America Online has sets its sights on content in favour of technology, with a flurry of activity at its Greenhouse Networks subsidiary - including a deal to buy LightSpeed Media, the company founded by the developers of the Web-based "shows" The Spot and GrapeJam.
Greenhouse Networks, a business unit of AOL's AOL Studio division that focuses on content creation, will acquire the company for an undisclosed amount of cash and stock, according to an official. Greenhouse Networks also announced that Brandon Tartikoff, former president of NBC Entertainment, will be named chairman of its board of directors. Scott Zakarin, a LightSpeed founder, will be named president of programming. Tartikoff already had a relationship with AOL that called for him to develop interactive brands that would be launched online, on television and in book format simultaneously.
Today's announcement is part of AOL's drive to make its content king, according to one analyst. AOL's proprietary technology, such as that backing its popular chat rooms, is currently ahead of the pack, but all of that technology will be widely available on the Web later this year, says Peter Krasilovsky, vice president at Arlen Communications.
"The only way AOL has a long-term prospect is if it can have programming that can be considered unique to AOL," Krasilovsky says. "If anyone can make it happen, it's Brandon Tartikoff, but we don't really know yet if [AOL] can drive revenue with hot content."
The as-yet unnamed entertainment network, to be launched later this year, will offer a large conglomeration of programs on television, movies, and music, according to Anne Bentley, Greenhouse's director of communications; the content will include audio and video. Some of the content will be available on the Web, but some will be available exclusively to AOL members, she said.
Greenhouse has licensed Firefly Network's collaborative filtering technology, to make the site customisable, Bentley says. It also plans to launch content networks covering sports, romance, young adults, health, and women.
The LightSpeed acquisition deal is expected to close by mid-year, officials said. LightSpeed's 17 employees and the entertainment network will stay in Los Angeles.
AOL, with headquarters in Vienna, Virginia, can be reached on the World Wide Web at http://www.aol.com/.