AOL Strikes Back

Sep 15, 2009


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The Blob is back. Here comes that oozing, amorphous, alien life form known for swallowing everything in its path: AOL. Recent reports reveal that the behemoth has been gobbling up content. On June 29, David Carr of the New York Times wrote, "Mr. [Tim] Armstrong [AOL CEO] wants AOL to think big again. Three months after leaving a senior job as Google's president of advertising sales, he is formulating his ambitious recovery plan for AOL. He wants to make AOL the biggest creator of premium content on the Web and the largest seller of online display advertising." That goal may not be so far off.

"The total number of full time writers and editors in the AOL newsroom," reported TechCrunch, "is 500, plus another 1,500 freelancers." TechCrunch added, "MediaGlow was unveiled a year ago. These are AOL's content sites - music, finance, the blogs, and new sites like PoliticsDaily and Love.com. Combined, these sites bring in 76 million unique monthly visitors (Comsore, May 2009). 27 of the Technorati Top 100 blogs are owned by AOL."

It's probably not an accident that these content revelations are coming out as Time Warner is prepping AOL for yet another spin-off. At its core, AOL always has been a content provider. But too often, it has acted as if content were just a juicy worm dangling in front of millions of consumer eyeballs. The Blob has gone through various shape shifts. It's been a utility; a brand; a portal; a supermarket; a pharmacy; a mall; a media download center. Onliners could surf, and surf, and surf, and never leave AOL waters. This latest foray may appall or amuse us, but at least we see focus on the company's strength: content.

AOL began in the mid-1980s as Quantum Computer Services, a gaming add-on for Commodore computers. By 1991 it had morphed into America Online, the internet provider for mainstream America. As it grew, it entered joint ventures and made deals with Sprint, Shopper's Express, Tribune Company, NBC Online, Knight-Ridder, CNN, Time, Omni, Wired, The New Republic, and Disney Adventures. And it acquired companies-Netscape, ImagiNation, Music Now, MovieFone, Inc., When Inc., Spinner Networks, Nullsoft, MapQuest.com, and CompuServe among others

The Greenhouse Project in 1995 combined content with a crusade. "America Online is willing to provide seed equity capital to online content developers," went the siren call, "in much the same way as leading motion picture studios, record labels, and book publishers offer development funds to encourage new talent. In other words, the Blob would be an incubator, in which America's best and brightest "infopreneurs" would grow, and provide AOL with content. What a gold rush!

After months and months, a content cadre was selected, got up and running, lived life in the 24/7 zone, and got exhausted. At a certain point, the seed money was withdrawn, and, well, the Greenhouse Project was a lovely idea but c'est la vie. Meanwhile, AOL's pool of subscribers extended beyond US borders to Canada, UK, Europe, and Japan. And yet it always seemed to crave more.

In January 2001, in an amazing gymnastic feat, AOL and Time Warner swallowed each other. Janelle Brown of Salon was among those who wondered if the merger spelled trouble for other media companies. The answer turned out to be no. The Time Warner merger was brilliant-until it wasn't. In 2003, sales fell 105% to "only" $6.4 billion. (I should be so unlucky.)

Since that time, AOL has not exactly been collecting food stamps-and it has continued to feed its appetite for deals. It has also been examining the landscape. "In recent months," Olga Kharif reported in the September 26, 2007 Businessweek, "Google's mobile aspirations have generated headlines aplenty. But out of the limelight, another major Internet player, AOL, is preparing to flex its mobile muscles as well."

To those of us who thought AOL was in sleep mode, I say, "Wrongo!" While we were watching Microsoft, Yahoo and Google play Highlander with each other, AOL has been getting in touch with itself. It's got premium content for web and mobile users, and the will to use it. Will this work? I'm putting my money on AOL, which, is just the way the Blob wants it.