AOL (www.aol.com) has acquired Sphere Source, Inc. (www.sphere.com) for an estimated $25 million. Sphere has been in business since 2005, starting out as a blog search engine company (and, before that, as a project called Yodel that didn’t know what it was going to shape up to be). In the last few years, Sphere has retooled itself into a "contextual content search" application. It has become quite widely used as a way to bring back related video, audio, images, or text content in web searches from blogs. Its founders say: "We originally built a blog search engine. We decided that wasn’t very interesting. We shifted our focus to making connections between all kinds of content (Blogs, Video, Media, Photos, Ads). That, we’ve learned, is very interesting." And, indeed, very lucrative. (For a background on Sphere, see the Nov. 13, 2006, NewsBreak, http://newsbreaks.infotoday.com/nbreader.asp?ArticleID=18632.)The Sphere that most bloggers see is not the high-powered version that is now on AOL News. It is a simple box (one that opens when a small icon at the top of a blog entry is clicked) that provides links to recent blog posts and news articles that the widget determines to be semantically relevant to the blog post at hand. The Sphere running on the websites of major magazines and news publishers provides many more capabilities (live video content, shifting iconic links, etc.) than the free-for-blogs version. The press release from AOL explains that Sphere "uses its contextual-search platform technology to make connections between content from blogs, video, media, photos and advertisements," and that these results then get "displayed in a pop-over window or an integrated widget that lets publishers enhance articles by incorporating related articles and blog posts from archived content and across the Web." The purpose for AOL in acquiring such a well-integrated and established widget network is, plainly, to own a ready vehicle for promoting its own content.
However, when I asked Susan Timcheck, a corporate communications officer at AOL, how AOL would balance using Sphere for its own interests against letting Sphere be a neutral (and therefore more reliable) web search tool, she said that the promotion of AOL or Time Warner (AOL’s parent) content above the interests of neutrality and good search "isn’t and won’t be our focus. The key is relevancy, and we don’t want to jeopardize that. Our goal is to help increase the scale of Sphere." All of this comes at a time when AOL seems to be generally ramping up its services, both in quality and in marketing. AOL also just introduced an iPhone compatible mobile search interface at http://search.aol.com, and rolled out its Taiwanese portal at www.aol.tw.
Some suggest (notably Om Malik at GigaOM and Holly M. Sanders in a New York Post article) that AOL’s growth is directionless at best, and that its strategy is dangerously unclear. Last month, Sanders quoted an unnamed insider at Time Warner as saying of its strategy, "It’s schizophrenic from one day to the next." At the time of AOL’s buyout of Bebo last month, Malik said that there were forces within Time Warner which wanted to ax AOL altogether and turn all their attention toward "old, Hollywood-style businesses," noting that in March, Time Warner was willing to discuss a deal with Yahoo! to "get rid of AOL, which is going to through a major crisis. …" But it also acquired Bebo to work within Time Warner’s online division (that is, AOL) for $850 million.
Time Warner’s direction for AOL remains unclear. But for AOL’s part, the addition of Sphere seems to provide some clarity and open up interesting new possibilities. Of course, increasing the scale of Sphere on the web now means increasing the scale of a wholly-owned AOL subsidiary during a season of AOL growth—though AOL maintains that the promotion of Time Warner content is at least secondary to the firm establishment of a bigger and better contextual content search tool. Indeed, Timcheck says that promotion of Time Warner content isn’t, and won’t be, the focus of AOL’s programming division’s goals. The goal is to make what they see as a great tool even more excellent and even more pervasive on the web.
The heart of Sphere’s technology is a process that makes use of a patent-pending and "proprietary Content Genome. The Content Genome was developed specifically to deliver high-precision, low-cost (automated) related content delivery in dynamic online publishing and news environments. Unlike other solutions, the Content Genome does not require a taxonomy or training—Sphere can index any text artifacts, or media with associated text, and generate related content out of the box. Integration time on the publishers’ side is minimal, no additional meta-data is required." This means that Sphere still bases all of its results on text rather than any innovations into true audio or visual search. But its indexing of said text is extremely efficient.
Is this searching efficiency and multimedia Ajax-powered delivery a threat to Google’s Universal Search? Timcheck says, "We don’t comment on other companies within the industry." Although, she did say more about how this technology helps AOL: "One of our goals with this acquisition is to increase Sphere’s carriage and distribution through AOL’s owned and operated network. This really goes back to the original mission of Sphere—contextually relevant connections that create the most relevant consumer experiences."
Presumably, AOL did not make this purchase in order to altruistically further the advancement of search, however idealistic it might be about the future of Sphere. This is a calculated risk at a strategically important time. It gives AOL a chance to modify its brand for the millions who may now be giving it another look.
