Let me conflate three headlines from the last few days into one question, which I'll get to below:
And now for the question: Are portals obsolete? Answering that will require digging a little bit deeper into all three headlines, but here's how the data stacks up:
No one has to stay up late wondering where the money, and traffic, is going. It's crystal clear. But the details I've outlined don't even touch on a key point: that the way Nielsen measures activity is by site, not by what people are doing within those sites. In other words, one reason the Nielsen data shows declines not only in portals, but also in email (28%) and instant messaging (15%) is because content sharing and communication activity are now largely the province of social networks, so portals just aren't as necessary.
Now, you may find it unfair that I singled out AOHell as a point of comparison -- but it's not as though Yahoo is ripping up the record books lately, either. While Facebook crows about its exponentially expanding ad revenue, what Yahoo terms "marketing services" revenue crept up by 4% in the last quarter. That's much better than AOL, but it's nothing to email home about. It's no coincidence that in its earnings release, Yahoo touts the expansion of its relationship with Facebook as one of its key business highlights.
So, are portals obsolete? Perhaps. Or maybe -- just maybe -- they are useful in the broader Internet ecosystem as content creation engines, which can then provide fuel for the sharing activity that goes on within social networks.
Interestingly, in the same Bloomberg story, Facebook Director of Corporate Development Vaughan Smith hints that Facebook wants to buy bigger companies (though I should note, he did not say anything about portals): "As we get bigger and our platform gets more stable, I fully expect that we will be doing more significant acquisitions," he said. "This is working for us, and it's working for the people that we're acquiring."
So, for the fun of it, let me rephrase the question: Is it time for a social network to buy a portal? Or do portals need social networks so much more than social networks need portals that it doesn't make sense?