{"id":122,"date":"2008-03-12T12:48:19","date_gmt":"2008-03-12T20:48:19","guid":{"rendered":"http:\/\/web2innovations.com\/money\/2008\/03\/12\/aol-is-offered-up-for-sale\/"},"modified":"2008-03-13T09:55:12","modified_gmt":"2008-03-13T17:55:12","slug":"aol-is-offered-up-for-sale","status":"publish","type":"post","link":"https:\/\/web2innovations.com\/money\/2008\/03\/12\/aol-is-offered-up-for-sale\/","title":{"rendered":"AOL is offered up for sale"},"content":{"rendered":"

Today is a sad day for AOL<\/a>, which somehow contrasts to the big day the company had in 2000 when they merged with Time Warner<\/a> in what was then the biggest deal for the dot com era. All indicates that AOL is offered up for sale.<\/p>\n

AOL, which is a symbolic company for the Internet the has tried to reinvent itself many times. The latest effort, like those before it, does not seem to be going well.<\/p>\n

On Tuesday, Jeffrey L. Bewkes<\/strong>, the chief executive of Time Warner<\/a>, AOL\u00e2\u20ac\u2122s parent company, acknowledged weakness in the business and said he was open to combining AOL with another company \u00e2\u20ac\u201d \u00e2\u20ac\u0153whatever configuration makes it the strongest and the most valuable.\u00e2\u20ac\u009d<\/p>\n

Could this be an indirect signal to Yahoo<\/a> to join forces with AOL<\/a>? Yahoo anyway lost News Corp<\/a> for a possible partner and after turning Microsoft<\/a> down they are left now in sort of hot water to deal with their angry shareholders<\/a>. It is known fact <\/a>that Time Warner explored merging<\/a> AOL with Microsoft\u00e2\u20ac\u2122s online operation two years ago and is now discussing a potential deal with Yahoo.<\/p>\n

AOL has recently shifted the entire focus and is betting its future on a new strategy of selling advertising<\/a> across the Internet and has spent more than $1 billion on related acquisitions<\/a>. The company has acquired a massive number of ad-related companies like Quigo, Tacoda, Userplane, Truveo<\/strong> and their first one Advertising.com<\/a> for $435M back in 2004.\u00c2\u00a0\u00c2\u00a0<\/p>\n

AOL appears to be very close to Yahoo<\/a> by destiny and just like them it seems they are also going through bad times.\u00c2\u00a0 On Monday, the third of four top executives installed last summer to run the new advertising division, known as Platform A<\/a>, left the company. The executive, Curtis G. Viebranz<\/strong>, was fired and replaced by the executive who had been battling his strategy through the fall, Lynda Clarizio<\/strong>.<\/p>\n

Several recently departed executives contacted this week described the climate at AOL as acrimonious. They said there had been confrontational meetings of employees as well as screaming matches in offices, as senior executives worried about making their aggressive quarterly ad sales goals. Mr. Bewkes<\/strong> acknowledged Tuesday that revenue at AOL would be flat for at least another quarter.<\/p>\n

New York Times<\/a> says that the company is still major player on Internet with a very prestigious brand name to an enormous revenue stream of $5.2B in 2007. AOL\u00e2\u20ac\u2122s Web sites attract 112 million visitors per month and 9.3 million Americans still pay the company for Internet services. Yet the revenues<\/a> are down 33% from 2006 and so their traffic too seems to be seriously declining over the past year as seen on Compete\u00e2\u20ac\u2122s traffic graph<\/a>. The company\u00e2\u20ac\u2122s overall revenue was said has declined as it lost dial-up access subscribers while the advertising revenue<\/a> totaled $2.2 billion in 2007, up 18 percent from the previous year, yet the pace of growth has slowed each quarter, too.<\/p>\n

By contrast, if Facebook<\/a> with their almost 100M uniques per month make even the half of what AOL is making off theirs the Facebook\u00e2\u20ac\u2122s market value would then perhaps be justified at the $15B mark, but\u00c2\u00a0the “big” F is doing nothing compared to AOL’s revenues made from advertising\u00c2\u00a0alone.<\/p>\n

It seems AOL is going to blindly follow the hot trend for today which is an ad network<\/a> that sells ads on thousands of other sites. It is quite lazy and easy business, instead of building your own traffic, which is taking ages long to achieve you better attract third party sites to use their traffic to make money from. Perhaps this is the reason why we witness so many new ad networks lately.<\/p>\n

\u00e2\u20ac\u0153We were ahead of the curve in the creation of Platform A<\/strong> and remain in a great position to compete in this intensely competitive marketplace,\u00e2\u20ac\u009d said Randy Falco<\/strong>, the chief executive of AOL. The management changes, he said, were necessary to be able to move quickly. After spending dearly to amass assets, \u00e2\u20ac\u0153the trick was to get them working together and integrated in a very meaningful way.\u00e2\u20ac\u009d<\/p>\n

On Tuesday Mr. Bewkes<\/strong>, who spoke to analysts at a conference in Palm Beach<\/a>, Fla., confirmed that AOL no longer saw a meaningful future for its dial-up Internet subscription service, which may be spun off.<\/p>\n

The online advertising<\/a> seems to be one of the most profitable niches over Internet commanding higher profit margins than any other business online. The leader on the market is Google<\/a> with its AdWords\/AdSense<\/strong> making over $10B per year by selling contextual ads<\/a> on third party web publishers<\/a> and there are literally thousands of smaller and more aggressive players in the space.<\/p>\n

More about AOL<\/strong><\/p>\n

A Global Ad-Supported Web Services Company<\/p>\n

AOL<\/a> is a leading global advertising-supported Web company, with the most comprehensive display advertising network<\/a> in the U.S., a substantial worldwide audience, and a suite of popular Web brands and products.<\/p>\n

The company\u00e2\u20ac\u2122s strategy focuses on increasing the scale and sophistication of its advertising platform and growing the size and engagement of its global online audience through leading products and programming.<\/p>\n

Core Statistics<\/p>\n