During a panel today at the SIIA Information Industry Summit, AOL Media Networks President Michael Kelly was grilled a bit by the moderator about how the company justified spending $25 million for Jason Calacanis’ Weblogs Inc.
He started by doubting aloud that AOL had ever gone public with that figure, then made a joke about that being how much it cost to bring on Jason Calacanis. (who was in the audience, smirk)
When he got around to his real answer, it turned out to be that AOL wanted a piece of CGM, plain and simple:
“You have this incredible social phenomenon of self-expression. The definition of how you build traffic is changing. The definition of how you generate revenue from that traffic is changing… What we saw in Weblogs Inc. was an opportunity to… tap into that self-expression: with Weblogs, with blogging in general, with social networking sites. A lot of traffic is being generated by user interaction and we wanted to [enhance] our relationship with that marketplace.”