By the way, for those interested in some low-tech silicon technology, I throw to suit.

The merger of Internet-service-for-the-masses purveyor America Online and print/television/film media for the masses purveyor TimeWarner has, thus far, been a textbook M&A failure. The reason is simple–the company's been doubly slammed by the advertising drought over the last year because of its (a)attempt at mass appeal and (b)a bloated, corpulent heirarchy that, like a dieter being driven by hormones, just can't deal with this lean advertising market.

The ironic thing is that the cycles of capitalism may prevent what free speech advocates fear–the gobbling up of all media by giant conglomerates in search of synergy. The most profitable broadcast company right now is NBC, which -isn't- owned by a media conglomerate (though it is owned by GE). That's because it doesn't go after the broadest audiences with its programming, (as Joe Flint noted in his Wall Street Journal article this week).

Newsweek is another example–it's gaining on Time in revenue, and uses its smaller circulation as a weapon against the red-bordered big book of mediocrity. Online synergy? It hooked up with MSNBC.

Disney has similar problems to AOL-TImeWarner; its ABC is a money pit; it sucks as a whole, and Disney's heavy corporate hand has destroyed ABC's credibility as an independent media outlet (just look at the vacillations over Nightline). But it pulls its chestnuts out of the fire with its movies (as much as I hate Disney personally, I'm definitely going to see Lilo & Stitch” this summer). What's Warner got going for it? Scooby Doo?

You'd think AOL would bring in steady revenue with subscription fees, at least–right? Well, considering how much churn the company generates with all those free hours it gives out on all those CDs it sends out (I use mine for coasters), it probably spends most of what it makes on the subscribers it keeps on marketing costs. And while the service is still popular, it's most popular with people who don't have broadband–and thus with people not in the most profitable online demographic. The people who do use AOL on broadband do it mostly because they have been forced to, or they just don't know any better. The most successful AOL broadband service is instant messaging– which is free to users and depends on advertising for revenue (or at least chargebacks to the AOL-TimeWarner units that advertise on it).

Plus, AOL sucks. Thus the churn.

So there is some hope out there for small media. The lessons of the marketplace are pretty clear–find something you're good at and an audience you can easily define, and you will survive (and probably make money). Go for the lowest common denominator, and prepare to be a loss leader.