NEW YORK - The next Steven Spielberg could be your neighbor down the street. The next Madonna could be in the cube across the aisle. And the next Stephen King could be that guy in the bar--the one who won't stop talking about the novel he's been working on.
That's long been the argument of Internet optimists, who have been predicting that the Web would let the masses distribute their work to anyone who wanted it, without having to work through the filter of the big media companies. Now the argument is beginning to find a receptive audience--with big media companies.
Case in point: America Online's announcement on Thursday that it was purchasing Weblogs, a collection of 85 blogs that cover everything from child care to computer repair. The blogs are sometimes written by professional writers, but just as often they are by hobbyists and other folks with nonwriting day jobs. Time Warner's (nyse: TWX - news - people ) Internet unit wouldn't disclose financial terms for the deal, but reports pegged it at around $25 million, depending on the sites' future performance.
Even in post-bubble days, that's not much money for a media conglomerate--AOL alone generated more than $600 million in ad revenue in the first half of 2005. But that's the point. Media conglomerates are now betting they can get compelling content on the cheap, either by enlisting the ranks of nonprofessionals or by asking customers themselves to make their own media.
Last March, for instance, Yahoo! (nasdaq: YHOO - news - people ) paid an estimated $30 million to buy Flickr, a photo-sharing service that lets users put their digital snapshots on display for whoever wants to take a peek. Apparently, many people are interested; Yahoo! reports that it now has 1.4 million registered users for the site--up from 400,000 last spring.
Now Yahoo! executives are talking about "flickerizing" other products by letting users share what they've created, or found, with other users. Earlier this week, the company purchased Upcoming.org, a "collaborative event calendar" created by users. And it is rolling out a new "social search" product, which lets users share queries and results with each other.
The idea is to differentiate Yahoo!'s search engine from competitors like Google (nasdaq: GOOG - news - people ). But the special sauce will be cooked up by Yahoo!'s 400 million users. "The very definition of a media company is changing," says Jeff Weiner, general manager of Yahoo!'s search division.
There's a similar impulse behind News Corp.'s (nyse: NWS - news - people ) $580 million purchase of Intermix Media (amex: MIX - news - people ), which owns the social networking site MySpace.com. While music companies and bands use the site to offer free streams and downloads, its real value comes from the site's 27 million users, who filter the offerings among themselves and offer up their own commentary.
In the case of AOL's Weblog purchase, the company won't be using free content, but it won't be paying much for it, either. Jim Bankoff, executive vice president of programming and products, cites Weblog's ability to generate new blogs on the cheap as part of its appeal. "It's low-cost, but it's of high value to advertisers," he says.
Blogs are generally run as profitmaking hobbies at best, with operators relying on ad networks, like Google's Ad Sense, to generate dollars here and there. A handful of blog networks, like Weblogs, operate more like traditional publishers, with the networks paying bloggers a monthly stipend with possible traffic bonuses. How much various bloggers make is a much, um, blogged about subject, but no one claims any blogger is getting rich.
It doesn't mean they aren't getting viewers, though. The Gawker network, a collection of 14 sharply written sites whose topics include gossip, porn and gambling, attracts between 3.8 million and 4.5 million visitors per month, depending on who's counting.
As valuable as that might be to a media company looking to boost its Internet presence, Gawker founder Nick Denton says he's not interested in selling to a larger outfit. "We want to be in the position where we can make fun of the big media conglomerates without looking over our shoulder to see if we're offending them."
Unless, of course, the price is right: Earlier this week, Denton announced a deal to license his Gizmodo gadget site to Dutch publisher VNU, which will distribute versions in French, German, Dutch, Italian and Spanish.
