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Poor Netscape - less Digg, more AOL

In what can only be termed a setback, AOL has announced that it is converting its Netscape Internet property from a social news site to a portal.

Combining Netscape's brand with the social networking flavor-of-the-day was supposed to create a "Digg-killer" and, of course, generate millions of ad impressions for AOL advertisers. In an interesting twist, Netscape used both community ratings and "anchors" who acted like editors to highlight the best stories or moderators to ensure highly ranked news items were clean and spam-free. Apparently, it didn't work out to the satisfaction of AOL management.

The social news site will live on at Propeller.com but it is not clear how much support it will receive from its parent. The three million or so page views per day that the Netscape domain was racking up will now be seeing an AOL-like experience.

A step backwards

AOL indicates that they are reacting to user feedback but, judging by comments on the Netscape blog, a number of users are pretty disgruntled by the change. It is hard to believe that users want yet another site that looks like AOL which, if you haven't noticed, doesn't look all that different from Yahoo (YHOO) (the wide view version). To see the sites for yourself, just click on the following links: AOL (www.aol.com), the old Netscape (www.netscape.com), the new Netscape (http://netscape.aol.com) and Yahoo (www.yahoo.com).

A sign AOL is in trouble?

There are rumors of large layoffs at AOL floating around the blogosphere. Could this be a sign of AOL hunkering down? Pulling in their horns and putting the experiments on the back burner? Now that Jason Calacanis, founder of WebLogs, has left the company, AOL is probably without a visionary left in house. AOL has made an acquisition of Tacoda which is a good move for bolstering their advertising network and ad technology. But what about the kind of content that might draw more visitors and page views? Mgnet is a neat idea (check it out on the lower left section of the AOL homepage) but it is not dramatic enough to make a difference in traffic.

Opportunity for competitors

If Jerry Yang wants to transform Yahoo, he should just buy AOL from Time-Warner (TWX) and shut down everything except MapQuest, Instant Messenger and email. Hopefully, a good portion of AOL's remaining traffic will find its way to Yahoo. And since Google provides search functionality for AOL, killing AOL would allow Yahoo to inflict a little pain on its arch-rival.

Disclosure: author owns none of the stocks mentioned in this article

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