Two significant developments in the world of online media should make our media business sit up and take notice. The acquisition of Huffington Post by AOL (America Online) and the launch of the Daily, an online “newspaper” solely for the iPad by Rupert Murdoch’s News Corporation are significant milestones in the shape of things to come.

The AOL-Huffington Post marriage is a curious one. AOL is struggling to stay relevant, given that things have moved rapidly from dial-up (which is how AOL began) to broadband to wi-Fi, and after its high-profile merger with Warner, things haven’t gone exactly according to the plan. Free email services like Hotmail and Gmail effectively dealt a body blow to AOL (which invented the phrase, “You’ve got mail”). Subscribers defected, hitting revenues, and though AOL has survived, it is dangerously close to extinction. Picking up HuffPost (and other news-related sites that have already been acquired) is a desperate gamble to stay in the race.
The irony here is that while AOL was a dynamic player even a decade or so ago when the dotcom boom was in full flow, it is now dying, while HuffPost is the new, shiny kid on the block.
And it is to the latter that the former has turned to be its salvation. Which means that media becomes “old” rapidly in this fast-changing world and loses relevance.
HuffPost in its five-year existence has become wildly popular as the go-to site for news, analysis and gossip, but interestingly, has still to generate profits.
It was started by socialite and writer Adriana Huffington and soon high-profile people were writing or blogging for it. But it was not all about celebrities. The site had hard-nosed reporting and analyses of current events, especially of the Washington “Beltway”, the inside circle of the US capital where politicians, policymakers, lobbyists, journalists and other similar types operate. It is also quick to pick up trends — it began a special section on divorce which soon became a hit. Check it out to see how navigable it is and what a wide mix of reading matter it offers.
Soon there were imitators, the most well known of them being the Daily Beast, started by Tina Brown with the backing of media moghul Barry Diller.
The Beast is more gossipy and peppy and is a credible foe to the HuffPost, but again, it has not broken even.
The purchase of HuffPost by AOL for $315 million vindicates the conviction of all these investors that breaking even operationally is not necessarily the objective of such comprehensive online sites. The idea is to be an early (and credible) player in a universe that is going to grow so rapidly that those who don’t react now will be left far behind.
Which is why Mr Murdoch, who faltered in the early days of the Internet, has launched the Daily. As a newspaper baron he must have surely figured out that falling sales and declining revenues mean something. Online is the way to go. But where he differs from the rest of the online world is that he feels content must be paid for. Both HuffPost and Daily Beast (and scores of other such sites) give away their content free, Murdoch, who has railed against this model believes in charging people to read. Subscribers must own an iPad and also shell out $39.99 per year to read this product. It will be updated once a day and, most important, will not be linked to the Web.
In short, the medium has changed, the rest remains the same. Mr Murdoch is betting that eventually people will not mind paying for quality content instead of the tons of free (and supposedly low-quality) information and analysis they get all over the Internet.
What are the lessons for India? Ask anyone from the media industry and they will tell you that India is different. Print products are thriving and expanding and the only competition is television. As long as literacy continues to increase, people will continue to buy newspapers, which are absurdly cheap. Additionally, the total number of Internet users in India is around 55 million and these include those who go to cybercafés to play online videogames.
There is thus no incentive to launch special news sites that will end up competing with the print products and even less need to create a special “newspaper” for the iPad or any such gadget.
All of the above is true. But the world doesn’t change slowly; one day, when no one is looking, everything would have altered and the old ways suddenly look irrelevant. Laptops, iPads, Tablets, mobiles (550 million of them) will one day become the medium of choice for Indians; they will want their news and analysis instantly. A static and boring online version of the daily newspaper (which is what most news sites are) will not satisfy them. For one thing, these sites do not provide analysis of events. Already people are turning to Twitter to know the latest developments.
Media barons, executives and most of all journalists must, therefore, seriously ponder over international trends. Like it happened in the television business, some nimble entrepreneur will come from nowhere and launch the first independent online site that will satisfy the needs of the online generation.
Large organisations, which are comfortable in their zones, may then find it is too late to reverse the clock.

Sidharth Bhatia is a senior journalist and commentator on current affairs based in Mumbai