suitable for kids. The site argued that you had to be over 16 to sign up, but the ASA countered that the age limit could not be verified and was useless as an argument, let alone a safety barrier.

Maybe the parent needs to take some responsibility here and the kid can only register through the parent – who can then be checked to ensure they are not a dangerous paedophile or the like.

But would this then make these sites uncool? Forcing kids to other unregulated sites?

It is a tough problem but you can be sure that before too long there will be another bad story involving kids use of these sites and then the News of the World et al will scream blue murder that nothing has been done already.