Is it right to value an internet business based on content?

With minor exceptions, the Internet is not about content; rather it is about eyeballs and the ability over time to monitize them. There are some companies, such as Amazon or eBay, that will be valued on what is sold on their site, but most of the investment action today is in service oriented sites such as Facebook, Twitter, Groupon or Zynga. All these sites offer content, some such as Facebook and Twitter allow the user to provide the content, others offer games, news, sports etc. The goal is to attract eyeballs and advertise to them.

Content, regardless of its form, must be monitized to have value. Its value is the ability to attract eyeballs. In some cases, users may pay the site for the service, but in most cases, the service is offered for free and the goal is to advertise. The game industry has innovated with virtual goods, which have been a form of content that users are willing to pay for.

So the AOL acquisiton of Huffington is no more than finding a way to increase traffic to web properties that you own from the news and other content on the site. AOL may be able to find synergy between its content on other sites and Huffington's news oriented information. Time will tell on this score. But I think the essential issue of this question is are we seeing an increase in the value of content based sites. I personally don't think so.