MediaGlow is supposed to focus on wooing visitors from the Web, rather than from the AOL properties that today deliver a large chunk of its sites' traffic. (Nicholas over at SAI points out that based on Hitwise data the MediaGlow sites are heavily dependent on traffic from the mothership.)

At its crux, MediaGlow is a reaction to this dependency: It's a reorg, saddled with a new, odd network brand (MediaGlow? Really?) and involving a lot of talk about building out niche sites. That's right -- Time Warner is exploring niche sites.

Memo to AOL: It's been done. It's being done. And it's being done by swifter, slicker companies than AOL.

What AOL really needs to do is to ramp up its search strategy. Paid search, as should surprise no one, was one of the healthiest areas of AOL's advertising business last quarter, partially offsetting declines in display ads. Instead of figuring out ways to better maximize this trend, AOL plans to create new display ad inventory through the creation of new media brands.

Before MediaGlow pumps money into building out new content brands, new studios on both coasts and similar, costly initiatives ("original video productions" like "Moviefone's Unscripted" -- just what we've all been waiting for, eh?), it needs to at least ensure that Web users can even find its current properties online.

Take a look at the charts above if you don't see what I mean by that. Outside of hits like Engadget, how highly visited are AOL's properties, really? AOL, get your own house in order before building new ones.

You want to create new media brands? Fine -- but do it intelligently. Invest in independent bloggers, equip them with audio and video recording and editing tools, and incentivize them based on the grimly effective Nick Denton model of cash-for-traffic.

There's another potential misstep in store for MediaGlow. Worse than its name (seriously, was this the best AOL could do?) and worse than spending money on new display ad inventory through launching new brands is the plan to create automated content sites. As if the Web needs more of those.

AOL says: "MediaGlow will also maximize the technology of acquired companies Relegence [a news aggregation and alerting service] and Sphere [a content aggregation widget] and begin an unprecedented effort to build thousands of medium and long-tail focused automated sites in 2009 and 2010, which will efficiently continue AOL's growth position in publishing."

AOL seems to believe it'll be able to parlay the original content created by other publishers into self-maintaining sites focusing on a particular topic. This had better not cost AOL a cent more than it's already paid for Relegence and Sphere, since the chances of it making much money at all on this project seem downright slim.

The strategy won't get serious traction with the search engines AOL needs to rely on to drive traffic -- Google prefers original content. And if AOL's looking to drive traffic from external sites, it's got to learn how to play nice with Google.

And users don't need more content aggregation sites. Really. The Web's littered with the remains of failed content aggregation sites from the past decade.

In case you haven't been online lately, AOL, today's Web surfers already have far too many choices for aggregated news on even the narrowest of subjects. They have Google News and its ilk, and they've got RSS/Atom. You might have heard of both. They've got niche-oriented group sites a-plenty. (That would be sites like this "Ning" thing you may have heard mentioned occasionally.)

You're starting from square one -- and you want traffic? You need original, compelling content, produced cheaply and efficiently.

AOL's already seeing something of a turnaround for its Web properties -- the company cited comScore data indicating that its page views climbed 40 percent from last year, and that it currently serves an audience of 70 million users.

But, AOL, don't screw up your progress by throwing money away. You need to get a better handle on search -- both in paid ads and driving search traffic -- and in cheaply producing original, must-have content. Forget the new studios. Forget the inane streaming video shows. Leave Moviefone as a commerce play. Spread your content budget elsewhere, and more wisely. And for Pete's sake... drop "MediaGlow"!