Content Under Pressure.

THE BIGGEST BUSINESS STORY of the year may already be old news, and the year's barely two weeks old.

In reading up on the acquisition of Time Warner Inc. by America Online Inc. (a food chain that seems backward somehow), one word leapt out at me over and over again: content. By buying Time Warner, AOL has access to vast stores of content. This content can take new and cost-effective forms. The combined company will control both content and the delivery of content.

"Content" is to media moguls as "facility" is to bureaucrats: a catch-all word with no qualitative connotation that can be applied to almost anything. Lean closer and I'll tell you what content really is. It's what you hang the advertising around.

Fundamentally, there are two ways to generate revenue on the Internet: by selling products and services or by selling advertising. Some, like e-bay, do both.

In order to charge advertisers, an advertising sire needs to deliver "hits." Some, like PointClick.com, do this by actually paying Internet users to look at the advertisements on their sites. But most advertising sites attract users through content.

Yahoo! attracts millions of users every day by offering news, stock quote's, maps, directories, chat rooms, message boards, e-mail, classified ads and a search engine to help users find other web sites of interest. This is content. The Drudge Report attracts hundreds of thousands of visitors every day by publishing occasional gossipy articles of its own and by acting as a digest and directory to other online media. This, too, is content.

Just as online retailing is similar to mail-order retailing, online advertising is similar to more established commercial media, including newspapers and television. And like traditional media, the attitude toward advertising and content varies. For some, advertising is a means to the end of disseminating information or opinions. For others, content is the necessary evil.

The tension between the two is inevitable, and in more established media, there exists a sometimes uneasy peace. The same cold war will be waged by the "new media" as online advertising sites experiment to discover just what mix of content and advertising creates a sustainable business.

The AOL-Time Warner merger is just another step -- albeit a giant one -- toward homogenized news and entertainment. It's the same trend that brought us, for good or ill, MSNBC and CNNSI. That part of the deal is not news. It's even getting hard to work up a good case of righteous indignation.

Fortunately for those of us in the content trenches, news -- like politics -- is local. Despite the proliferation of national television networks, cable channels and web sites, there is still a need and a viable market for local news and local advertising. Whether they will always be printed on newsprint may be debatable, but the need is still there.

When I first subscribed to an online service in early 1992, a fellow journalist chided me for "contributing to the demise of our profession." I replied, "Not our profession. I may be putting the printers and the delivery route drivers out of work, but there will always be a need for folks who go out and get the news."

Some online content, like stock quotes and message boards, can be automated. But news content still requires warm bodies.

I see in my stack of press releases that Microsoft Corp. is going into malls (specifically Simon Property Group malls, including McCain Mall) to find new customers for its MSN Internet Access service. Sounds like Simon is inviting the fox into the henhouse. Those same customers who are milling around the malls might be doing more of their buying online if Microsoft gets hold of them.

Gwen Moritz is editor of Arkansas Business.